King & Wood, P.A.

Use Estate Planning to Prepare for Cognitive Decline

“Data from sources like the U.S. Census Bureau shows in no uncertain terms that the U.S. population has grown older over the prior two decades.”

Since 2000, the national median age in the U.S. has increased by 3.4 years, with the largest single year gain of 0.3 years in 2021, when the median age reached 38.8 years. This may seem young compared to the life expectancies of older Americans. However, the median age in 1960 was significantly lower, at 29.5 years, according to the article “Don’t Let Cognitive Decline Derail Well-Laid Financial Plans” from Think Advisor.

An aging population brings many challenges to estate planning attorneys, who are mindful of the challenges of aging, both mental, physical and financial. Experienced estate planning attorneys are in the best position to help clients prepare for these challenges by taking concrete steps to protect themselves.

Individuals with cognitive decline become more vulnerable to potentially negative influences at the same time their network of trusted friends and family members begins to shrink. As people become older, they are often more isolated, making them increasingly susceptible to scams. The current scam-rich environment is yet another reason to use estate planning.

When a person is diagnosed with Alzheimer’s or any other form of dementia, an estate plan must be put into place as soon as possible, as long as the person is still able express their wishes. A diagnosis can lead to profound distress. However, there is no time to delay.

While typically, the person may state they wish their spouse to be entrusted with everything, this has to be properly documented and is only part of the solution. This is especially the case if the couple is close in age. A secondary and even tertiary agent needs to be made part of the plan for incapacity.

The documents needed to protect the individual and the family are a will, financial power of attorney, durable power of attorney and health care documentation. In addition, for families with more sophisticated finances and legacy goals, trusts and other estate and tax planning strategies are needed.

A common challenge occurs when parents cannot entrust their children to be named as their primary or secondary agents. For example, suppose no immediate family members can be trusted to manage their affairs. In that case, it may be necessary to appoint a family friend or the child of a family friend known to be responsible and trustworthy.

The creation of power of attorney documents by an estate planning attorney is critical. This is because if no one is named, the court will need to step in and name a professional guardian. This person won’t know the person or their family dynamics and may not put their ward’s best interests first, even though they are legally bound to do so. There have been many reports of financial and emotional abuse by court-appointed guardians, so this is something to avoid if possible.

Reference: Think Advisor (April 21, 2023) “Don’t Let Cognitive Decline Derail Well-Laid Financial Plans”

Key Components of an Estate Plan to Tackle First

“Having the right legacy plans and documents in place is one of the most important steps aging individuals can take, both to give themselves peace of mind and to avoid the possibility that confusion will make an already challenging situation even worse.”

Despite the importance of estate planning, not everyone takes the time to make an appointment with an estate planning attorney and get it done, according to a recent article from Think Advisor, “6 Trust and Will Considerations That Can’t Wait.” Having an estate plan, including a power of attorney for yourself or an older family member is necessary to avoid a more contentious and expensive alternative: guardianship.

If an elderly family member is showing signs of dementia, the power of attorney needs to be done as soon as possible. Capacity doesn’t get better over time, only worse, and once someone is fully incapacitated, the only option is guardianship.

Wills aren’t just for wealthy people. Anyone with even a moderate estate needs a will. Young people often claim they don’t need a will because of their age. However, young and old people die unexpectedly.

Putting a will in place is particularly important for people who want to leave assets to their “chosen” family, those who may be outside the traditional nuclear family but who are for all intents and purposes, their family. Without the benefit of marriage or kinship, chosen family members do not have any legal right to inherit and will not be considered in any property distribution.

Having a will saves heirs from pain and confusion. If you don’t have a will, the court will make decisions for property distribution and guardianship for any minor children according to the laws of the state, which may not be what you had in mind.

Planning for incapacity is part of an estate plan. Designating a Medical Power of Attorney, Financial Power of Authority and HIPAA Authorization giving a trusted person access to medical records and treatment decisions are best done before there’s an emergency.

