In the course of assisting our clients with estate planning, we routinely have them sign durable general powers of attorney and durable powers of attorney for health care. The purpose of these documents is to designate an agent who can act on behalf of the client in the event that the client becomes incapacitated. In most cases, having these powers of attorney in place prior to incapacity eliminates the need for a guardianship proceeding.
Despite the prevalence of powers of attorney, guardianships are a surprisingly common occurrence. Just as there are two types of powers of attorney, there are two types of guardianships: guardianship of the person, which governs the health care and living arrangements of the proposed ward and guardianship of the estate, which applies to the proposed ward's assets.
In some cases a guardianship proceeding is needed because, even though a client has signed a power of attorney, there is some particular circumstance that requires the appointment of a guardian. If a client needs certain medical treatment, such as electroshock therapy, a guardianship and court order is required. Another example is when the health care power of attorney does not include agreement to the following statement: "If I object to treatment, treatment may be given to me against my objection." Most of the time, when a person is incapacitated and an agent is acting on behalf of the individual, it is because the person is unconscious or unable to communicate. In some instances, however, the individual is awake and can talk, but the person's physician concludes that the individual does not have the capacity to make his or her own health care decisions. If the physician recommends treatment and the incapacitated individual objects, the physician cannot proceed over the incapacitated individual's objection, unless the individual has indicated that it is acceptable that treatment be given against his or her objection. At that point, a guardian must be appointed to act on behalf of the incapacitated individual. Guardianships, however, most often occur when incapacitated individuals do not have powers of attorney in place.
The parties to a guardianship proceeding include, at a minimum, (1) the person who is seeking to be appointed by the court as the guardian, (2) the proposed ward over whom guardianship is sought and (3) an attorney who represents the proposed ward. The spouse, parents, adult siblings and adult children of the proposed ward must be sent copies of the court filings and thereby notified of the proceeding. In most of the guardianship cases that we see, many more parties are involved. There can be competing individuals who each want to be named as guardian. Attorneys may be involved who represent adult children, siblings or spouses, who want to object to the appointment of a guardian or to the appointment of the individual who has asked to be named as guardian.
The first step in a guardianship proceeding is for someone to file a petition for guardianship. The petition must allege specific recent acts by the proposed ward that suggest that the proposed ward is unable to care for himself or herself and in need of a guardian. Before appointing a guardian, the court must find that guardianship is necessary in order to protect the proposed ward. The court must also determine that the guardianship is the least restrictive alternative. There is always a court hearing before a guardian is appointed, although it is not unusual for the proposed ward to be excused from attending the hearing, if his or her physician signs an affidavit indicating that he or she would suffer harm if required to attend or that he or she would not understand the proceedings.
If the court determines that a guardianship is appropriate and it names a guardian, that guardian must file regular reports and accounts with the court. The guardian of the person must file a report and advise the court of the status of the ward's medical condition and living arrangements. The guardian of the estate must file an inventory of the ward's assets and must account to the court annually for all of the receipts and distributions that occur with respect to the ward's assets.
Recently, the New Hampshire Supreme Court ruled that the only legal fees that should be paid out of the ward's assets are the legal fees of the attorney for the proposed ward. Historically, attorneys acting on behalf of a person petitioning to be appointed as guardian advised the proposed guardian that once he or she was appointed by the court as guardian, then the guardian could use the ward's assets to pay the guardian's attorneys' fees. The court's appointment of the guardian was considered as evidence that the guardianship was necessary and in the ward's best interests and therefore payment of the guardian's legal fees was a legitimate expense of the proposed ward. Now that the New Hampshire Supreme Court has indicated that it is not appropriate for a guardian to use the ward's assets to pay the guardian's attorneys' fees, there is concern that individuals will not come forward to establish a guardianship when it is necessary. Those individuals would have to use their own resources to pay for their attorneys or proceed without counsel.
After reading this article, you can imagine how labor-intensive, and costly, a guardianship proceeding can be. We encourage all of our clients to sign powers of attorney and update them periodically in order to minimize the risk that a guardianship will be required. In situations where a guardianship is nevertheless necessary, we are willing and able to help.