What Is The Difference Between A Power Of Attorney And A Guardianship?
The main difference between power of attorney and guardianship is oversight and expenses.
A durable power of attorney creates a private relationship between you and the person you name as agent under your durable power of attorney. The agent under the power of attorney’s actions are not supervised by anybody or the courts unless somebody who is aggrieved, whether it’s you or other family members, files a lawsuit against that agent under power of attorney and then a court would get involved. When there is a close family relationship and a lot of trust then a durable financial power of attorney is more than sufficient to handle most people’s incapacity needs for financial management.
Compare the privacy of a durable power of attorney relationship to that of a court-supervised guardianship proceeding, and the guardianship proceeding requires an extremely high level of oversight with the court and all interested parties in the family about financial management. For any major transactions or selling of a property or entering into big contracts, then a notice to all family members and a court hearing will be required. At the end of each year under guardianship, every dime that the guardian spends must be accounted for in a written report to the guardianship court. The oversight level and “staying above board” in a guardianship proceeding is very, very strong that the money is going to be used for the right purposes for the person who is incapacitated. However, this oversight issue does create extreme levels of costs that will be borne on the incapacitated person.
What Is The Role Of A Trust In Incapacity Planning?
There are two main roles of a trust in incapacity planning. First, it could be for simple asset management and protection from poor financial decision-making or exploitation from others. Second, a trust can be used as a tool to protect assets from nursing home costs.
A trust and incapacity planning could be set up to say “when I am incapacitated then the signature authority over trust assets will now be in the hands of a new successor trustee who is my son or daughter,” whomever you choose. In that trust document, you can set forth the requirements and definitions for when incapacity occurs. Is it going to be if one or two doctors say that you’re incapacitated or is the incapacity determined by other family members? The incapacity under a trust is very useful if somebody is susceptible to writing checks when they’re incapacitated in spending excess money and making bad financial decisions. Upon the new successor trustee taking over after your incapacity, the signature authority is taken away and you won’t need court oversight to manage those finances unless other family members have complaints over the trust management. That’s a very important role for a trust to play to prevent you from signing away your assets unwittingly. The second role the trust can play in incapacity planning is to establish a preplanned irrevocable income-only trust, which the function is to beat the Medicaid five-year look-back period and to preserve the assets in that trust from being used on $8,000 to $10,000 per month nursing home bills. The irrevocable income-only trust is typically used to protect assets from the nursing home as a part of incapacity planning.
What Is A Living Will? Why Should I Have A Living Will?
A living will is written instructions to the person you have given a designation of health care surrogate. The living will contain specific instructions about when you want life-prolonging measures to be withdrawn upon your incapacity and inability to live without the assistance of machines such as feeding tube, breathing machine, hydration and so forth. You should have one of those mainly for peace of mind for your family member who is making medical decisions on your behalf. For example, I’ve had a client acting for his mother using her designation of health care surrogate be faced with making decision to remove life support from his mother under the terms of the living will. His siblings in discovery of his decision stated, “You plan on killing mom then”. This, of course, is not the case and the living will is a good tool for that son looking to carry out mom’s wishes to show that he is fulfilling mom’s intent and not doing something evil or egregious to mom.
Can I Make Changes To My Living Will?
Yes, you can always make changes to your living will. Most people start off with the basic version saying what happens if you can only live on machines and do you want those machines to be removed, say the dying process is not artificially prolonged. A living will can actually be more specific than that and you can also include wishes about how you’d want to be cared for in the event of incapacity inside of your living will and even have levels of amnesia about who is taking care of you and what you are eating and what people are doing to entertain you. Essentially a living will always be changed and updated to express your intent about how you want what your person named as health care surrogate can do for you if you’re incapacitated.
For more information on Power Of Attorney Vs. Guardianship, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.
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