Elder Law Firm of Steve Bailey

Is There a Difference Between a Guardianship and a Conservatorship for the Elderly?

“Guardianships focus on the daily welfare of the senior, and conservatorships deal with the money.”

The words “guardianship” and “conservatorship” refer to legal proceedings that appoint a person or organization to care for and decide for someone who cannot do those things for himself. Although the terms are related, is there a difference between a guardianship and a conservatorship for the elderly?

Yes, there is a difference. Although people sometimes use the terms interchangeably, a guardianship is not the same thing as a conservatorship. Guardianships focus on the daily welfare of the senior, and conservatorships deal with the money.

Guardianship in a Nutshell

There are two steps to a guardianship:

1. The court declares a person to be incompetent not capable of making or communicating legally binding decisions for herself, due to illness, injury, cognitive impairment, or other reasons. The person is now a “ward.”
2. The court appoints someone to serve as the guardian of the ward, to make decisions in the ward’s best interests, such as where she will live, or what medical treatments she needs.

When a person has lost legal capacity, he can no longer sign documents, such as a will, living trust,  health care proxy or a power of attorney. An elderly person can lose capacity after a stroke, an accident, an illness or due to a medical condition like Alzheimer’s, or any situation in which he cannot make good decisions for himself or communicate his wishes.

Even though your aging loved one may resist giving up control and may be angry about being found incompetent, it may be necessary to get a guardianship to protect her safety. Some seniors neglect their health and self-care, resulting in malnutrition and deplorable hygiene. Your elderly relative might forget she left the stove on, and accidentally set fire to the kitchen. She may wander the streets and get mugged, lost, or suffer from exposure to the elements. As a guardian, you can arrange for her to live in a safe environment and get the care she needs.

Conservatorships

Some courts, including Alabama’s, treat the authority to handle the financial affairs of a senior separately, as a conservatorship. Other courts bundle the powers into one label, as a guardianship. If the court compartmentalizes the two roles separately, one person can fulfill both roles, or one person can serve as conservator and another person can be the guardian. It is best when the guardian and conservator work well together. A conservatorship must go through the courts, just like a guardianship.

A conservator deals with the senior’s cash flow, investments, and expenditures. She oversees the ward’s income and investments, pays the bills and creates a budget to make sure the senior can afford his lifestyle.

It is unnecessary that an individual serve as guardian or conservator. It may be appropriate for an agency or other entity to serve instead of a person, especially when the senior has no family nearby who can or should serve. A lawyer, accountant, or bank can also serve as conservator.

This posting discusses the general law, but the law in your state may be different. Talk with an elder law attorney in your area.

References:

Caring.com. “The Pros & Cons of Guardianship or Conservatorship: How to Know If It’s Right for You.” (accessed November 16, 2017) https://www.caring.com/articles/pros-cons-guardianship-conservatorship

Alzheimers.net. “Making Sense of Guardianship.” (accessed November 16, 2017) http://www.alzheimers.net/guardianship-for-parent-with-alzheimers/

Sollitto, Marlo. “How to Get Guardianship of a Senior.” (accessed November 16, 2017) https://www.agingcare.com/articles/how-to-get-guardianship-of-elderly-parents-140693.htm

Tackling the Legal Issues Associated with Caring for a Parent with Dementia

“Your parent can sign several legal documents that will protect him and handle his legal issues. These documents include a durable power of attorney for health care decisions, a durable power of attorney for financial matters and a will or living trust.”

When caring for a parent with Alzheimer’s or some other form of dementia, it is easy to be overwhelmed with anxiety over the constant daily issues of her medical care and making sure that she does not wander off or accidentally set the house on fire while cooking. There is, however, another concern you should address for your parent, and that is tackling the legal issues associated with caring for a parent with dementia.

An adult suffering from dementia is vulnerable to physical harm and financial exploitation from others. He can do things that expose himself and others to danger and can create legal liability that could risk his assets. You can do nothing and hope for the best, or you can be proactive and protect your parent through the savvy use of legal documents.

