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Do you have elderly parents? Are you concerned about them getting Alzheimer’s or other forms of dementia or becoming incapacitated in the future? Perhaps for yourself?
Planning, especially in the early stages of your increasing incapacity can be very helpful to those who want to care for you. As your incapacity increases, you may not be able to articulate what you want or even remember the plan you created for your own care! However, if you plan ahead and establish what you want, your family and caregivers can look after you the way you would if you were still capable. Furthermore, if a court should get involved in your case at a later time, your plans would be readily available to help the judge make the best decision on your behalf.
The persons providing care on your behalf are called Guardians or Conservators. Some states use the term Guardian for someone who takes care of your personal needs and Conservator for someone who takes care of your financial affairs. We’ll refer to both roles as conservator, conservatorship for the remainder of the article. In most cases, one physical person will have both roles.
There are several methods to establish how someone can take care of you. The most common are explained below. If you plan ahead, you can avoid the costly and uncomfortable step of having a conservator be responsible for you and also to the Court.
- Name a conservator in advance of your incapacity
- Create your Health Care Directives and appoint a Durable Power of Attorney
- Set up a living trust
- Set up a conservatorship
I. Name a conservator in advance of incapacity
You can name a primary and alternate conservator in your Last Will and Testament (LWT) or a similar separate document while creating your estate plan. To see how to create a Will and related documents click here.
II. Create your Health Care Directives and appoint a Durable Power of Attorney
You can create these two documents which will spell out who will take care of your health needs and who will take care of financial and other needs.
- Your health care directives include your Living Will, Organ Donation forms, your Health Care Power of Attorney and in some states a Physician’s Order for Life Sustaining Treatment (POLST). Some states have combined these into one document (form) called the Physician’s order (POLST).
A Health Care Power of Attorney or Proxy is someone who knows your wishes about your medical care and can make decisions for you if you cannot.
It is a good idea to file these documents with your doctors, your nursing homes and provide copies to the person you chose. It is also a good idea to name an alternate Proxy in case the primary Proxy cannot fulfill these duties on your behalf.
2. Durable and “Springing” Power of Attorney
A durable Power of Attorney is someone you appoint to manage all aspects of your life such as health, medical affairs, personal affairs, financial affairs such as your investments, bank accounts and other financial assets and pay your bills and anything else you need. This person who is usually called an agent has broad power over all your affairs. You can make the agreement effective immediately or when someone, usually a doctor, certifies that you are incapacitated, called a Springing Power of Attorney.
1. If this person is someone you trust implicitly you can make the agreement effective immediately and if you know that the person will not deliberately do anything to cheat or harm you. You can also keep with original signed document with an attorney or advisor whom you trust, until it becomes necessary. Do let the person know where the form is because they’ll need the original to show to banks and other institutions.
2. If you don’t trust anyone to take care of your finances and are capable of managing it on your own, you can create a “Springing” Power of Attorney. Usually, a doctor will need to declare you incapable of taking care of your own finances and then your agent can manage your finances for you. Please consult an attorney so this can be set up properly for your circumstances.
You can change your mind and revoke these agreements at any time.
III. Set up a Living Trust
You set up a living trust when you are still alive. You transfer your assets into the trust and name a trustee. This trustee is then able to manage your assets for your benefit during your life and upon your death manage the assets according to your wishes specified when you set up the trust.
The most popular type of trust is the revocable living trust, which allows the trustor (the person creating the trust) to make changes to the trust during his or her lifetime. Setting up a trust allows you to name a trustee who will handle your finances in case you become incapacitated.
If you are contemplating trusts, you may want to consult an attorney.
However, setting up the trust provides for financial management but not for your personal care. You’ll need to name a Durable Power of Attorney so that someone can be responsible for your well-being, such as food, clothing, shelter, healthcare and anything else you may need.
IV. Set up a Conservatorship
Conservators are appointed by a Court whereby the court appoints someone to manage another person’s day-to-day personal care or financial affairs. It might require expert testimony from doctors, psychologists and others. It might also require you to provide a lot of information about the adult you are seeking guardianship for as well as yourself.
Court is only persuaded of someone’s incapacity when the adult is incapable of taking care of themselves or their finances at advanced stages of dementia, is in a coma or has other serious conditions. Court will also look at other estate planning documents that the adult has already set up when making a decision about conservatorship.
Court is generally pre-disposed to provide the adult with as much freedom as possible.