Guardianship is not something most people want to deal with, and planning can avoid it. Guardianship at its essence is a legal process effectively stripping a person of the right to act on their behalf and must be approved by a court.

It is often required when the loved one is unable to act responsibly or is undermining their family’s ability to act in their best interest under the power of attorney. However, there are many legal landmines in guardianship. The legal process can become contentious, especially if family dynamics are toxic.

Advance planning saves time, money and heartache. The Power of Attorney gives the person named as agent the right to take care of legal and financial matters in the event they can no longer do so for themselves. An estate planning attorney can create a power of attorney to meet your specific needs, either as broad or as narrow as desired.

Reference: Think Advisor (March 2, 2023) “6 Trust and Will Considerations That Can’t Wait”

How Does Guardianship Work?

“If you haven't had any experience with guardianship for adults with dementia, it's likely you don't understand just how complex it is. You are not alone.”

For family members of the estimated 6.5 million dementia patients in the U.S., it is crucial to understand whether guardianship may be an option for their loved one. A recent article from Next Avenue titled “Thinking of Becoming a Guardian?” explains how the guardianship process works and what factors go into the decision-making process.

Guardianship is the position of being responsible for someone else. State courts usually appoint a guardian to make decisions for a person, if the court finds that person to be incapacitated or unable to make safe and reasonable decisions for themselves. People who are placed under guardianship, known as “wards,” often lose their independence in making financial, legal and health care decisions.

If full guardianship is awarded, the person cannot make decisions about whether they may vote, marry, where they live, or make their own end-of-life decisions.

Two tasks that are evaluated when considering guardianship are a person’s ability to manage personal finances and to take medications as prescribed.

The court may call on a geriatrician or psychiatrist to evaluate the person’s functional behavior, cognitive function, disabling conditions and ability to meet their essential needs.

There are benefits to guardianship for someone who is not able to care for themselves. It ideally creates a safety net for a person who cannot make informed decisions for themselves.

this, of course, assumes that the guardian is honest and accountable, which is not always the case. The inconsistencies plaguing the guardianship system include minimum standards for guardians, lack of regular independent reviews of the need for guardianship and lack of educational requirements for guardians.

Once guardianship is assigned, there is a tendency for the person to become lost when no follow-up is done. The very same person who lacks capacity to care for themselves is not going to be able to advocate for themselves, contact an attorney or access funds for court proceedings.

There is also a tendency to assign full guardianship for a person, rather than less restrictive alternatives.

There are alternatives, but they require planning and discussion. More than 40% of Americans have not discussed their wishes for end-of-life care with their loved ones, according to an article in the Journal of the American Geriatrics Society. Families should have a conversation at the first sign of memory loss or when preparing for retirement regarding wishes for end-of-life care and write them down as part of an Advanced Directive—also known as a Living Will and Health Care Power of Attorney—when preparing their estate plan.

Another important document, although not legally binding, is a “Value History,” where you share your values and beliefs as they may impact care choices.

Designate a Power of Attorney and list two or even three back-up candidates. This person will be responsible for financial, legal and personal matters, avoiding the need for guardianship.

Appointing a family member or friend as a guardian is the ideal solution. However, there are instances when the best person to be a guardian is not a family member, but a court-appointed outsider. This relieves the family of being the ones who need to inform a person suffering from dementia with the news of having to move into a nursing home facility or sifting through financial records to learn that the family home is in foreclosure. The family can focus on being supportive and loving, while the guardian deals with the sometimes harsh realities of the person’s life.

Speak with your estate planning attorney to learn about how guardianship works, and whether it may be the right move for your family.

Reference: Next Avenue (Dec. 23, 2022) “Thinking of Becoming a Guardian?”

Why Do You Need an Estate Plan?

“Thinking about life after your death can be uncomfortable. However, it's one of the most important things you can do.”

