March 2002 "Guardianships"

PLANNING FOR WEALTH AND SECURITY

By Elder Lawyers Jennifer and Jeff Hawkins.

Few people, if any, would choose to spend their final years in any state of incapacity. Unfortunately, medicine has not yet presented complete solutions to some of the major sources of incapacity such as strokes, Parkinson’s disease, and Alzheimer’s disease.

Guardianships
Incapacity that prevents a person from making or communicating decisions can create legal and financial crises. A person is incapacitated under Indiana law if the person is “unable: (A) to manage in whole or in part the individual’s property; (B) to provide self-care; or (C) both; because of insanity, mental illness, mental deficiency, physical illness, infirmity, habitual drunkenness, excessive use of drugs, incarceration, confinement, detention, duress, fraud, undue influence of others on the individual, or any other incapacity . . . or . . . has a developmental disability (as defined in Indiana Code §12-7-2-61.)” Incapacitated people often need help making important personal and legal decisions. Without advance planning, the person’s family may need to petition the local probate court for the appointment of a guardian over the incapacitated person.

A guardian is a person or a bank appointed by a judge to make decisions for an incapacitated person. A guardian must become bonded and account for the incapacitated person’s assets and income. The guardian must keep careful records of the person’s money and ask permission from the judge before buying or selling land or personal property for the incapacitated person. The Judge limits the guardian’s conduct very strictly.

A guardianship can cause an incapacitated person’s family considerable financial and emotional hardship. The cost of establishing a guardianship can costs several hundreds or thousands of dollars. Also, the guardianship rules robe families of privacy and require them to deal with their incapacitated members in the bright light of a courtroom. Although some cases require guardianships to provide adequate care and supervision of incapacitated people, most people should plan in advance to avoid the financial, emotional and time expenditures that guardianships require.

Power of Attorney: an Ounce of Prevention

A power of attorney is a person’s voluntary sharing of authority over her affairs with one or more other people. A person receiving a power of attorney is called an “attorney-in-fact.” Indiana law has permitted Hoosiers to make “durable” powers of attorney since 1976, enabling an attorney-in-fact to serve even after the giver of the power has become incapacitated. The current version of the Indiana Power of Attorney Act allows an attorney-in-fact to help the giver of the power of attorney deal with matters such as: land, tangible personal property, investments, banking, business operations, insurance, gifts, lawsuits, and healthcare consent or refusal.

A person must have be able to understand the what he is doing to create a power of attorney. A person cannot give a power of attorney of he is too incapacitated to communicate or understand the powers and responsibilities of an attorney-in-fact. Therefore, a person should make a power of attorney while he is competent. Procrastination often causes tragic consequences.

THIS ARTICLE IS NOT LEGAL ADVICE. CONSULT AN ATTORNEY DIRECTLY BEFORE RELYING UPON THIS ARTICLE OR CHANGING AN ESTATE PLAN.