When Your Parent is Still Legally Competent

If your parent still has the legal capacity to sign legal documents, it is much easier and less expensive to address her issues. The conversation with your parent may not be the most comfortable talk you have ever had, but it is necessary. You can explain that by preparing the documents now, your parent controls her outcome, rather than later asking a court to enter an order.

Your parent can sign several legal documents that will protect him and handle his legal issues. These documents include a durable power of attorney for health care decisions, a durable power of attorney for financial matters and a will and/or living trust.

A durable power of attorney for health care decisions will designate someone to make medical decisions for your parent when she cannot speak for herself or make appropriate health care choices. This document should name someone your parent trusts to make medical and life-or-death choices, including life support, resuscitation, feeding tubes and hydration. Your parent should have a candid conversation with the designated decision-maker to make her wishes and convictions known. She can change or revoke this document at any time, as long as she is competent.

With a durable power of attorney for financial matters, someone can manage your parent’s business and financial affairs for him. The power of attorney should be durable; otherwise, it will expire when your parent loses legal capacity. He can change or revoke this document at any time if he is legally competent.

Your parent must make a will and/or living trust while she is still legally competent, because she cannot make a valid will once she becomes incompetent. Both a will and a living trust allow her to decide who will inherit which items from her, but a living trust can also designate a trustee who can manage her financial and business matters, while she is still alive. The living trust can specify that the trustee’s authority will continue, in the event of your parent’s incapacity or death.

What to Do If Your Parent Is No Longer Competent

If your parent has lost legal capacity due to dementia or other health issues and he did not prepare the documents discussed above while he was competent, you may need to get a guardianship and conservatorship over him. A guardianship lets you take care of his daily needs, such as where he lives and the medical care he receives. A conservatorship empowers you to take care of his financial matters.

The court must declare him incompetent before it can grant a guardianship or conservatorship. These legal actions are expensive and can take several months or longer. It is better to get his documents completed, while he still has legal capacity.

This posting discusses the general law, and the law in your state can vary. Talk with an elder law attorney in your area.

References:

Alzheimer’s Association. “Planning Ahead.” (accessed November 16, 2017) https://www.alz.org/care/alzheimers-dementia-financial-legal-planning.asp

Money. “5 Essential Documents for Protecting a Loved One with Dementia.” (accessed November 16, 2017) http://time.com/money/4127552/dementia-care-legal-documents-need/

FindLaw. “Legal Issues: Caring for Parents with Dementia.” (accessed November 16, 2017) http://elder.findlaw.com/elder-care-law/legal-issues-caring-for-parents-with-dementia.html

Understanding Conservatorships

“In a conservatorship, the court gives the conservator the legal authority to handle the person’s finances. The conservator can be an individual or an organization.”

As your parents age, you might be wondering if they need help managing their affairs. You do not want to take away their dignity and independence, but you also do not want to stand by and just let their life savings disappear. There are two legal proceedings that can help you protect your parents -  guardianships and conservatorships.

In a guardianship, a judge would have to make a finding that your parent is not capable of making her own decisions. Guardians make arrangements for the person’s day-to-day care and well-being, such as health care, personal care, housing, meals and protection. After the court approves the guardianship, your parent will not have the legal authority to act for herself. In some states, she will have the label of being an “incompetent.” If you want only to protect your parent’s finances, you might consider getting a conservatorship instead of a guardianship. This article will help you in understanding conservatorships.

In a conservatorship, the court gives the conservator the legal authority to handle the person’s finances. The conservator can be an individual or an organization. In some states, a conservatorship can be filed voluntarily, at your parent’s request. The court still has to make a finding that your parent is unable to manage his finances, but it is considered less drastic than a guardianship. Your parent can still make his own non-financial decisions. He loses far less freedom and dignity.

Temporary conservatorships

In an urgent situation, the court can appoint a temporary conservator until a general conservator can be appointed. The temporary conservator has limited powers. The temporary conservatorship is for a short time period, usually only a month or two. A temporary conservator cannot be appointed, unless you also file a petition for a general conservator.

Responsibilities of a conservator

If the court appoints you to serve as your parent’s conservator, you will have to manage her financial matters. These duties can include:

• Paying her bills
• Finding and organizing her assets
• Collecting her income (Social Security, pension, and other income)
• Creating a budget for her and evaluating what she can afford
• Protecting her assets
• Prudently investing her money
• Keeping her informed about her financial condition

Conservators must give the court an accounting of their activities on a regular schedule. The court can terminate a conservatorship.

