Ep 36 Maintaining Autonomy in Dementia: Navigating Guardianships and Powers of Attorney

Discover the keys to safeguarding autonomy in the face of dementia and the intricate legal decisions that follow. As your Elder Law Coach, I, Todd Whatley, guide you through the murky waters of guardianships and powers of attorney, revealing how a dementia diagnosis impacts legal capacity and the crucial steps to maintain control over personal affairs. This episode unravels the ethical imperatives entwined with preserving one's independence, addressing the invasive nature of guardianships—complete with court interventions and potential loss of rights—and contrasting them with the empowering capacity of powers of attorney.

Embrace the proactive approach as we dissect the legal strategies that ensure immediate effectiveness and autonomy, circumventing the public scrutiny and emotional strain that come with guardianship proceedings. We scrutinize how guardianships can hamper Medicaid planning and the ramifications of state laws like those in Arkansas, all while weighing the risks of appointed guardians and the abuse of powers of attorney. With insights into specific situations where guardianship may be the reluctant yet necessary choice, even in the presence of a power of attorney, this episode is a treasure trove for anyone navigating elder law's complexities.

Check out our new website www.TheElderLawCoach.com.

Transcript

Speaker 1: 0:19

Thank you. Specialized experience, Whether you're an established attorney looking to refine your expertise or an emerging lawyer seeking a successful foray into elder law, this is your masterclass. Now let's get started with the luminary in the field. Here's Todd Whatley.

Speaker 2: 0:37

That's right. This is the Elder Law Coach Podcast and my name is Todd Whatley and, as always, I am super happy that you have joined us. And I just want to say real quick if you have suggestions, I am very much open to suggestions. We are now getting upwards of. I've stopped counting at 28. I've stopped doing episodes at 28, so we're 29, 30, 31, 32, 33. So we've done 33 episodes and I'm not running out of stuff. I could do lots of episodes, but I want to do what you want, and so if you have questions or if you have topics that you would like for me to do, please email me, todd, at TheOterLawCoachcom, and I would love to take your suggestions about future topics.

Speaker 2: 1:30

Today I want to talk about one of the things that is my soapbox and that is guardianships versus power of attorney. A lot of this is going to relate back to working with a client with diminished capacity, and that is episode 16. I would encourage you. If you have not listened to that episode, I would suggest you go back and listen to that one, and it will explain a lot of things about my take on. Can a person sign a power of attorney or should we do a guardianship and just a real, very quick summary is just because someone has large misconception in the legal community is that if you have dementia, you can't sign documents anymore, and that does not follow our ethical rules, and I explain that in detail in episode 16, so I would encourage you to go back and listen to it. So I'm going to make sure we understand the differences between the two so that I can effectively make my point.

Speaker 2: 3:11

So a guardianship is when a person has become incapacitated and typically they have not done any estate planning documents, so therefore they do not have power of attorney. They do not have anything saying. This person can do things for me and they have now become incapacitated, so therefore we have to basically sue them. We open up a court case against the person that is incapacitated, present the evidence to a judge that this person is incapacitated and that they can no longer make decisions by themselves, and we need the court to intervene. Name a guardian for the ward, okay, and the thing is, this is just what you ought to do in the medical field and I come from the medical field. I was a fiscal therapist for quite a few years before I became an attorney, and I can tell you if someone is difficult to deal with, if they have a permanent disability of the mind, then it's like, oh, we just go get a guardianship, that'll make everything easier.

Speaker 2: 4:21

And the medical establishment loves to deal with a guardian. They know that they're being supervised by a judge and there's typically no funny business and it just makes their life easier if they can say, oh, this person's the guardian and they can basically ignore the patient and just talk to the guardian and the guardian is the one to make decisions. It is more work when there is a power of attorney in place and they just they see it from their convenience and say go get a guardianship. And please understand, a guardianship is taking the rights away from a person and giving it to someone else, and a judge does that. Once the person goes through the guardianship, they are now a ward and they do not have the ability, typically with a full guardianship, to make any decisions whatsoever. Okay, so we've taken this person's autonomy away from them and we as attorneys are supposed to look out for the autonomy of our clients, the freedoms of our clients. We don't want the rights taken away from our clients. But with an older person with a diagnosis of dementia, it's just like yep, that's just what we're going to do and that is not what we as attorneys are supposed to do, and particularly as elder law attorneys. We are to protect the rights of our clients, and you do that best by having your client do a power of attorney.

