In previous discussions of various aspects of planning for incapacity, we addressed the types of incapacity documents typically used, common mistakes made when planning for incapacity, and the level of capacity needed to execute different types of legal documents.
Today, we are going to address the available legal options when incapacity planning goes awry – guardianship and conservatorship. There is no one reason why incapacity plans fail. Sometimes the individual starts a plan but never actually signs the documents. Sometimes the planning documents only name one agent, and no one can replace that agent when she dies. Sometimes the individual begins to act erratically due to dementia. We have had more than one situation where a client with dementia has withdrawn large sums of money and forgotten where she put it. Sometimes, despite the powers of attorney, the individual falls victim to unscrupulous third parties and less-than-well-meaning family members. Sometimes, no matter how good the documents are, the individual needs court-ordered protection. In each of these circumstances, guardianship and conservatorship provide protection to the vulnerable individual.
1. What are Guardianship and Conservatorship? I often refer to guardianship and conservatorship (collectively, Guardianship) as the opposite of the 18th birthday. When you wake up the morning you turn 18, you have magic powers that you did not have the night before. In Guardianship, the courts remove these powers and essentially return that individual to the capacity of a minor. Unlike a birthday, the Guardianship process is anything but automatic.
Guardianship is appropriate when an individual (the Proposed Ward) lacks the ability to make or communicate significant responsible decisions about her health or safety (guardianship) or her financial affairs (conservatorship). This does not mean that the Proposed Ward has made a series of bad decisions; all adults have the right to make good and bad decisions, regardless of age. Rather, the Court focuses on the Proposed Ward’s ability to process information that she receives. Can the Proposed Ward understand and evaluate the facts as presented? Once she has the relevant information, can she weigh reasons for and against a certain decision? If she makes a decision, does she understand and appreciate the consequences of that decision? If the answer to one or more of these questions is no, then some form of Guardianship is probably appropriate.
Guardianship (formerly known as the guardian of the person) addresses the ability to make personal decisions. Here, the Court looks to “guard” the person. A person under guardianship loses the right to marry, to decide her residence or domicile, and to consent to medical procedures, among others.
Conservatorship (formerly known as the guardian of the property) addresses the ability to make financial decisions. Here, as the name suggests, the Court seeks to “conserve” the individual’s assets. A person under a conservatorship loses a wide variety of rights, for example, the right to make, modify or terminate contracts; to buy or sell the property; to bring or defend a lawsuit, or to conduct business transactions.
Guardianship and conservatorship are distinct processes, and a person who is appropriate for one process may not be appropriate for the other. Also, it is possible for an individual to have a limited guardianship or conservatorship, meaning that the Court has removed only certain individual rights. For example, recently, I helped a client obtain a limited guardianship over her mentally ill daughter. Her daughter lost her right to consent to medical procedures, to establish her residence, and to change her domicile. The daughter retained all other rights, including the right to marry, and she is not subject to a conservatorship.