Everyone benefits from having an estate plan. If you own property, investments, or anything of value, you need an estate plan. If you have family or dependents, you need an estate plan. Estate planning directs how assets are directed, if you become incapacitated or when you die.

The checklist for creating an estate plan includes a will, powers of attorney and assigning beneficiary account designations. Using an estate planning lawyer ensures that your plan meets all legal requirements, according to the article “What is estate planning? A strategy to safeguard your family and your finances, and ensure your plans for them get carried out as you wish” from Business Insider.

In this usage, “estate” means the things you own. An estate plan inventories everything, including your home, cars, bank accounts, life insurance policies, retirement accounts and personal possessions. It outlines in writing exactly what you want to happen with your property. It also directs who you want to handle your affairs during life and after death and who you want to inherit your assets.

Why does estate planning matter? If you die without a will, your assets may get tied up in probate, where the court oversees the distribution of your estate according to your state’s laws. Without a will and the tax planning part of estate planning, your estate may shrink and your heirs receive less.

The will is just the start of a comprehensive estate plan. It details where you want your assets to go and names an executor who will oversee your estate. If you have minor children, the will is where you name a guardian to raise your children.

A durable power of attorney designates a person to act on your behalf for legal and financial matters if you become incapacitated. Without it, family members will not be able to file tax returns, collect government benefits, manage investments and handle any financial transactions. They’ll need to go to court and have a judge appoint someone to manage these and other tasks. It’s far easier and less expensive to have this document in place than to get the courts involved.

A health care power of attorney is your opportunity to name someone to make medical decisions on your behalf if you become incapacitated. This includes choosing doctors, deciding what tests to run and whether you want to have surgery or certain treatments.

You’ll want a living will to ensure your wishes for end-of-life decisions are followed. A living will also relieves your loved one of the enormous burden of determining “what Mom would have wanted” if you become terminally ill, enter the late stages of dementia, are seriously injured, in a coma, or near the end of your life. What extreme measures do you want to be taken to prolong your life? What would you not want to be done to maintain your life?

Beneficiary designations are the forms to be completed when you open a retirement account or purchase a life insurance policy. Beneficiary designations override any instructions for these accounts set out in your will, so its very important to review and update them regularly.

Trusts are used to take assets out of your probate estate. A trust is created by an estate planning attorney and upon death, assets are distributed according to the directions of the trust. If you own a lot of assets, trusts are a useful tool to avoid estate and inheritance taxes.

Digital asset protection trusts are a way to legally transfer domain names, social media accounts and other digital assets to heirs upon your death. Emails, text messages, cloud-based storage accounts, websites and social media accounts all need to be inventoried and a plan needs to be in place to protect these assets.

Reference: Business Insider (Sep. 22, 2022) “What is estate planning? A strategy to safeguard your family and your finances, and ensure your plans for them get carried out as you wish”

What are Alternatives to Guardianship?

“We all want to protect vulnerable people from harm. However, taking away all their rights usually isn’t the place to start. Instead, there are several less severe options that could be the right way to go.”

Guardianships are drastic and very invasive. They strip individuals of their legal autonomy and establish the guardian as the sole decision maker. To become a guardian requires strong evidence of legal incapacity, and approval by a judge, explains an article titled “Guardianships Should Be a Last Resort–Consider These Less Draconian Options First” from Kiplinger. They should not be undertaken unless there is a serious need to do so. Once they’re in place, guardianships are difficult to undo.

If an elderly person with dementia failed to make provisions durable powers of attorney for health care and for financial matters before becoming ill, a guardianship may be the only ways to protect the person and their estate. There are also instances where an aging parent is unable to care for themselves properly but refuses any help from family members.

Another scenario is an aging grandparent who plans to leave funds for minor beneficiaries. Their parents will need to seek guardianships, so they can manage the money until their children reach the age of majority.