You will likely need a lawyer to navigate all the forms and requirements of the court. And, you will be required to report to the Court on a periodic basis.
a. Who is a conservator?
A conservator is someone who has legal responsibility for the adult for either day-to-day care or that of financial affairs or both.
There are two conservator roles 1) Conservator of the Person and 2) Conservator of Property or Estate. Both may be necessary. If both are needed, it would be ideal if you can recommend one person for both roles. Both are appointed by the Court.
1. Conservator of the Person
A conservator of the person makes day-to-day decisions for the adult. The conservator is responsible for food, clothing, safety, health care, finances and love and support. It is as if the conservator took on the role of “Parent”. Think of it as “What I would do for myself”.
2. Conservator of Property or Conservator of Estate or Trustee
A conservator of property, estate or Trustee is someone the Court selects to manage your finances.
Just because you have a conservator, it doesn’t mean he/she can do anything with you personal well-being or your money. Conservators are under court supervision and need to get the Court’s permission before the conservator can move you out of state, put you in a retirement home, sell your house, change your Will or any other serious undertaking.
The Court will request an inventory of the adult’s estate with the fair market value of each item and provide annual reports to the Court of the status of these items. The conservator may also be required to post a bond.
The Court will also request reports of medical and other reports to ensure the adult’s well-being.
3. Can one person have both roles?
Yes. Most of the time, these roles are held by the same person. Having two different people serve in these capacities may cause delays in making decisions and raise conflicts between the two decision-makers trying to protect you. If you have substantial assets and need a professional to manage them and/or it is too complicated to manage because of various trusts and entities, the Court may appoint a different person as Guardian of the Estate, such as an attorney or accountant.
Note that hospitals and nursing homes cannot be appointed conservators of either the person or the estate and financial institutions cannot be appointed as conservators of the person.
Also, when a conservator is appointed, a successor conservator can be named as well. In case the appointed conservator cannot perform his duties, resigns or is removed, the successor can take over. The Court will need to issue a ruling confirming the appointment of the successor conservator.
4. How does a Judge establish incapacity?
The definition of incapacity is a legal standard not a medical one. The judge will look at any limitations the adult had or has such as mental deficiency, mental retardation, dementia of some kind, is unconscious or semi-conscious.
5. Do conservators get paid?
Normally, family members who serve as conservators are not paid, although, expenses may be reimbursed from the adult’s funds. A professional would be paid and the judge decides how much.
If the conservatorship is a time-consuming job preventing someone from working, the judge can make a decision to pay a family member.
6. Is it a good idea to name a family member as a conservator?
It is best to name someone who knows the adult. It will most likely be an adult child or sibling who lives close by. If you and your family members disagree on who is best to care for the elder have an open discussion with everyone who is involved. Agreeing on who will take on the conservator roles will help reduce stress and legal costs.
Regardless, it would have to be someone who has enough time and energy to take care of the adult as well as his finances. If the conservator isn’t financially savvy, the judge may appoint a separate conservator of the estate, perhaps a professional.
7. What happens if he/she mismanages assets and doesn’t follow through on the job?
A conservator is obligated to do the best job possible. They may or may not be a financial genius. If you or other family members suspect that the conservator is stealing or being reckless, you can file a petition in court to have this person removed. The judge will make the final decision.
8. When does a conservatorship end?
It ends when the person dies or recovers his capacities. If may also end if the conservator resigns, moves or is no longer capable of performing his duties and a new conservator is appointed.
9. How does one set up a conservatorship?
A conservatorship is setup when someone files a petition with the Court. A petition is a form available from the Probate Court or Circuit Court of the County of your residence. The petition usually includes information about you, your proposed conservator, the person filing the petition, and evaluations by your physicians or psychologists.
Any of the following persons or institutions can file a petition for you:
- The person you nominated to be your conservator
- Someone who has been taking of care you
- The person you named as your Health Care Proxy or Durable Power of Attorney
- A family member who is concerned about your ability to take care of yourself
- A facility providing for your care that needs a conservator to approve your care
- Social Services
Appointing a conservatorship is time-consuming and may be expensive as lawyers and financial advisors may be involved. Ideally, you have created your estate plan and have spelled out your wishes. See article here about creating a Will and related estate planning documents here.
This article is for information purposes only. Laws differ from state to state. Please consult an attorney for legal advice about your particular situation.
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