Having little or no control of one’s estate and care can leave you feeling helpless—especially when an accident or decline in health forces an outside agent to take control through a guardianship. Avoiding a guardianship situation takes some foresight. However, planning for the unexpected can leave both you and your family peace of mind for the future.
What Is a Guardianship?
The National Guardianship Association defines a guardianship (also known as a conservatorship) as a legal process in which a person who is incapacitated and unable to make sound decisions is appointed a guardian, stripping the ward’s rights and ability to make decisions for himself or herself. A guardian may be a petitioning family member, corporation, or association—anyone the court sees fit to manage the situation. The guardian then assumes control of such decisions as medical treatments, consent for end-of-life care, and controlling income and/or property.
A guardianship may come in several forms: guardianship of the person, managing day-to-day and medical decisions; guardianship of the estate for financial issues; a limited guardianship, which confines the powers of the guardian to a certain area (such as managing medical care but not day-to-day); or a combination. In all cases, the guardian is required to report back to the court on his or her area of guardianship. While this provides some oversight to the process, it still means the ward’s rights are in control of someone else.
5 Steps to Take in Order to Avoid Guardianships
1. Title Your Assets Jointly
Retitling assets is the easiest and least dramatic step in avoiding guardianship. By choosing a person who can access and manage financial assets, individuals can pick a sort of guardian they trust. This action may include actions like assigning a joint owner for a piece of property so that they may access the mortgage papers and maintain residency.
However, About Money cautions that though the joint title owner on a property will have access to the asset, they will not be able to sell it without consent from both parties. Having a joint asset may also run the risk of putting your co-owner in jeopardy of losing the asset(s) in a lawsuit or having to pay hefty taxes if it is deemed a gift.
2. Assign a General Power of Attorney
General power of attorney enables two people, an agent and a successor agent, to make both legal and financial decisions upon your behalf if and when a doctor declares you as no longer mentally fit. Such decisions may include selling a property, overseeing bank transactions, or purchasing life insurance.
For many, the concern is that the power of attorney will be enacted while the person is still capable of making decisions. In this case, ppringing power of attorney, which spells out specifically when power of attorney may go into effect, is a viable option.
3. Set Up a Health Care Power of Attorney
Sometimes, end-of-life health decisions, such as whether or not to undergo a risky surgery, arise. In these cases, a Living Will can be effective to allow a specified person to determine how to proceed. However, as CNN Money explains, a Living Will isn’t always sufficient—it might not go into an effect until a person’s incapacity reaches a certain extent
Instead, consider giving an agent healthcare power of attorney, which exists both for making end-of-life and long-term care decisions (such as moving to an assisted living community). Ultimately, this increases the chances of your medical wishes being heard.
4. Fund a Revocable Living Trust
A living trust is a legal document that assigns a trustee to manage a person’s assets while he or she is still living. In the case of a trustmaker becoming incapacitated, a disability trustee is put into place to manage every asset of the person’s finances. However, this is only possible if the trustmaker funded the living trust prior to becoming disabled.
Wealth Protection Attorney Steven Gibbs explains that the process is as simple as renaming an asset to reflect the nature of the account, such as the Smith Living Family Trust. For accounts with tax implications, such as a 401(k), the asset is redirected toward the trust through beneficiary designations.
Planning for the Uncertain Future
With so many aspects of your estate and assets at stake when you are no longer able to manage it yourself, there is a great need to plan ahead. By taking necessary steps to avoiding guardianships, you can rest assured that your best interests are upheld no matter the circumstance.
For much greater detail on this topic, please reach out to us. We’re happy to provide additional information.