Laws vary from state to state, so if you might need to address this situation, you’ll need to speak with an estate planning attorney in the elderly parent or family member’s state of residence. For the most part, each state requires less restrictive alternatives to be attempted before guardianship proceedings are begun.

Alternatives to guardianship include limited guardianship, focused on specific aspect of the person’s life. This can be established to manage the person’s finances only, or to manage only their medical and health care decisions. Limited guardianships need to be approved by a court and require evidence of incapacity.

Powers of attorney can be established for medical or financial decisions. This is far less burdensome to achieve and equally less restrictive. A Healthcare Power of Attorney will allow a family member to be involved with medical care, while the Durable General Power of Attorney is used to manage a person’s personal financial affairs.

Some families take the step of making a family member a joint owner on a bank, home, or an investment account. This sounds like a neat and simple solution, but assets are vulnerable if the co-owner has any creditor issues or risk exposure. A joint owner also doesn’t have the same fiduciary responsibility as a POA.

An assisted decision-making agreement creates a surrogate decision-maker who can see the incapacitated person’s financial transactions. The bank is notified of the arrangement and alerts the surrogate when it sees a potentially suspicious or unusual transaction. This doesn’t completely replace the primary account holder’s authority. However, it does create a limited means of preventing exploitation or fraud. The bank is put on notice and required to alert a second person before completing potentially fraudulent transactions.

Trusts can also be used to protect an incapacitated person. They can be used to manage assets, with a contingent trustee. For an elderly person, a co-trustee can step in if the grantor loses the capacity to make good decisions.

Planning in advance is the best solution for incapacity. Talk with an experienced estate planning attorney to protect loved ones from having to take draconian actions to protect your best interests.

Reference: Kiplinger (July 7, 2022) “Guardianships Should Be a Last Resort–Consider These Less Draconian Options First”

What are Alternatives to Guardianship?

“We all want to protect vulnerable people from harm. However, taking away all their rights usually isn’t the place to start. Instead, there are several less severe options that could be the right way to go.”

Guardianships are drastic and very invasive. They strip individuals of their legal autonomy and establish the guardian as the sole decision maker. To become a guardian requires strong evidence of legal incapacity, and approval by a judge, explains an article titled “Guardianships Should Be a Last Resort–Consider These Less Draconian Options First” from Kiplinger. They should not be undertaken unless there is a serious need to do so. Once they’re in place, guardianships are difficult to undo.

If an elderly person with dementia failed to make provisions durable powers of attorney for health care and for financial matters before becoming ill, a guardianship may be the only ways to protect the person and their estate. There are also instances where an aging parent is unable to care for themselves properly but refuses any help from family members.

Another scenario is an aging grandparent who plans to leave funds for minor beneficiaries. Their parents will need to seek guardianships, so they can manage the money until their children reach the age of majority.

Laws vary from state to state, so if you might need to address this situation, you’ll need to speak with an estate planning attorney in the elderly parent or family member’s state of residence. For the most part, each state requires less restrictive alternatives to be attempted before guardianship proceedings are begun.

Alternatives to guardianship include limited guardianship, focused on specific aspect of the person’s life. This can be established to manage the person’s finances only, or to manage only their medical and health care decisions. Limited guardianships need to be approved by a court and require evidence of incapacity.

Powers of attorney can be established for medical or financial decisions. This is far less burdensome to achieve and equally less restrictive. A Healthcare Power of Attorney will allow a family member to be involved with medical care, while the Durable General Power of Attorney is used to manage a person’s personal financial affairs.

Some families take the step of making a family member a joint owner on a bank, home, or an investment account. This sounds like a neat and simple solution, but assets are vulnerable if the co-owner has any creditor issues or risk exposure. A joint owner also doesn’t have the same fiduciary responsibility as a POA.

