By: Jennifer M. Tenney (firstname.lastname@example.org)
THE POTENTIAL PAIN OF GUARDIANSHIP
Guardianship is a legal process. When a person becomes incapacitated and can no longer make sound decisions about their care and/or their finances, if they have not put the proper paperwork in place prior to becoming incapacitated, now the court must get involved and determine, through a series of examinations, legal filings, and hearings, that the person is incapacitated. The court must determine to what extent the person is incapacitated, and appoint someone (a guardian), whether they be a family member or a professional, to make decisions for the incapacitated person (legally called a “ward”) which that person can no longer make for themselves.
When Guardianship is necessary, I try my very best to make it a smooth and efficient process, but even in the very best case scenario, it involves thousands of dollars in legal fees and examination by doctors unknown to the incapacitated person. Even in the best case scenario, it results in continued court oversite, including at least yearly accountings and periodic filings and approvals needed from the Judge for expenses of the Guardianship estate to be paid. In the very best case scenario, the Guardian is a loving family member, who refuses compensation, and is acting only in the best interest of the incapacitated person. Unfortunately, that best case scenario can be rare – there is often fighting amongst family members for control that can ruin relationships and tear apart families. Opposing family members may file opposing Petitions requesting to be appointed as Guardian, not in the best interest of the ward, but in order to gain control of the finances. If it’s not a family member, the Guardian may be a professional – who may be excellent and make good decisions in the best interest of the ward, or unfortunately, may be not as excellent and may make poor decisions that result in poor care of the ward. And a professional Guardian, even if excellent, will be a stranger – an expensive stranger. The Guardianship process and expense can be avoided through a couple of simple and inexpensive documents signed while you still have capacity and the ability to make your own decisions and plans.
DURABLE POWER OF ATTORNEY
The first and most important document for avoiding a Guardianship is a Durable Power of Attorney. In a Durable Power of Attorney you appoint an “agent” or “attorney-in-fact” who can stand in your shoes financially and can sign contracts on your behalf, sell and manage property, handle investments, pay bills, sue and be sued … basically, they can do anything you can do financially. A Power of Attorney is considered a less restrictive means of taking care of your finances when you become incapacitated, so a Guardianship is not necessary. Your appointed agent can pay your bills and take care of your finances without the court’s involvement.
The important thing to understand, however, is that Florida law does not allow a “Springing” or “Non-Durable” Power of Attorney. A “Springing” or “Non-Durable” Power of Attorney would only go into effect when you are incapacitated. As Florida only allows for a Durable Power of Attorney, the Power of Attorney goes into place and is valid as soon as it is signed. So while it is an important document for avoiding Guardianship, it is also a scary one since your appointed agent may choose to use it, if they know about it and have access to it, before you are actually ready to give up financial control. To mitigate this, I suggest three things: first, to make sure you appoint someone you trust to act in your best interest; second, to not give the appointed agent a copy of the Power of Attorney document (instead I recommend telling the agent that one exists and make sure that it can be found should they become incapacitated); and thirdly, it is usually a better solution to have a Revocable Trust in addition to a Power of Attorney.
A “Revocable Trust” is a document that spells out a plan for how your assets should be managed and used during life, during potential incapacity, and after death. “Revocable” means that it can be changed at any time. You can be Trustee of your own Revocable Trust until you are incapacitated or until you choose to resign. So by having a Trust and having most of your assets in your Trust, you can keep control of your assets for as long as you are able to serve as Trustee. You can appoint a Successor Trustee who, like your agent under your Power of Attorney, should be a trusted person, but unlike in a Power of Attorney, a Successor Trustee will not have power until you are incapacitated. Furthermore, in a Revocable Trust, you can specify how you would like to be taken care of during any incapacity. For example, you can specify that it is your wish to remain home, if possible, and be taken care of by in-home caregivers, even if that is more expensive than assisted living. If you have a Trust, then the Power of Attorney is only effective against assets outside of the Trust, so it still helps you avoid Guardianship, but you get to maintain current control.
HEALTH CARE SURROGATE
To avoid Guardianship, you should also have a Designated Health Care Surrogate. Unlike the Power of Attorney, this is “Non-Durable,” which means that you are designating the person who will make your health care decisions only if you are unconscious or incapacitated. Unlike the Power of Attorney, I recommend giving copies of these to your designated Health Care Surrogate(s) so that they can quickly get information from doctors or hospitals in the event of an accident, and can quickly give consent to necessary treatment.
With a Durable Power of Attorney and a Health Care Surrogate you can avoid a Guardianship. Making these decisions and signing these documents now can avoid a huge amount of expense, court involvement and family discord in the future. In addition, a Revocable Trust can give you even more control over how you want to be cared for and prevent an (often well- meaning) agent from taking control over your finances before you are ready to give up control. Make the decisions now to avoid the pain later.
ABOUT THE AUTHOR
Jennifer Tenney has been an attorney at the law firm of Woodward Pires & Lombardo, P.A. since 2005. She focuses her practice in Elder Law, Estate Planning, Probate, and Real Estate. Jennifer is a Marco Island native. She graduated from Lely High School as salutatorian before going on to graduate summa cum laude from Rollins College, and with honors from Duke University School of Law. She is a graduate of Leadership Marco and is a Past President, Treasurer and Secretary, and current Director of the Marco Island Noontime Rotary Club.