When an adult is incapacitated or otherwise unable to manage aspects of their affairs—be it financial, medical, or personal—it’s important to have someone with the authorization to assist them and act on their behalf. Spouses are inherently granted the necessary authorization to do this, but strict confidentiality rules in the banking and medical industries can make it difficult for other family members to step in. To remedy such situations, the courts will grant authority to act on another adult’s behalf in one of three ways:
- A durable power of attorney
Durable power of attorney
Any adult with a sound mind can freely grant someone the authority to speak and act on their behalf with a durable power of attorney. In this scenario, the individual granting the authority is known as the principal, and the individual receiving the authority is called the agent or attorney-in-fact.
A power of attorney can broadly authorize access to all of the principal’s financial, medical, and personal affairs, or it can restrict access to certain assets and situations. The agent may receive their authority the day the document is signed, or their authority can be contingent on the principal becoming incapacitated. A power of attorney does not take away the principal’s right to manage their own affairs—rather, it’s akin to adding an authorized user to a bank account or credit card. As long as the principal retains their mental capacity, they also have the right to rescind a power of attorney at will.
Where a power of attorney gets tricky is when the principal’s mental capacity is questionable. An adult who is not of sound mind cannot grant a power of attorney. If they do, a judge will likely invalidate the document. In situations where the principal is considered incapacitated by a physician or psychologist, you’ll need to apply for conservatorship or guardianship instead.
A conservator is appointed by a judge to take care of an incompetent adult’s financial needs (in this case, the incapacitated adult is called a ward). This role usually involves accessing bank accounts, managing investments, paying bills, collecting debts, filing taxes, and handling their general cash flow. The conservator has a fiduciary duty to manage the ward’s assets as well as any prudent investor would handle their own finances. That means the conservator is held accountable for ensuring the ward’s investments match their income needs, risk tolerance, and return requirements. Hiring a qualified financial advisor isn’t necessary, but is generally a good idea to ensure the conservator is prudently managing the ward’s assets.
While a conservator is restricted to only administering the ward’s finances, a guardian is responsible for assisting the ward with all aspects of their personal, medical, and financial affairs. In addition to the conservator’s standard responsibilities, a guardian is also authorized to consult with the ward’s healthcare professionals, make important medical decisions regarding treatment and procedures, and provide suitable living arrangements. Guardians are responsible for monitoring the ward’s general well-being to protect against elder abuse, financial fraud, mistreatment, and neglect.
Guardians and conservators are both required to report their activities back to the court annually. If a judge finds they have abused their powers, misused assets, or neglected to properly care for the ward, the court will revoke their authority and appoint someone in their place.
How to get a power of attorney
Getting a power of attorney is pretty simple. As long as the adult in question is of sound mind, a lawyer can draft a power of attorney in less than an hour. A do-it-yourself power of attorney is legal and perfectly accessible in many cases, but as with most legal matters, it’s always best to involve a professional who can make sure you’re doing it right. Any mistakes or discrepancies with a power of attorney will result in a judge invalidating the document, and if the principal is no longer of sound mind at that point, the court will be forced to appoint a guardian or conservator.
In the state of Arizona, the principal and a witness need to sign the legal document in the presence of a notary public. The notary will attest to the authenticity of the signatures, and the witness will attest that the principal is mentally competent, is not under duress, and is not drafting the document under undue influence.
How to become appointed as a guardian or conservator
If the adult in question does not possess a sound mind, the family member who wants to be appointed guardian or conservator will need to submit a petition to the court. Once accepted, the court will schedule a hearing, and the petitioner will need to serve notice to the adult, family members, and applicable agencies. At the hearing, the prospective guardian/conservator will have two important responsibilities: to prove that the ward is mentally incompetent, and to demonstrate that they are the best qualified candidate to assist the ward in their affairs.
To prove that the ward is incapacitated, the court will need to see certification from a physician or psychologist. Keep in mind that the judge doesn’t just need to determine whether or not the ward is competent—they’ll need to understand the extent of the ward’s incapacity. A ward who is completely incapacitated will probably need a guardian with full authority over their affairs, while a ward who is financially incompetent but still cognizant of their health may only require a conservatorship for assistance with their finances.
Once the court has determined the ward is in need of assistance, it’s your job to prove that you’re the best candidate for the job. Judges will like to see a good care plan already in place, and a positive history between you and the ward. It speaks volumes to your capacity and trustworthiness if you have already been successfully assisting the ward for some time. At the same time, the judge will also keep an eye out for red flags that may indicate a conflict of interest. Matters that could affect your candidacy may include a recent bankruptcy, court judgement, criminal record, accusations of elder abuse, or a history of misusing the ward’s assets.