An assisted decision-making agreement creates a surrogate decision-maker who can see the incapacitated person’s financial transactions. The bank is notified of the arrangement and alerts the surrogate when it sees a potentially suspicious or unusual transaction. This doesn’t completely replace the primary account holder’s authority. However, it does create a limited means of preventing exploitation or fraud. The bank is put on notice and required to alert a second person before completing potentially fraudulent transactions.

Trusts can also be used to protect an incapacitated person. They can be used to manage assets, with a contingent trustee. For an elderly person, a co-trustee can step in if the grantor loses the capacity to make good decisions.

Planning in advance is the best solution for incapacity. Talk with an experienced estate planning attorney to protect loved ones from having to take draconian actions to protect your best interests.

Reference: Kiplinger (July 7, 2022) “Guardianships Should Be a Last Resort–Consider These Less Draconian Options First”

What Sparks the Contesting of a Will?

“Some people draft wills or trusts to ensure that the loved ones they will eventually leave behind own a piece of the properties the former will be leaving behind in case of their death.”

A last will and testament is the document used to direct your executor to distribute assets and property according to your wishes. However, it’s not uncommon for disgruntled or distant family members or others to dispute the validity of the will. A recent article titled “5 Reasons A Law Will May Be Contested” from Vents Magazine explains the top five factors to keep in mind when preparing your will.

Undue influence is a commonly invoked reason for a challenge. If a potential beneficiary can prove the person making the will (the testator) was influenced by another person to make decisions they would not have otherwise made, a will challenge could be brought to court. Undue influence means the testator’s decision was significantly affected by a person who stood to gain something by the outcome of the will and made a concerted effort to change the testator’s mind.

Even if there was no evidence of fraud, any suspicion of the testator’s being influenced is enough for a court to accept a case. If you think someone unduly influenced a loved one, especially if they suffer from any mental frailties or dementia, you may have cause to bring a case.

Outright fraud or forgery is another reason for the will to be contested. If there have been many erasures or signature styles appear different from one document to another, there may have been fraud. An estate planning attorney should examine documents to evaluate whether there is enough cause for suspicion to challenge the will.

Improper witnesses. The testator is required to sign the will with witnesses present. In some states, only one witness is required. In most states, two witnesses must be present to sign the will in front of the testator. A beneficiary may not be a witness to the signing of the will. Some states have changed laws to allow for remote signings in response to COVID. If the rules have not been followed, the will may be invalid.

Mistaken identity seems farfetched. However, it is a common occurrence, especially when someone has a common name or more than one person in the family has the same name, and the document has not been properly signed or witnessed. This could create confusion and make the document vulnerable to a challenge. An experienced estate planning attorney will know how to prepare documents to withstand any challenges.

Capacity in the law means someone is able to understand the concept of a will and contents of the document they are signing, along with the identities of the people to whom they are leaving their assets. The person doesn’t need to have perfect mental health, so people with mild cognitive impairments, such as depression or anxiety, may make and sign a will. A medical opinion may be needed, if there might be any doubt as to whether a person had testamentary capacity when the will is signed.

A will contest can be time-consuming and expensive, so keep these issues in mind, especially if the family includes some litigious individuals.

Reference: Vents Magazine (May 6, 2022) “5 Reasons A Law Will May Be Contested”

What Estate Planning Documents are Used to Plan for Incapacity?

“One of the most important estate planning documents for all persons over the age of 18 to consider is a durable power of attorney.”

The chief reason for a Power of Attorney (POA) is to appoint an agent who can make decisions about business and financial matters if you become incapacitated, according to an article “Estate planning in case of incapacity” from The Sentinel-Record. For most people, the POA becomes effective at a later date, when the person signs a written authorization to act under the document, or when the person is determined to be incapacitated. This often involves having the person’s treating physician sign a notarized statement declaring the person to be incapacitated. This type of POA is referred to as a “Springing POA,” since it springs from a future event.

The challenge with a springing POA is that it requires reaching a point in the person’s life where it is clinically clear they are incapacitated. If the person has not yet been diagnosed with Alzheimer’s disease or another form of dementia, but it is making poor decisions or not able to care for themselves, it becomes necessary to go through the process of documenting their incapacity and going through the state’s process to activate the POA.