Speaker 2: 5:56

Ok, again, go back to episode 16 to see when this can occur. But I'm just saying the power of attorney is a very simple and inexpensive, particularly when you compare it to a guardianship document that the person signs in your office. They decide who's going to be the guardian. They still have all of their rights, they are still able to make decisions, but they have someone out there that can help them. And I prefer an immediately effective power of attorney so that the agent can jump in and do what needs to be done very quickly without having to jump through any hoops. I'm not a fan of springing powers of attorney because you have to jump through some hoops before the person can function as the agent, and sometimes those hoops can't be done outside of court, and so we end up in court, which is the whole purpose of doing the power of attorney is to avoid court, ok, so power of attorney gives someone else the authority to help the person make decisions.

Speaker 2: 7:04

But the key point is the principal, the person who created the power of attorney, still has their rights, is still able to do things, and they don't lose any of their rights. So circumstances that would lead up to a guardianship is the loss of capacity, either sudden with a stroke, head injury, car wreck, some medical procedure. If their heart stopped and it took more than just a few minutes to get them back, they would have some brain damage, and so something like that occurs and that person quickly becomes incapacitated. But typically what we as elder law attorneys see is someone develops dementia and that is a slowly progressing, ongoing decline of their mental faculties. That is not so clear cut. It's like, okay, today they have capacity, tomorrow they don't could. It's like okay, today they have capacity, tomorrow they don't. And doing this while the person still has capacity allows us to jump in and do what needs to be done at any point past them, particularly if you do an immediately effective power of attorney.

Speaker 2: 8:21

And so under a power of attorney, the, the agent, is to make decisions that are in the principal's best interest. That's the fiduciary duty. The agent has a fiduciary duty to the principal, as does the guardian has a fiduciary duty to the ward. But the difference there is the guardian has to answer to the judge. And I think this is one thing that most medical people don't understand is when they recommend a guardianship. It's so convenient for them but it's hugely inconvenient for the family, because a guardianship is a lifetime commitment with the court unless the person regains capacity, which is very rare, particularly as an elder law attorney and so you have a lifetime commitment with this court Every year. I think most states require an annual evaluation or update to the court of this person, both financially and medically, and most people want an attorney to help them file that. And so every year you have to go back to the court and you do this until the person passes away. And people don't think about that up front. It's like, oh, just go get a guardianship, it'll be easy. Well, it is easy at first once you get through the process, but then the family has to deal with this for the rest of the ward's life.

Speaker 2: 9:52

Ok, technically, a guardianship is to be crafted specifically for the needs of the ward. I have seen typically most attorneys they just file a general guardianship to say we're going to take care of everything. They don't go through and craft it specifically on the needs of the ward, because that takes time, that takes effort, that takes testimony from experts and it's just easier to just do a complete sweep, which means the ward has no rights after the guardianship is done. You can do that with a power of attorney. Now, I'm a huge fan of very comprehensive powers of attorney that allow the agent to do whatever needs to be done because of Medicaid planning, scam prevention, things like that. That allow the agent to go in and close bank accounts, gift money, do whatever needs to be done to protect the principal at that point, with the understanding that those actions have to be in the best interest for the ward.

Speaker 2: 11:08

Let's talk about cost. The cost between doing a guardianship and a power of attorney is tremendous. Whatever you charge for a power of attorney, which is probably somewhere between $200 and $1,000, I don't know what you charge, but as an elder law attorney, if you were doing one that is very comprehensive and allows us to protect the entire estate once someone needs nursing home care, you should charge a fairly substantial sum for that, and I do a package of documents financial power of attorney, health care power of attorney, living will and a HIPAA release and I charge one flat fee for those and it's pushing $1,000. I don't get pushback because how I'm presented as this will allow us to protect your entire estate once you need nursing home care, or it will allow us to protect as much as possible, and without the powers in this power of attorney, we can't do that and you would lose everything. So it's well worth the fee that I am charging them, which is probably higher than most people With a guardianship. I think most attorneys require some upfront fee, which is more than a thousand and sometimes a few thousand, and then typically based on an hourly rate if things go bad and you have to spend more time in court fighting or doing whatever, and so it is very common for guardianships to be many thousands of dollars. And again there's that annual fee to submit things to the judge and get things back out there and an attorney charges for that. Okay, so those are some of the biggest differences and it's just. It's interesting how that happens. And then some of the practical issues between a guardianship and a power of attorney is many times people come to us and say mom's in the nursing home, we're spending $8,000, $12,000 per month. Can we protect her money. It's like, yes, if we have the power to do that and if they have not done a power of attorney and we need a guardianship.

