Guardianships: Protecting People and Property
What happens when Mom or Dad are not able to handle their own affairs and did not previously sign a power of attorney to allow someone to act on his/her behalf? Who can talk to their doctors and make medical decisions, who can deal with bank accounts, investments and bills, who can make decisions as to where they will reside?
Hourigan, Kluger & Quinn Attorney Richard Bishop encourages all of the firm’s estate planning clients and elder law clients to have powers of attorneys signed while they are competent. However, we have seen many cases where there are no powers of attorney and someone loses their competency (often called “being incapacitated”).
Attorney Kevin Walsh from our office explains that “guardianships are an important legal tool available to protect the health and property of incapacitated adults in certain situations when a valid power of attorney was not previously executed.” Pennsylvania generally defines a guardian as a person appointed by the court to make decisions regarding the person of an adult and to administer the property or estate of an adult.
Adults are assumed to be capable of making their own decisions unless a court determines otherwise. If an adult becomes incapable of making responsible decisions, a guardian may be appointed by the court following a hearing. A guardian may have the following responsibilities, among others:
- determine and monitor residence
- consent to and monitor medical treatment
- consent and monitor non-medical services such as education and counseling
- make end-of-life decisions
GUARDIANS OF THE PERSON
Guardians can be given limited or plenary authority to manage an individual’s affairs.
A plenary guardian of the person has the authority to make all decisions necessary for the personal well-being of the individual. A limited guardian of the person has only those powers specifically set forth in the Court’s decree. If a person lacks some, but not all, capacity to make decisions, a limited guardianship would typically be granted.
There are certain powers that not even a plenary guardian of the person can exercise unless specifically authorized to do so by the court after a separate hearing. These include:
- consenting on behalf of the incapacitated person to certain medical procedures/treatments;
- prohibiting the marriage or consenting to the divorce of the incapacitated person; and
- consenting on behalf of the incapacitated person to any experimental medical procedure or participation in any biomedical or behavioral experiment.
There are other powers that a guardian of the person cannot exercise and cannot be authorized by any court to exercise. These include:
- consenting to the incapacitated person’s admission to an inpatient psychiatric facility or a state institution for persons with intellectual disabilities;
- consenting to the relinquishment of the incapacitated person’s parental rights;
- withholding or refusing to authorize the provision of life-preserving treatment for an incapacitated person who does not have an end-stage medical condition; and,
- forcing an incapacitated person to consent to an abortion except in an emergency situation.
GUARDIANS OF THE ESTATE
An “estate” consists of real and personal property, tangible and intangible, and includes anything that may be the subject of ownership. A guardian of the estate normally has the power to enter into contracts, oversee debts, invest and manage assets, and perform other financial duties.
Responsibilities of the guardian of the estate may include:
- obtaining appraisals of property
- protecting property and assets
- receiving income for the estate
- making appropriate disbursements
- securing court approval prior to selling any asset
- reporting to the court on estate status
DUTIES OF GUARDIANS
The duties of a guardian extend beyond specific tasks. A guardian of the person must assert the rights and best interests of the incapacitated person. Expressed wishes and preferences of the incapacitated person shall be respected to the greatest possible extent. A guardian of the estate must use the standard of care that a person of ordinary prudence would practice in the care of his own estate. The guardian must manage the estate exclusively for the benefit of the incapacitated person.
CREATING A GUARDIANSHIP
Pennsylvania’s guardianship procedures are the exclusive means by which a guardianship can be created. Only a court, after a legal proceeding, may judge an individual to be incapacitated and appoint a guardian for that person. The guardian need not be a person. The role can be filled by a corporate fiduciary, a non-profit corporation, or a county agency. If appropriate, the court shall give preference to a person suggested by the incapacitated person.
Attorney Joseph Kluger explains that “In Pennsylvania, a guardianship proceeding commences when an interested person files a petition in the Court of Common Pleas for the appointment of a guardian of a person or the person’s estate.” A hearing will then be held to determine if the respondent is incapacitated. Attorney Kevin Walsh adds that “In a guardianship proceeding, the petitioner must establish by clear and convincing evidence that the respondent is incapacitated. In making its determination whether the respondent is incapacitated, the court must consider, among other things, the nature of the respondent’s disability and the extent of his or her capacity to make or communicate decisions.”
Pennsylvania defines an incapacitated person as “An adult whose ability to receive and evaluate information effectively and communicate decisions in any way is impaired to such a significant extent that he is partially or totally unable to manage his financial resources or to meet essential requirements for his physical health and safety.” It should be noted that mental illness and developmental disabilities do not, in and of themselves, necessitate a declaration that a person is incapacitated.
A guardian for a minor can be appointed in a will, but a court order must be issued to effectuate the guardianship.
ALTERNATIVES TO GUARDIANSHIP
Since guardianships override certain rights of a ward, alternatives to guardianship should be considered whenever possible. Examples of those alternatives include:
- powers of attorney
- revocable trusts
- representative payees