Can guardianship be avoided? Proper planning is the key

Guardianship is a legal process in which a court appoints an individual or organization to manage the financial and medical affairs of a person deemed to be incapacitated or unable to make decisions on their own behalf. While guardianship can be beneficial for protecting vulnerable individuals, it also strips them of many personal rights, like choosing where to live, freedom of travel, managing financial assets or even deciding on medical treatments.

Guardianship is a serious legal responsibility. When it's determined that an older adult cannot make decisions on their own due to mental or physical incapacitation, the court may appoint a guardian to make decisions on their behalf. The process for establishing this guardianship varies by jurisdiction, but there are several general steps that take place, which include:

• Petition for guardianship: The process begins when someone (often a family member, friend or social worker) submits a petition to the local court requesting guardianship for the older adult. This petitioner must generally demonstrate a valid concern about the individual's capacity to handle their affairs.


• Notification: The older adult, referred to as the "respondent" or "proposed ward," must be notified about the guardianship petition. Other close family members are typically also informed. This ensures transparency and provides an opportunity for any objections.


• Evaluation and examination: The court usually requires an evaluation of the older adult to determine their mental and physical capacity. This evaluation is done by a qualified professional, such as a doctor, psychologist or social worker. A report is then prepared detailing the findings, and it's submitted to the court. This report plays a crucial role in determining whether guardianship is warranted.


• Appointment of a guardian ad litem: Some jurisdictions require the appointment of a "guardian ad litem" – a neutral third party (often an attorney) tasked with representing the best interests of the proposed ward. This person meets with the older adult, reviews the circumstances and provides the court with a recommendation.


• Hearing: A court hearing is scheduled, during which all relevant parties can present evidence. The petitioner will present the case for guardianship, detailing the older adult's incapacity. The proposed ward, usually through an attorney, has the right to contest the guardianship, present their evidence or propose a less restrictive alternative (like a power of attorney).


• Determination: If the judge determines that the older adult is indeed incapacitated and no less restrictive alternative will suffice, a guardian will be appointed. The scope of the guardian's powers is determined by the court and can range from limited to full guardianship, depending on the needs and capabilities of the older adult.


• Guardianship plan and reports: Once appointed, the guardian might be required to submit a detailed plan to the court, outlining how they intend to care for the ward. This includes decisions related to health, housing and finances. Periodic updates or reports might be required, detailing the ward's condition and any major decisions made on their behalf.


• Ongoing oversight: Guardians are typically subject to court oversight. This means they must maintain clear records of their actions and decisions and may need to seek court approval for significant decisions. If concerns arise regarding the guardian's actions, the court can review the situation and, if necessary, appoint a new guardian.


• Termination or modification: If the older adult's condition improves, or if the need for guardianship ends (for instance, if the individual passes away), the guardianship can be terminated or modified. A petition to end or modify the guardianship can be filed, followed by a hearing.

Guardianship for older adults is designed as a protective measure, ensuring that those who cannot care for themselves have someone to make decisions in their best interests. However, it's a significant step, affecting the individual's rights and autonomy. Thus, pursuing guardianship shouldd be approached with care, with a focus on the well-being and dignity of the older adult in question.

While many guardians genuinely care for and act in the best interests of their wards, there have been distressing instances of the grim reality of guardianship abuse. Three main types are financial exploitation, emotional and physical abuse and overreach and excessive control by the guardian.

The financial exploitation of older adults by those designated to protect their interests is an alarming issue. Some unscrupulous guardians see their position as an opportunity to siphon funds. They may liquidate assets, redirect income or engage in fraudulent activities, leaving the elder financially strained or destitute.

Exploitation can occur because guardians are entrusted with significant authority over the financial and personal affairs of their wards. This trust can be exploited when guardians prioritize their interests over those of the older adults they are supposed to protect.

In many cases, isolation leads to exploitation. Some guardians isolate their wards from family and friends, making it easier to control their finances without external scrutiny. Also, older adults often have complex financial portfolios, including properties, retirement accounts, pensions and other assets. Guardians, with their authority, can misuse these assets under the guise of “management.”

For example, guardians may sell properties or other assets without just cause, often at below-market values, benefiting friends, family or themselves. Or, some guardians give “gifts” from the ward's funds to themselves or others. There have been cases where guardians charge excessive fees for their services, rapidly depleting the resources of their wards. Guardians also may use the older adult's money for personal expenses, vacations or luxuries.

Emotional and physical abuse is another problem and can take many forms. Some guardians isolate their wards from family and friends, subjecting them to emotional torment. Physical abuse neglect or overmedication are also concerns.

In some instances, even well-meaning guardians may overly restrict and control the freedoms of their wards, making decisions that are more convenient for the guardian rather than in the best interests of the elderly individual.

The cause of guardianship abuse can be tied to several contributing factors. In many jurisdictions, oversight of guardians is minimal, making it easier for unscrupulous individuals to exploit their positions.

Older adults, especially those with cognitive impairments, might not understand or be aware of the exploitation. Due to limited resources or knowledge, many cases of financial exploitation go unreported. Even when they are reported, proving misconduct can be challenging.

