The Difference between Power of Attorney and Guardianship for Elderly Parents

The primary difference between guardianship and a power of attorney is in the level of decision-making power, although there are many intricacies specific to each appointment, explains Presswire’s recent article entitled “Power of Attorney and Guardianship of an Elderly Parent.”

The interactions with adult protective services, the probate court, elder law attorneys and healthcare providers can create a huge task for an agent under a power of attorney or court-appointed guardian/conservator.  Children acting as agents for a parent under a durable power of attorney or appointed as guardians or conservators by a court may be surprised about the degree of interference by other family members who disagree with their decisions for a loved one.     In addition to interference from siblings, family members and well-meaning neighbors and friends, a guardian, conservator, or attorney-in-fact that is named in a durable power of attorney may also encounter problems with health care providers who may be hesitant to recognize the need for an agent.

There are two types of durable powers of attorney.   One type of DPOA is called a springing durable power of attorney.   There are condition precedents in the document that must be satisfied before the DPOA and the attorney-in-fact named in the document have the authority to act on behalf of the principal.   For example, the document may require that one or two physicians provide a letter that state that the principal is unable to manage his or her financial affairs.    Another type of DPOA is effective immediately upon signing.     The latter is more common in older clients, as the chances of having health issues that render them incapacitated and the need to have agent “on board” without the impediment of securing letters to “push” a DPOA into effect more likely than with, for example, a healthy middle-aged individual that would prefer to have additional steps completed before access is granted to financial accounts.

In Massachusetts, a guardian has control over the person and can make decisions about the Protected Person’s living arrangements and health care decisions.   A conservator has control over the Incapacitated Person’s assets, such as bank accounts, investments, etc.     The equivalent of a conservator is the attorney-in-fact under a durable power of attorney.   Whether appointed by a court to take care of financial affairs of a person who did not execute a durable power of attorney prior to becoming incapacitated or the person named under a durable power of attorney to do everything that the principal could financially, the choice of this individual for an elder who no longer has the legal capacity to make medical or financial decisions is an important role.

Unlike the attorney-in-fact named in a durable power of attorney, court-appointed guardians and conservators are required to deliver regular reports to the court detailing the activities they have completed for the Protected Person or Incapacitated Person, as the case may be.    Regardless, however, both roles, DPOA or guardian/conservator must work in the best interest of the individual.

Some popular misperceptions about power of attorney and guardianship of an elderly parent include:

  • An agent under power of attorney can make decisions that go against the wishes of the principal
  • An agent cannot be removed or fired by the principal for abuse

Agents under a medical power of attorney, that is, health care proxy, and court-appointed guardians and conservators have a duty to go beyond normal efforts in caring for an elderly parent or adult.   They must understand the aspects of the health conditions and daily needs of the parent, as well as learning advocacy and other skills to ensure that the care provided is appropriate.

Ask an experienced elder law attorney about your family’s situation and your need for power of attorney documents with a provision for guardianship.

Reference: Presswire (Jan. 14, 2021) “Power of Attorney and Guardianship of an Elderly Parent”

 

How to Be an Effective Advocate for Elderly Parents

Family caregivers must also understand their loved one’s wishes for care and quality of life. They must also be sure those wishes are respected. Further, it means helping them manage financial and legal matters, and making sure they receive appropriate services and treatments when they need them.

AARP’s recent article entitled “How to Be an Effective Advocate for Aging Parents” says if the thought of being an advocate for others seems overwhelming, take it easy. You probably already have the skills you need to be effective. You may just need to develop and apply them in new ways. AARP gives us the five most important attributes.

  1. Observation. Caregivers can be too busy or tired, to see small changes, but even slightest shifts in a person’s abilities, health, moods, safety needs, or wants may be a sign of a much more serious medical or mental health issue. You should also monitor the services your family member is getting. You can take notes on your observations about your loved one to track any changes over time.
  2. Organization. It’s hard to keep track of every aspect of a caregiving plan, but as an advocate, you must manage your loved one’s caregiving team. This includes creating task lists and organizing the paperwork associated with health, legal, and financial matters. You’ll need to have easy access to all legal documents, like powers of attorney for finances and health care. If needed, you might take an organizing course or work with a professional organizer. There are also many caregiving apps. You should also, make digital copies of key documents, such as medication lists, medical history, powers of attorney and living wills, so you can access them from anywhere.
  3. Communication. This may be the most important attribute. You need communication for building relationships with other caregivers, family members, attorneys and healthcare professionals. Be prepared for meetings with lawyers, medical professionals and other providers.
  4. Probing. Caregivers need to gather information, so don’t be shy about it. Educate yourself about your loved one’s health conditions, finances and legal affairs. Create a list of questions for conversations with doctors and other professionals.
  5. Tenacity. Facing a dysfunctional and frustrating health care system can be discouraging. You must be tenacious. Here are a few suggestions on how to do that:
  • Set clear goals and focus on the end result you want.
  • Keep company with positive and encouraging people.
  • Heed the advice of experienced caregivers’ stories, so you understand the triumphs and the challenges.
  • Be positive and be resilient.

Reference: AARP (Sep. 24, 2020) “How to Be an Effective Advocate for Aging Parents”

 

Does a Trust Have to Be Funded to Be Valid?

Thinking you have divided assets equally between children by creating a trust that names all as equal heirs, while placing only one child’s name on other assets is not an equally divided estate plan. Instead, as described in the article “Estate Planning: Fund the trust” from nwi.com, this arrangement is likely to lead to an estate battle.

One father did just that. He set up a trust with explicit instructions to divide everything equally among his heirs. However, only one brother was made a joint owner on his savings and checking accounts and the title of the family home.

Upon his death, ownership of the savings and checking accounts and the home would go directly to the brother. Assets in the trust, if there are any, will be divided equally between the children. That’s probably not what the father had in mind, but legally the other siblings will have no right to the non-trust assets.

This is an example of why creating a trust is only one part of an estate plan. If it is not funded, that is if assets are not retitled, it will not work.

Many estate plans include what is called a “pour-over will” usually executed just after the trust is executed. It is a safety net that “catches” any assets not funded into the trust and transfers them into it. However, this transfer requires probate, and since probate avoidance is a goal of having a trust, it is not the best solution.

The situation as described above is confusing. Why would one brother be a joint owner of assets, if the father means for all of the children to share equally in the inheritance? When the father passes, the brother will own the assets. If the matter went to court, the court would very likely decide that the father’s intention was for the brother to inherit them. Whatever language is in the trust will be immaterial.

If the father’s intention is for the siblings to share the estate equally, the changes need to be made while he is living. The brother’s name needs to come off the accounts and the title to the home, and they all need to be re-titled in the name of the trust. The brother will need to sign off on removing his name. If he does not wish to do so, it’s going to be a legal challenge.

The family needs to address the situation as soon as possible with an experienced estate planning attorney. Even if the brother won’t sign off on changing the names of the assets, as long as the father is living there are options. Once he has passed, the family’s options will be limited. Estate battles can consume a fair amount of the estate’s value and destroy the family’s relationships.

Reference: nwi.com (Jan. 17, 2021) “Estate Planning: Fund the trust”