For a more immediate POA, your estate planning attorney may recommend creating and signing a Durable Power of Attorney. This allows you to appoint someone to manage personal and business affairs immediately. For this reason, it is extremely important that the person you name be 100% trustworthy, since they will have instant legal access to all of your property.

A Power of Attorney can be customized to include broad powers or limited to a specific transaction, like selling your home.

This is not the only way to allow another person to take over your affairs in the event of incapacity.  However, it is easier than seeking guardianship or conservatorship. Another method is to place assets in a revocable trust, which allows you to maintain control of the assets while alive and of legal capacity. The trust includes a successor trustee, who takes over in the event you become incapacitated or die.

The successor trustee only has control of the assets owned by the trust, so if the purpose of the trust is planning for incapacity, many, if not all, of your assets will need to be retitled and put into the trust.

A properly created estate plan will often use both the Durable Power of Attorney and a Revocable Living Trust, when preparing for incapacity.

Sadly, many people fail to have these legal tools created. As a result, when they are incapacitated, the family must go to court to have a person appointed to manage their affairs. This is usually referred to as a “legal guardianship.” The proceeding to obtain a guardianship is lengthy and complicated. Once the guardianship is established, the guardian must file annual accountings with the court documenting how all of the funds are used. The guardian must also post a surety bond, designed to protect assets in case of improper use.

Guardianship and its costs and time-consuming tasks can all be avoided with a properly prepared estate plan, including planning for incapacity.

Reference: The Sentinel-Record (March 27, 2022) “Estate planning in case of incapacity”

What Should You do If It Is Possible an Elderly Parent Is Being Scammed?

“In the wake of the coronavirus pandemic, many older adults are more socially isolated than ever—and thus more vulnerable to being financially victimized.”

New best friends and unusual transactions could be signs of elder financial abuse, which extends far beyond the robocalls purporting to be from the Social Security Administration or the IRS. The majority of elder financial abuse cases reported to agencies involve people known to their victims, including relatives, neighbors and so-called “friends.” Stealing a Social Security benefit or forging legal and financial documents, along with misappropriating cash, jewelry, and credit cards are part of the $36.5 billion cost of elder fraud, according to the National Council on Aging.

A recent article from AARP Magazine titled “Spot the Red Flats of Elder Financial Abuse” tells the reader what to look for.

Out-of-Character Spending. If your frugal mother’s credit card statement shows she is buying expensive items or making large withdrawals, contact the bank immediately to challenge the charges and consider shutting down the card. Unusual financial activity should be a red flag they are being scammed, especially if they have no memory of the transactions.

If possible, create a transparent system where both you and your parent can monitor finances. The more you can be involved with their record keeping, the less time a scammer can go undetected.

New Best Friends Who Seem Inappropriate. People who live alone and do not have any social outlets are vulnerable to offers of friendship, even if they come with financial requests. Some of these new friends will try to push family members away from their victim, another red flag to family members to step up contact and involvement. Isolation is a powerful strategy, as is creating a dependency for helping with everything from taking them to a doctor’s office to making trips to the bank.

Losing the Ability to Manage Money and Cognitive Decline. Alzheimer’s disease or other types of dementia can progress so slowly as to initially go unnoticed. People with dementia are extremely vulnerable to the wishes of people who are physically present with them. A welcoming friend who suggests handling their finances may be given the keys to the kingdom, without any notice to the family.

When a third party has access to an older adult’s private information, like Social Security numbers, account numbers or passwords, the victim can very easily be scammed. Set up their accounts to have a trusted family member named, so any changes require notification, wherever possible.