Also, not all jurisdictions have robust screening processes for potential guardians. This can lead to individuals with a history of financial mismanagement or even criminal backgrounds being appointed as guardians.

While it's hard to quantify the exact extent of guardianship abuse due to underreporting, several high-profile cases have shed light on the potential for exploitation. For example, consider the case of April Parks, a former Nevada guardian, who was convicted in 2017 after exploiting elderly individuals under her care. She and her colleagues drained savings, sold properties and isolated the elderly from their families. Parks was found guilty on more than 200 felony charges.

Over the years, Florida has seen numerous cases of guardian misconduct. Reports of wards being isolated from families, overmedicated or moved against their wishes to more restrictive settings, and estates being drained through excessive fees or questionable financial transactions, have been widespread.

To reduce the risk of unnecessary guardianships and potential exploitation, individuals can utilize a number of legal strategies. One of those strategies is to create legal documents that name agents who will act on your behalf if you become incapacitated or declared incompetent and in need of a surrogate decision-maker. By properly naming the people responsible for handling your affairs, you can avoid the need for a judge to appoint a guardian – likely someone who is a complete stranger – for you. These documents include powers of attorney and a revocable living trust.

Powers of attorney are essential estate planning documents that allow an individual to designate someone they trust to manage their financial affairs and health care decisions if they become incapacitated and act on their behalf in specified matters. The use of a power of attorney for financial matters and a power of attorney for health care can play a pivotal role in sidestepping the often cumbersome and invasive process of court-appointed guardianship. That’s because a power of attorney is a proactive measure, meaning an individual creates it while they are of sound mind. This foresight allows for the appointment of a trusted agent to handle affairs if and when the individual becomes incapacitated.

By allowing individuals to choose their agents in advance, powers of attorney ensure that decisions are made by someone the principal trusts. This stands in contrast to a guardianship, where the court chooses, which might not align with the individual's personal preferences or family dynamics.

The health care power of attorney is also known as a health care proxy or medical power of attorney. This document allows the principal to appoint an agent to make medical decisions on their behalf if they're unable to do so. With a power of attorney for health care in place, there's less likelihood that a court will see the need to appoint a guardian to make medical decisions.

A financial power of attorney, meanwhile, allows the agent to handle the principal's financial affairs, like paying bills, managing investments and handling other monetary matters. A financial power of attorney can prevent the need for a court to appoint a conservator or guardian to manage the individual’s financial assets.

Another feature of powers of attorney is that they provide clarity and specificity. They can be tailored to the principal's wishes, specifying what powers the agent has, whether broad or limited. This clarity reduces ambiguities and potential disputes, further diminishing the perceived need for a guardian.

A revocable living trust is a versatile estate planning tool that, among its many benefits, can be instrumental in avoiding the need for guardianship.

A revocable living trust is created by an individual, often referred to as the grantor or settlor. When the trust is established, assets (such as real estate, bank accounts and investments) are transferred into the name of the trust, a process known as trust “funding.”

While the grantor is alive and mentally competent, they typically act as the trustee, meaning they retain control over and can manage all the assets within the trust. Being "revocable," the trust can be altered, amended and even dissolved by the grantor at any point while they are still competent.

The trust document can specify the conditions under which the grantor is deemed incapacitated. This can be based on medical evaluations or the testimony of specified experts.

Crucially, the trust also allows the grantor to pre-select a successor trustee (or multiple successor trustees in a specific order). This person or entity will manage the trust's assets should the grantor become incapacitated.

In the absence of such a trust or other legal provisions, if the grantor becomes incapacitated, a court might need to appoint a guardian or conservator to manage the individual's trust asset affairs.

With a revocable living trust in place, the transition of management is pre-determined. Upon the grantor's incapacitation, the successor trustee can step in seamlessly without the need for court intervention. The trust document will guide the successor trustee on how to manage and use the assets for the benefit of the incapacitated grantor.

Privacy and efficiency are other benefits of using a revocable living trust as a strategy to avoid the appointment of a guardian.

Guardianship proceedings are typically a matter of public record. A revocable living trust, on the other hand, maintains privacy, as the details of the trust and its administration remain private. Also, the process of a successor trustee taking over is typically much quicker and more efficient than the court-driven guardianship process.

A well-drafted trust also can include provisions that make it challenging for disgruntled family members or others to contest the grantor's wishes or the successor trustee's actions, further reducing the risk of court interventions and potential guardianships.

In short, powers of attorney and a revocable living trust provide a proactive mechanisms for individuals to ensure their assets are managed according to their wishes, even if they become unable to do so themselves. By determining in advance how assets should be handled during periods of incapacity, and by whom, the trust becomes an invaluable tool for avoiding the complexities, expenses and potential conflicts associated with guardianship proceedings.

While guardianship can provide necessary protection for some, it's essential to be aware of its pitfalls and potential for abuse, especially for older adults. Proactive estate planning and maintaining vigilant oversight of guardians can go a long way in preventing abuses and ensuring the well-being of our aging population.