Why the courts terminate conservatorships

There are several reasons why courts terminate conservatorships. Some of these reasons are:

• The conservator is unable or unwilling to continue to serve. If the conservator dies, the conservatorship ends. If he becomes ill or cannot go on serving, the court can allow the conservator to resign.
• If the conservator is not fulfilling his duties, the court can remove him and appoint a replacement conservator.
• When the conservatee dies, the conservator must wrap up the case with the court.
• If the conservator has to spend all of the assets for the care of the conservatee, there is nothing left for the conservator to manage.
• If the conservatee’s condition improves to the point that she is capable of managing her financial affairs again, the court can release the conservator from his responsibilities.

This article discusses the general law. The laws are different in every state.  Therefore, please talk with an elder law attorney in your area.

References:

California Courts. “Conservatorship.” (accessed August 8, 2017) http://www.courts.ca.gov/selfhelp-conservatorship.htm

ElderLawAnswers. “Guardianship and Conservatorship.” (accessed August 8, 2017) https://www.elderlawanswers.com/guardianship-and-conservatorship-12096

If You Don’t Have a Power of Attorney in Alabama How Do You Obtain the Authority to Help a Disabled Senior?

Unfortunately, you must ask a judge to give you the documents that substitute for a power of attorney. There are several documents you made need depending upon the circumstances:

• Guardianship of the person
• Conservatorship of the finances (also called conservatorship of the estate)
• Emergency guardianship

“The purpose of any type of guardianship or conservatorship is to protect the senior.”

Alabama requires that guardianships and conservatorships go through the courts. If you are exploring how to best care for an aging loved one, you will want to know what types of guardianships there are, and which options are best for your friend or relative.

Does a senior under guardianship still have legal rights?

With all legal guardianships, the court transfers the right of the senior to decide for himself to the Guardian. This means the senior no longer has the authority to decide for himself.

Courts do not enter into these arrangements lightly since guardianship puts the senior at the mercy of the guardian. The court must first make a finding that the guardianship is in the elder’s best interests. The court must determine that it is better for the senior to have the guardian decide for him than to make them on his own. Any type of guardianship protects the senior. If the guardian mistreats the senior, the court can remove the guardian.

What is guardianship of the person?

When a senior loses the ability to decide about her day-to-day living situation or her health care, it may be necessary for the courts to appoint a guardian of the person. The guardian arranges home health care, making decisions about surgery and other medical procedures, arranging for a caregiver, moving the senior into an assisted living facility, making end-of-life decisions, and managing the daily well-being of the senior.

What is conservatorship of the finances?

A conservator of the finances also called a conservator of the estate, has the authority to act on behalf of the ward (the senior) on financial matters. This can include selling the ward’s house when he moves into an assisted care facility, handling his investments, paying his bills, managing his Social Security and retirement income and any other business or financial matters for the ward. Having a guardianship of the estate can protect the elderly person from scams and fraudulent schemes that prey on the aged.

When is an emergency guardianship appropriate?

It may be necessary to obtain an emergency guardianship if your loved one’s medical condition suddenly deteriorates, or he suffers a serious accident or sudden medical event such as a stroke. If the senior is the victim of financial abuse, whether by professional scammers, friends, family, or caregivers, you may also need to get emergency guardianship order to prevent irreparable economic harm.

Are there alternatives to guardianship?

Yes, but they require taking action only if the senior is still legally competent. These alternatives include:

• Joint bank accounts
• A trust
• Durable power of attorney (for financial and business decisions)
• Advance Directive for Healthcare
• Designating someone as representative payee to receive Social Security payments

Besides being competent when taking these steps, the senior must also have a friend, relative or company (such as a bank) who can be trusted to act in the best interests of the senior, and be willing to take on this responsibility.

The laws on guardianship and conservatorship differ from state to state. Therefore, consult with an elder law attorney in your area, if you have questions about a legal guardianship.

