Power of Attorney, Guardianship and Conservatorship – An Educational Contribution from Danielle Cefalu, Attorney with Hurley Elder Care Law

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We continue to receive more and more questions from elder care professionals and members of the community about powers of attorney, guardianships, and conservatorshisp.  As such, this month’s newsletter will be devoted to these topics.

A power of attorney is a legal document in which one person (the principal) authorizes another (the agent or attorney-in-fact) to act on the person’s behalf.  There are financial powers of attorney which allow the agent to make decisions for the principal regarding financial matters, and healthcare powers of attorney which allow the agent to make decisions for the principal regarding healthcare needs.  Powers of attorney can be broad in scope, giving the agent the ability to make any and all decisions (a General Power of Attorney) or they can limit the agent’s authority by specifying the types of decisions the principal would like the agent to make on principal’s behalf (a Limited Power of Attorney).   The principal may also choose to sign a Durable Power of Attorney, meaning that the power of attorney document remains in effect when and if the principal become incapacitated.  Another option is to sign a Springing Power of Attorney meaning that the power of attorney would not go into effect until the principal becomes incapacitated.

While in theory, powers of attorney sound great and make sense, in the real world there are sometimes issues involved.  For instance we have a client for whom we prepared a Durable General Power of Attorney while she was still competent.  After she had progressed to mid to late stage Alzheimer’s Disease, her husband was attempting to collect all of her assets and a large bank told him that they would not recognize the General Power of Attorney.  They would only accept their own specific Power of Attorney that referred to the specific account.  This means that when one is doing planning, he or she needs to find out if all of the financial institutions they use will accept a General Power of Attorney, and if not, work around the problem by either using the institution’s form, adding someone else to the account name or through using a trust.  In Georgia, we currently have no “teeth” in our statutes the force institutions to accept Powers of Attorney.

As to the use of the Springing Power of Attorney, the main concern is determining just when someone is no longer capable of making decisions on his or her own.  Most of these documents provide for two physicians to state that the principal is no longer capable of making decisions for him or herself.  Many physicians are not comfortable with making such decisions.  Frequently with matters of competence, there is a divergence of opinion on whether the princiapl remains lucid.  When the parties do not agree, then the Springing Power of Attorney is not in effect and the only alternative is to go through a guardianship or conservatorship.

A guardianship is a legal relationship in which the Probate Court gives one person (the guardian) the power to make personal decisions for another (the ward).  A family member or friend usually initiates the proceeding by filing a petition in the Probate Court in the county where the individual resides.  A medical examination by a licensed physician is necessary to establish the mental capacity of the individual. If the judge finds that the person does not have the necessary mental capacity to care for his or her personal needs, the judge will appoint a guardian to make personal decisions for the individual.  Unless limited by the court, the guardian has the same rights, powers and duties over his ward as parents have over their minor children.  The guardian is required to report to the court on an annual basis.  The guardian is also liable if the ward is not properly taken care of.  The guardianship proceeding is not a pleasant situation and if it is contested it can be time consuming and costly.

A conservatorship is a legal relationship in which the Probate Court gives a person (the conservator) the power to make financial decisions for another (the protectee).  The court proceedings are very similar to those of a guardianship except the judge is determining if the individual has the capacity to manage his or her financial affairs.  If the individual is determined not to have the necessary mental capacity, the judge will appoint a conservator to make financial decisions for the individual. Often the court appoints the same person to act as both guardian and conservator.  Like the guardian, the conservator is required to report to the court on an annual basis.  Additionally, any time that a major decision needs to take place, the court has to be consulted.  This includes selling or refinancing real estate.  Also, some of the planning that may need to be accomplished for long term care matters may not be allowed by the probate court.

It is always preferable to have a power of attorney or a trust in place rather than having to file for guardianship and conservatorship.  However, if an individual becomes incapacitated and does not already have a power of attorney in place (for finances and healthcare) or a trust, then the family may have no choice but to begin guardianship and conservatorship proceedings.

By signing a power of attorney and/or placing assets into a trust now, you can determine who will be able to make financial and healthcare decisions for you in the future should you be unable to make them for yourself—and it costs relatively little to get the proper powers of attorney or trusts in place.  Guardianship and conservatorship proceedings, on the other hand, can be very time consuming, costly, and they take decision-making authority away from you.  A judge may appoint someone different than you would have appointed to make decisions for you.  As always, you should consult with a knowledgeable elder law attorney regarding the options that are best for you and your loved ones.

For additional information, please contact:
Hurley Elder Care Law
100 Galleria Pkwy Suite 650 Atlanta, GA 30339
Phone: 404.843.0121
Fax: 404.843.0129

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