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Guardianships, Conservatorships and their Alternatives -
© 2001 Jeffrey P. Buhrman
Each of us has been given much to care for: friends, family, money,
property, mind, soul and body. So long as we enjoy good health, our
burden is easy and often a pleasure. However, if we are ill, our lives
may become unmanageable. A few simple steps can create peace of mind.
Were you to become mentally incapacitated, a family member or friend may
have to go to Court to be appointed as your Guardian or Conservator, to
make decisions and take actions for you. If you die leaving a minor
child, a family member or friend may have to go to Court to be appointed
as the child’s Guardian or Conservator, until the child is eighteen. You
may have little say about who is appointed and the decisions that person
will make. Plus, a Court case consumes time, money and emotion. Often,
these problems could have been avoided.
Guardians - A Guardian is a person appointed by the Probate Court
to make decisions for an incapacitated individual known as the "Ward."
In any Guardianship, the Ward loses important rights. A Ward under full
Guardianship cannot choose where to live, whether to get medical
treatment, how to spend money, or whether to marry. The Guardian makes
those decisions for the Ward. When the Ward has little money or
property, the Guardian also may manage the Ward’s assets. Otherwise, a
Conservator must be appointed for that purpose.
Conservators - A Conservator is a person appointed by the Probate
Court to manage the money and property of an incapacitated person known
as a “Protected Person.” The Protected Person may lose control of even
the most basic financial tasks. A Conservator typically pays bills and
invests the Protected Person’s money, and has power to sell, mortgage,
rent or manage the Protected Person’s real estate.
Alternatives - There are several effective alternatives to a
Guardianship or Conservatorship. Each requires advance planning. The two
simplest steps are writing an Advance Health-Care Directive and a
Durable Financial Power of Attorney. Other possible actions include
establishing Joint Ownership, a Revocable Trust, a Minor’s Trust and
writing a Values History.
Advance Health-Care Directives - An Advance Health-Care Directive
is a document that empowers another person, called a health-care agent,
to make medical decisions for you when you are unable to make those
decisions for yourself. A Directive also may state your preferences
about “heroics,” in the event you suffer a terminal illness or permanent
coma. In a Directive you may make an organ donation and specify which
physician you would like consulted. You also may address other personal
decisions you want your health-care agent to make on your behalf.
Frequently, when a individual has a Directive, a Guardian is not
required, and the decisions that normally would fall to a Guardian are
made by the health-care agent instead. As this is not always true, a
Directive should identify the person you would choose as your Guardian,
and this choice will be considered by the Court.
Values History - Ideally, your agent will make the same
health-care decisions you would have made. To do this your agent must
know your preferences. A values history might state what it is in life
you value most, what gives you comfort, what gives your life meaning,
and under what circumstances is it appropriate to decline medical
treatment.
Durable Financial Powers of Attorney - A Durable Financial Power
of Attorney is a document empowering another person to manage your
finances when you are unable to do so yourself. A spouse cannot take
financial actions for the other spouse, simply by virtue of the
marriage.
When a person has a Durable Financial Power of Attorney, a
Conservatorship may not be required, and the decisions ordinarily
handled by a Conservator can be managed by the financial agent instead.
This is not always true; some financial institutions may demand a
Conservatorship. A Power of Attorney, therefore, ought to state who you
would want as your Conservator, and this statement usually is respected.
Joint Ownership - In some instances, Joint Ownership is a useful
alternative to a Conservatorship or a Durable Financial Power of
Attorney. For example, if mom and daughter are joint owners of mom’s
bank account, daughter can freely access the money in that account. It
doesn’t matter that mom might have made all of the deposits. Both owners
have full rights to the account.
But if mom and daughter jointly own a house, the situation is not as
simple. A house cannot be sold without the participation of all owners,
or their legal representatives.
Whether situation involves a bank account or real estate, matters can be
confusing when one joint owner dies. Often a jointly owned asset passes
to the surviving owner automatically. But sometimes this was not the
intent of the parties. Sometimes people create a joint account as a
convenience to enable one owner to manage the account for the benefit of
the other owner, and do not intend to pass full ownership.
Other problems arise, if a joint owner needs nursing home care. In these
circumstances, a joint bank account can hurt that person’s eligibility
for Medicaid coverage of nursing home costs.
Revocable Trusts - A Revocable Trust is a smart way to manage
assets when substantial values or out-of-state real property is
involved. Commonly, a Revocable Trust is an arrangement written and
funded by a “Grantor,” whereby a “Trustee” manages assets for the use
and benefit of the Grantor and other “Beneficiaries.”
A Revocable Trust is created and takes effect during the Grantor’s life
and usually remains under her control, until her incapacity or death.
Like a Durable Financial Power of Attorney, a Revocable Trust grants
financial powers to another person. Unlike a Power of Attorney, a
Revocable Trust gives the Trustee detailed instructions of what to do
and how to do it. Whereas, the typical Power of Attorney has no
instructions at all! Like a Will, a Trust can carry on and distribute
property after a person’s death. Unlike a Will, assets in Revocable
Trust are not subject to probate.
To the extent the Grantor transfers assets into a Revocable Trust by
gift or deed, the Trustee becomes the legal owner of those assets. The
Trustee, however, must manage those assets in accordance with the terms
of the Trust.
It is common for a person to establish a Revocable Trust, name himself
Trustee and prime Beneficiary, and retain the right to revoke the Trust
or change its terms. If the Grantor later is mentally incapacitated,
then typically the Trust will transfer control of the assets to a
Successor Trustee, to manage those assets for the benefit of the Grantor
and his family.
Minor’s Trust - Parents of a minor child are strongly advised to
write Wills containing a Trust for their child, in the event both
parents die before the child becomes an adult. It is also important that
all beneficiary designations be coordinated to move assets into the
Trust at the appropriate time. Otherwise, a Conservatorship will be
required, since financial institutions and life insurance companies will
not distribute assets to a minor. Through a Will parents can select a
person to manage their child’s inheritance, guide that Trustee’s use of
trust assets, and set conditions under which the child can access the
assets directly. A Trust can extend into the child’s adult life,
reducing the risk assets may be spent carelessly before the child
matures.DISCLAIMER: This web site is provided
for general information only. It is based on Maine law. The law may
apply differently to your specific situation. Readers should seek
competent legal counsel for solutions to their individual problems and
advice about their individual situation. This web site by itself does not
establish an attorney-client relationship, nor should anything in this
web site be considered legal advice.
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