Mobility or Frailty Issues Are Vulnerable to Able-Bodied Scammers. An elderly person who cannot get to the bank and has not embraced online banking will welcome the help of a friend, even if the friend’s intent is questionable. People with physical or mental impairments should not be left to attempt to manage financial or legal matters on their own. Setting up automatic bill payments for recurring bills like rent, cellphone, utilities and other payments will make their lives easier and their assets safer.

Regular involvement with an elderly person’s life is the best deterrent. Just like bright lights and video cameras will send a thief to another house, the presence of family members in an elderly person’s life is the best deterrent to financial scams. People are least vulnerable when they are protected by a network of watchful, honest and caring family members.

Reference: AARP Magazine (February 28, 2022) “Spot the Red Flats of Elder Financial Abuse”

When Does Someone Need a Guardian?

“Seeking a guardianship for a loved one is a decision that shouldn't be taken lightly. Here's how the process works.”

When a person is legally deemed incapable of managing their own affairs and has not named a financial power of attorney to do so, a guardian or conservator may be needed. A family member may be appointed to the task, as explained in a recent article “What to Do When a Family Member Needs a Guardian” from Kiplinger.

Guardians are usually responsible for personal affairs, while a conservator is generally limited to financial matters. These terms vary by state, so ask the estate planning attorney which ones are most appropriate for your situation. In many cases, one person takes on both roles.

The control over another person’s life and money has been in the news a lot lately. The years-long battle between Brittney Spears and her father showed how things can go wrong, as did the movie “I Care a Lot,” about a professional guardian who steals life savings from elderly people.

It is better for an adult child to care for a parent through the use of Power of Attorney and Healthcare Power of Attorney than having to go to court to gain control through a guardianship. Having these documents prepared while the person still has legal capacity to execute them is far easier and less costly. Guardianship and conservatorship are last resorts when no prior planning has been done.

How does it work? Rules vary from state to state, but generally, a person—referred to as the petitioner—files a petition with a local court to seek guardianship. A judge holds a hearing to determine whether the person in question, known as the respondent, meets the state’s standards for needing a guardian. The respondent has a right to have an attorney represent them, if they do not feel they need or want to have a guardian.

Guardianship does more than give another person the right to make financial decisions for another person. Under guardianship, a person may lose the right to vote, marry, travel, or make certain medical decisions. Courts are often reluctant to take away all of these rights. In many states, courts are allowed to limit the guardian’s authority to managing bills and maintaining a home.

The least intrusive option is preferable, which would be using the Power of Attorney and Health Care Power of Attorney in the first place.

Another point—most courts will not grant a guardianship, if a person is physically disabled but mentally sharp. Making bad decisions, like handling money irresponsibly, or keeping company with people who are potentially preying on a senior, is not enough reason to put someone under guardianship. You cannot always protect someone from themselves.

However, the need for guardianship is clear if a person has suffered a stroke and is in a coma or is suffering from dementia. Other reasons are severe depression where a person cannot function or delirium, when a person is unaware of their environment and confused by everything around them. Delusional disorders are also reasons for guardianship.

When the person meets the standard of need, the courts typically prefer to appoint a family member. However, if there is no appropriate person, a public guardian paid by the state or a professional guardian paid by the family can be appointed.

Filing a guardianship petition can cost thousands of dollars, and a professional guardian can charge upwards of $250 an hour. Most guardians are well meaning, but often run into conflicts with family members. The guardian’s job is to protect the person, not serve the interest of the family. If the family’s sole interest is in protecting their inheritance, the guardian can find themselves in a difficult situation.

Family members serving as guardians can also find themselves in difficult situations. The guardian, whether a professional or family member, must keep meticulous records of any monies spent and the tasks performed on behalf of the person.

The better solution is to prepare in advance with a Power of Attorney, Healthcare Power of Attorney and all of the estate planning documents needed so the family can act without court intervention, the costs of applying for guardianship and the possibility of a professional guardian being appointed.

Reference: Kiplinger (Jan. 25, 2022) “What to Do When a Family Member Needs a Guardian”