Speaker 2: 13:31

Some states do not allow Medicaid planning under a guardianship, particularly in Arkansas. The guardianship statute says the assets of the ward shall be used for the ward and judges have read that as being. We can't give it away. If it's to be used for the ward, we have to use it for the ward. So therefore you cannot do Medicaid planning in those situations. We've had some success, but it's very spotty and it's not a given. And so see, if your state allows that, if the judges are willing to let you do Medicaid planning. But even if they do, to get the guardianship in place and be able to come up with a plan and do this, you have to wait on court schedules and hearings and different things and you can easily go one, two, three months trying to get the processes in order to do Medicaid planning under the guardianship, whereas with a power of attorney you can probably draft that in a day, go get the person's signature that day, or quickly, or, if they've already done power of attorney, you can start Medicaid planning immediately and many times do it within 30 days, so that the family pays for a month's worth of nursing home care as opposed to three or four months, and that's saving, you know, $10,000, $12,000 per month that you're able to do that. And so again, there's just no comparison between a guardianship and a power of attorney and why the power of attorney just makes sense.

Speaker 2: 15:19

And also, I don't want you to discount the emotional involvement here is, you know, with the family having to go through a guardianship, versus the process of a power of attorney. Guardianships can be very humiliating. You have to present evidence in court that this person is incapacitated and sometimes this person's doing really bad things, you know, stripping naked and running out the door or going to the bathroom in the front yard and sexually assaulting other people. It can be a very bad process of presenting all of this in open court for this person who used to be a pillar of the community and people think great things of them, and now you're saying all these bad things. That's emotionally devastating to the client, to the ward and to the family, and with a power of attorney, we don't have to get into that just here. Do you know who these people are? Do you know who you want to make financial decisions decisions for you? If so, put it in this form, sign it, notarize it. It's done. No emotional issues there. Just sign it and the family probably knows who's going to be the best person to be the agent.

Speaker 2: 16:46

And in court, the judge chooses someone. I say they generally do a good job, but there could be that situation where the judge picked the wrong person and then trying to change that is a huge hassle. So please understand that guardianship is not the preferred thing to do and it should only be done as a very last resort, when things need to be done and there is no legal document in place that allows us to do it. Okay and just, please, don't file guardianship just because it just seems to make sense. I've seen cases where there is a power of attorney in place. Short of, the agent under the power of attorney needs to be kicked out and someone else needs to be put in. I mean, I can understand that is one of those reasons that a guardianship would be needed, but short of that, it's so much easier to change your mind to do things under the power of attorney. Now let me end this episode with a quick. You know why would you absolutely need a guardianship, even if there is a power of attorney in place.

Speaker 2: 18:01

And I see two situations where that comes up when I will refer someone out for a guardianship, even though I've done a power of attorney for them. Number one is if there were what I call serial agents, meaning that mom is very easily influenced, or dad, mom or dad the principal is very easily influenced by someone else to change the power of attorney to appoint them. And so you'll typically see this with three kids, two or three kids, and the kids don't get along and the kids have different agendas. Sometimes one of them is really not that good of a kid, needs money and has been living off of mom. When the other child, who is trustworthy and does a good job, gets to be appointed power of attorney, say I'll be that attorney. Mom comes to me and says hey, this one child is stealing money from me and I need to appoint this person as power of attorney so they can help me. Okay, great, that's a good reason. Well, we do that power of attorney.

Speaker 2: 19:11

Well, the kid who was stealing finds out and says mom, I want to lose my job, I want to get kicked out of my house, whatever, I need to be your power, do that power of attorney. Well, the kid who was stealing finds out and says mom, I'm going to lose my job, I'm going to get kicked out of my house. Whatever, I need to be your power of attorney. I'm the one here with you all the time yeah, because they're not working. But I'm the one here with you, I'm the one who cares for you.

Speaker 2: 19:29

My sister's not a good agent. She's not going to take care of you like I am. Let's go to the lawyer and have the lawyer name me as your agent. Mom's like okay, and so she goes to a second lawyer and that attorney, with the information that they have, appoints the you know, let's say the son, as the agent. Well then everybody finds out oh my God, mom's appointed this child, the one who steals from her, as the agent. Well then everybody finds out oh my God, mom's appointed this child, the one who steals from her, as the agent. And then it changes back, and then it's just back and forth and back and forth. And when mom is so easily persuaded to change that?

Speaker 2: 20:07

That's the one downside to a power of attorney is it can be changed as long as the person has capacity and if there are attorneys, or even if they download a power of attorney off the internet and have mom sign it, theoretically that trumps the previous power of attorney, and so it's just a problem. The way we solve that is to open up a guardianship and let a judge figure it out. Ok, so once a judge decides who's going to do it, that doesn't get changed so easily. So that's one situation where I see, even with a power of attorney in place, that we need a guardianship. The other one is if the principal I'm where they need to stay or go where they need to go the agent under power of attorney can't physically make this person stay somewhere or go somewhere. A principal still has freedoms. Ok, the a principal still has freedoms. They still can go and do as they want to do, and you can't restrain them or kidnap them at this point. And so, therefore, if that person simply will not go where they should go or stay where they should stay, then a guardianship may be needed.