References:

Garvin, Lisa. “Guardianship and Caregiver Liability.”https://www.americanbar.org/newsletter/publications/gp_solo_magazine_home/gp_solo_magazine_index/guardianshipliability.html

Sollitto, Marlo. “How to Get Guardianship of a Senior.” https://www.agingcare.com/articles/how-to-get-guardianship-of-elderly-parents-140693.htm

A Place For Mom, Inc. “Making Sense of Guardianship.” http://www.alzheimers.net/guardianship-for-parent-with-alzheimers/  

Details on the All-Important Durable Power of Attorney

“Look at it from the institution’s point of view: how do they know the Durable Power of Attorney is valid?”

When you are looking at your estate planning, a Durable Power of Attorney (DPOA) is an important document to have. It lets you designate another individual to handle your financial affairs if you can’t do so.

According to The (Wichita Falls TX) Times Record News article, “Tips to make a Durable Power of Attorney work,” sometimes the person to whom you give authority—known as an “agent”—will visit your financial institutions and unsuccessfully attempt to get something done on your behalf. The bank might say “no”, even when they see your perfectly legal DPOA.

Sometimes banks don’t want to recognize a valid POA.

In the eyes of the bank, the DPOA could have been rescinded or even forged. Financial institutions want to do everything they can to protect themselves from lawsuits and damages. Using their own DPOA form is one of those protections. They may want you to use their own forms.

Another good idea is to introduce your agent to your local bank or financial institution, allowing them to meet and get to know each other.

In the event the agent is unable to get the bank’s approval, they should ask why. It may be as simple as changing the wording in the document. You can also ask your estate planning lawyer to speak with the bank’s legal department. This may cut through some of the red tape that can be created by front-line staff misinterpreting the bank’s requirements or rationales.

If all else fails, particularly if you’re the agent and the principal isn’t competent, you may need to file suit to have the DPOA honored. In some rare occasions, a guardianship is requested.

What if you are hospitalized in a coma after a car accident? Were that to happen, who would complete and file your taxes, pay your bills and handle all of the minor and major issues you normally do for yourself?

Work with a qualified estate planning attorney to help you ensure that all of your bases are covered in advance.

Reference: The (Wichita Falls TX) Times Record News (March 11, 2017) “Tips to make a Durable Power of Attorney work”

Think Hard About Naming Your Beneficiaries

“Before you name a beneficiary, you may want to gain a basic understanding of beneficiary designations.”

One of the biggest decisions in estate planning is determining the beneficiaries on your life insurance policies, pension plan accounts, IRAs, and annuities.

Some people automatically put down their children or nieces and nephews and then fail to consider the substantial estate and income tax consequences that each beneficiary may have from your generosity.

The Cape May County Herald, in “Naming Beneficiaries: What You Need to Know,” advises that it’s important to know that beneficiary designations supersede a will. Designating your beneficiaries is critical, but you also should talk with an experienced estate planning attorney to be certain that your beneficiary arrangements are consistent with other estate planning documents.

There are several different financial products and investments that allow you to name a beneficiary, but each of them may have some subtle nuances that can be hard to flesh out and understand.

Remember that designating a beneficiary is also a legal arrangement. A beneficiary designation requires that you include certain language to be certain that your wishes are accurately recorded and carried out. That is why it is important to consult with a qualified estate planning attorney when deciding who to name as beneficiaries and how to properly document your wishes. In addition to the specific person you’ll name as your beneficiary, you should consider the following:

• The age of the beneficiary, because most policies and plans won’t directly transfer assets to minors until a court approves a conservator;
• The ability of a beneficiary to manage assets, because if he or she has trouble with finances, a trust in the person’s name may be a better option than a direct transfer; and
• When looking at your pension plan, the law requires a spouse to be the primary beneficiary of the account, unless he or she waives this designation in writing.

Go with a Pro. Naming beneficiaries is not a simple matter. It requires some real planning and thought to be sure that your decisions are consistent with your financial and estate planning goals.

An experienced estate planning attorney will help you to review your beneficiary designations and suggest options that are appropriate for your situation.

Reference: Cape May County (NJ) Herald (March 17, 2017) “Naming Beneficiaries: What You Need to Know”