Guardianship

When an adult becomes incapacitated, a family member, friend, or government agency can petition the court to appoint a guardian. Guardianship proceedings often take upwards of 6 months to complete and include a thorough due diligence process to understand which affairs the incapacitated adult (aka the ward) needs assistance with. Based on those findings, the court will then appoint a guardian and provide them with the authority to speak and act on the ward’s behalf in those areas where they need assistance.

 

Duties of a guardian for the elderly

A guardianship can be general or limited. As the name implies, a general guardianship offers the guardian complete control over the ward’s affairs, while a limited guardianship restricts the guardian’s authority to specific activities. General guardianships are the most common choice, but a limited guardianship is a great pick for an adult who is partially incapacitated and can still handle some of their own affairs.

Depending on the terms of the guardianship established by the court, a guardian may have a variety of responsibilities. Some of the most common duties of a guardian include:

  • Annual reporting – all guardians are required to submit an annual report to the court, sometimes referred to as an annual accounting. Depending on the case, the guardian may need to appear in court to account for their actions in person.
  • Care plan – the guardian should consult with the ward’s healthcare providers to establish a care plan suited to their unique situation. Who will administer their medication? How often are regular visits to the doctor’s office? Who will transport the ward to these regular appointments? Does the ward require in-home medical care?
  • Duty of care – the guardian is expected to prioritize the needs of the ward above their own.
  • End of life decisions – if the ward hasn’t issued an Advance Directive, the guardian can make end-of-life decisions on their behalf (e.g. approving life support or signing a do-not-resuscitate order)
  • Healthcare decisions – based on recommendations from the ward’s healthcare providers, the ward will make important decisions regarding medical treatment and services. To make the best decisions, the guardian will usually have full access to the ward’s medical history and private healthcare information.
  • Living situation – the guardian will need to decide where the ward will live and frequently monitor their residence.
  • Maximize the ward’s independence – all guardians are issued a broad mandate to maximize the ward’s independence in the least restrictive manner.
  • Non-medical services – many incapacitated adults have a care plan with important non-medical services, such as counseling or group therapy. The guardian must consent to and monitor these activities.
  • Recreation – a healthy social life can be an important part of long-term health and happiness. The guardian should ensure that the ward can participate in safe recreational activities and attend social events.
  • Releasing confidential information – if a situation arises where a third party requires access to the ward’s confidential information, the guardian can sign a HIPAA release form on behalf of the ward to release necessary information.
  • Transportation – if the guardian isn’t the primary method of transportation, he or she will need to ensure that the ward has transportation to and from essential daily activities.

 

Conservatorship

Guardianships and conservatorships are synonymous in many states, but there is an important distinction between the two in Arizona. In this state, a guardian has the authority to manage the ward’s living situation and healthcare, while a conservator has the authority to handle the ward’s finances.

It’s safe to say that most of the time the court will appoint a caretaker as both a guardian and a conservator, but it’s not unusual to see cases where the caretaker is only granted one form of authority. If a guardian is also a conservator, the guardian’s duties would be enlarged to include important financial duties such as:

  • Acting as a representative payee – a conservator can accept payments (debt agreements, income, interest distributions, etc.) on behalf of the ward.
  • Budgeting – a good conservator should set a strict budget to ensure that the ward’s assets are used wisely.
  • Investing assets – conservators have a fiduciary duty to prudently manage the ward’s assets. This includes investing assets according to the ward’s risk tolerance, growth expectations, and income needs
  • Keeping a detailed accounting – a conservator is required to submit an annual accounting to the court. This report will be much more in-depth than a guardian’s standard annual report and should include transactions and investment decisions.
  • Managing real estate – the conservator is in charge of any houses, land, condos, and valuable physical property (art, jewelry, collectibles, etc.).
  • Paying bills – this is perhaps the simplest and most basic duty of a conservator. The conservator is responsible for making sure all bills are paid in full and on time each month to avoid collections, foreclosures, and repossessions.
  • Selecting benefits – if the ward has a life insurance policy, annuity, pension, or retirement plan, the conservator can select and amend the associated benefits.

 

Alternatives to guardianship & conservatorship

While guardianships and conservatorships are important tools to provide for an incapacitated adult, they aren’t the only options. In fact, these should be considered the backup options. When possible, it’s far better for the ward to prepare for contingencies such as potential incapacitation in advance, rather than leaving the matter to family and friends to petition for guardianship.

The easiest alternative to a guardianship or conservatorship is a durable power of attorney. With a power of attorney, the principal can appoint an agent (the attorney-in-fact) to handle their affairs if they become disabled or incapacitated. As soon as the principal becomes incapacitated, the agent can immediately take control of their affairs without waiting for court approval. The agent will still have a duty of care to the principal, but they won’t be required to submit annual reports to the court.

A power of attorney is preferable to a guardianship or conservatorship in several ways. First, a power of attorney that’s voluntarily issued preserves the principal’s independence. In contrast, guardianships and conservatorships involve a judge taking away an adult’s freedom to make their own decisions. Second, drafting a power of attorney is significantly faster than going through guardianship proceedings, since you can often draft a simple power of attorney in a single sitting (versus months of guardianship proceedings). Finally, a power of attorney is significantly cheaper as there are no court costs or investigation fees.

The other alternative applies specifically to conservatorships. Rather than waiting for the court to appoint a conservator to handle their finances, an adult of sound mind can establish a trust for their own benefit. If the grantor is the beneficiary and the trustee is a third-party, then the trustee will automatically be able to administer the trust assets on the grantor’s behalf if he or she is incapacitated. Trusts are a bit more complicated and expensive than a simple power of attorney, but they offer additional estate planning benefits that make them worth the extra time and effort.

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