Speaker 2: 21:35

Okay, now just a quick practice pointer If this person has a power of attorney that I've done for them and they refuse to go or refuse to stay, I'll tell the family hey, call me, let me go talk to them and, very briefly, I'll tell you how I handle that is. I will go to them and say look, ms Jones, I understand that you want to leave the nursing home. Yep, I'm leaving, I want to go home. There's nothing wrong with me, I can go home. Well, your family and the doctors say differently, you really should stay here. Well, they don't know what they're talking about. I'm going home. I'm like okay, ms Jones, you really should stay here. And so that's phase one. It's like well, the doctor and your family says otherwise, and sometimes that works, but rarely. Step two is when she says nope, I'm fine, I'm going home. You're like okay.

Speaker 2: 22:29

In my mind, step two is hey, if you go home and you get hurt, your daughter is your agent under the power of attorney, and if someone decides she let you do that and she let you get hurt, they could go after her, which is not likely, it's actually very unlikely, but it could be possible. You're not lying to your clients, you're just kind of exaggerating things a little bit, but it could be possible. You're not lying to your clients, you're just kind of exaggerating things a little bit, but it could happen. It's like look, you don't want them going after your daughter if you go home and get hurt. Sometimes that'll work, most times it won't. She's like I'm not going to fall, I'll be fine, don't worry about it, I'm going home. I'm like okay, ms Jones.

Speaker 2: 23:11

The last and final stage is Ms Jones, you're really not going home. Oh yeah, I am. No, you're not, because if you continue to decide that you're going home, your doctor says you shouldn't, your family says you shouldn't. It is well documented that you should not go home. You're going to force me to put on a suit and file some paperwork at the court and I can talk to the judge this afternoon, if I need to, and convince them that you do not need to go home, and a judge, at least temporarily, will say you can't go home, okay, and you won't go home. Okay, home, okay. It'll take two or three days to fight this out in court, but with testimony from your doctor, testimony from your family, everything that everyone knows, a judge is going to decide you can't go home and so, ms Jones, you're not going home.

Speaker 2: 24:06

We can do it, we can do it easy. You can make me put on a suit and go to court and do all that stuff, but don't make me do that, just stay here. Okay, this is what you need to do. But if you force us, I'll go to court and I'll make you stay here. And so Ms Jones is like so I'm not going home. No, you're not. She's like okay, and they'll stay okay.

Speaker 2: 24:33

Now, what lawyer would do that? What lawyer would say oh, she's wanting to leave home, let's file a guardianship, you'll make more money. But is it in the client's best interest? And it's not. If you can convince them to stay because they're really not going home, I think you owe it to your client to tell them that to say home, I think you owe it to your client to tell them that to say you're not going home, don't make me put on a suit, don't make me do all this stuff. You're not going home. And I think we owe it to our clients that's in their best interest to not waste money on that. But I've seen it so many times where like, okay, she won't stay, so let's just file a guardianship and that'll make them stay.

Speaker 2: 25:13

Again, lifelong commitment, not in the client's best interest, don't do that. Go, spend a little bit of time, charge the family for that. I mean you just save them a ton of time. I normally don't charge because they're my client and I think this is in their best interest and I'll go do that. But if you feel like you need to be paid for that, sure, I think that's a very billable service that you can bill the family to pay you to go convince them not to do a guardianship, and so I've probably done that five or six times over my career and it worked in all but one situation, so I would encourage you to do that.

Speaker 2: 25:52

All right, hopefully I have convinced you emotionally and legally not to do guardianships unless it is just absolutely necessary, but please understand what it is and how it involves your client and it is truly in your client's best interest to not go through a guardianship and I think it's your job to help prevent that. All right, thank you so much for listening and, as always, please subscribe and if you would like to do coaching, I would love to talk to you. Give us a call to check out our brand new website. We've updated it, got some cool things on there, and I would love to be your coach and give us a call and I will help you become a very proficient elder law attorney. All right, we will see you next time.

Speaker 1: 26:47

Thank you for joining this episode of the Elder Law Coach Podcast. For those eager to take their elder law practice to new heights and are interested in Todd's acclaimed coaching program, visit wwwtheelderlawcoachcom. With Todd Whatley by your side, the journey to becoming an elder law authority has never been more achievable. Until next time, keep learning, keep growing and stay passionate about elder law.