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Do you need guardianship on top of POA?

Toledo, OH |

My uncle and brother have POA of dad, I am taking care of him. Uncle doesnt seem to know much about law and is scare. Now wants to pay lawyer 3 grand and my understanding an annual fee to get guardianship. POA was signed before dementia set in. Wants each of us to have guard. his brother and son for money and me for medical. There is alot of money invloved but it seems like everything is fine the way it is. Lawyer saying dad can still "gift" money to non family,or have people move in with him, but then uncle says he cannot gift family money, I dont get it. He either has "free will" or he doesnt, right? What would guard. do that POA cant?

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Attorney answers 6

Posted

Q: He either has "free will" or he doesnt, right?
A: In Michigan there's actually a different competency standard if you're talking about health care and wills vs trusts or contracts.
Q: What would guard. do that POA cant?
A: Not much, and it would be a very very long time before I would voluntarily go to probate court when I already had a perfectly fine PoA..
Recommend consult with an elder law attorney re: Medicaid consequences of these "gifts" and general advisability of avoiding probate.

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Posted

Generally, the purpose of a POA is to eliminate the need for a Guardianship. Unless and until a third party refuses to honor the POA there is no need to incur tge expense and time to open a Guardianship.

The gifting issue is wholly dependent upon the language in the POA. It will have language permitting it or it won't. Virtually no Court will permit a Guardian to make gifts.

I have assumed that there also is a slid Health Care POA in place.

Asker

Posted

Thank you. Lawyer was saying get guard. because he can still give gifts to wrong people. If POA is in place and med. records say he has Alz. can he"give away" his stuff? isnt that where POA would step in? Thank you. Are you near Toledo?

Justin Jay Watling

Justin Jay Watling

Posted

Agent should take steps to protect assets from Dad's imprudence, especially in an Alzheimer's situation. I am in Cleveland area. Justin J Watling

Asker

Posted

Mr. Watling, Thank you. you have been most helpful. 1 more question if I might: Most of money is in bonds. I read if G. was appointed: no "gifts". Can POA "gift"? Uncle saying he is being watched by "People" and something about elder abuse laws. and he can not gift to grandchildren. Bonds are in fathers name with POD to grandkids (girls) both have just had babies I would like to have uncle "gift" mature bonds for Xmas. Uncle says POD means POD, I take it as POD until bonds are mature, they are. Father just has refused to cash in because of taxes. Thoughts?? and thank you again.

Justin Jay Watling

Justin Jay Watling

Posted

POA can gift only if the Power of Attorney document allows it. So, the document must be reviewed. POD means pay on death and your Uncle is correct. The bnds go to the designated beneficiary only upon Dad's passing. The maturity date does not affect that at all. The tax issue is a bit complex. If Dad is in a skilled care facility or otherwise has substantial medical expenses, it may be wise to cash in (redeem) some of the bonds since the medical expense may offset the income resulting in an essentially tax-free redemption. Calculations need to be done to make a final determination on this issue. Also, there is maturity and final maturity. Maturity means the bods have reached face value. Final maturity means the bonds have stopped earning interest.

Asker

Posted

Do maturity differences make a difference? most bonds currently at final maturity. Maybe not you forte, but arent bond returns at a all time low? Is there any other tool(s) just as safe? Any return at this point is better than Final, i know, curious to get your thoughts. Thanks, LB

Justin Jay Watling

Justin Jay Watling

Posted

You can you a program called Savings Bond Wizard to obtain a printout if the full attributes of a bond including current rate of return. Search that name and you should find a link to the Bureau of the Public Debt. That is the governmental unit that handles savings bonds. Giving financial advice without k owing ALL the financial information is inappropriate. Additionally, that issue is not within my area of expertise.

Posted

I completely agree with Attorney Watling. The whole point in establishing POA forms in the first place is to avoid the need for guardians and conservators. If you NEED to get guardianship and conservatorship because someone refuses to honor the POA, that is one thing. (It seldom happens). To voluntarily seek probate appointment when it is not needed multiplies the cost and the hassle geometrically, without any real benefit.

It is up to the Agents and other family members to protect your father from making mistakes with his resources. There are many good ways of doing this, and there are also ways of undoing transactions that he might mistakenly make, IF that occurs.

Many people who do not understand POA forms mistakenly believe probate appointment is required when it is not. I would suggest that you get a second opinion, if someone tells you to seek guardianship.

James Frederick

*** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state.

Posted

An individual who has capacity to make significant decisions and understand their nature and effect doesn't need a surrogate decision maker even if he happens to make poor decisions. An individual who lacks that capacity needs a surrogate decision maker either for some things only (perhaps just finances) or everything (such as finances, residence, and medical issues). An individual who has capacity can appoint surrogate financial decision maker through a general and durable power of attorney and/or health care decision maker through an advance directive for healthcare. Both kinds of documents can avoid the need for and cost of guardianship and a lot of headaches but only if signed while having capacity and if the documents are comprehensive. Good documents will be designed to implement your wishes. For these reasons, these documents should be prepared by a lawyer rather than from one size fits all forms on the internet. A quality comprehensive POA can be essential to protect assets if you need long term care down the road although some states MAY allow asset protection gifts even when under guardianship. If your father has high quality advance dirctive for health care and POA, guardianship probably isn't needed unless family members have serious disagreements or your father is acting contrary to what the surrogate decision makers consider his best interests. Guardianship tends to be fairly expensive and intrusive so most people who have capacity to do legal documents should consider having an elder law/ trusts and estates attorney draw quality POA and advance directive for health care. Lawrence Friedman, Bridgewater, NJ. Certified as an Elder Law Attorney by the ABA approved National Elder Law Foundation, former Chair NJ State Bar Association Elder and Disabilities Law Section, Member Board of Consultors of NJSBA Real Property, Trusts & Estates Law Section, Vice Chair Special Needs Law Section of National Academy of Elder Law Attorneys, and Master of Laws (L.L.M.) in Taxation from N.Y.U. School of Law.

Posted

This really has a lot to do with the law of the state where the person is. But for Florida people, a POA does not allow gifts unless it specifically says it does. You are right Guardianships are expensive and that why you do POA's. If Uncle does not want to act then you will have to get a Guardianship (G). Before doing G ask yourself what do we want done that we can not do with the POA. Making of gifts is probably not goin to be allowed in G without evidence that this is what Dad wanted. Is there a second choice on the POA - if so uncle could resign. Not all POA's are alike and to determine whether more is needed go back to the question - what do we need done that we can't do under the POA. There should be a specific problem that needs to be addressed before going with a G. One problem might be uncle won't act or the POA does not allow him to act. Really need more info.

Asker

Posted

Maybe I ran 2 things together. I dont think G. is needed. Uncle is fine with POA. Reason lawyer gave to get G. was he could give away assets to "wrong" people and even have someone "undesirable" move in. Uncle saying he is POA and "people" are watching what he does with money and elder abuse laws, blah, blah. And he can not "gift" grandkids money at Xmas. All bonds are matured and waiting for them. So with lawyer saying 1 thing and uncle another, I dont get it. If Uncle is POA is there any reason grandkids cant get xmas gifts of cash?

Asker

Posted

he could give money away to wrong people: he is Father, not uncle.

Asker

Posted

Sorry, more info: bonda in fathers name with POD to grandchildren's name. Uncle is saying that means they must wait until death, I take it to mean: POD if bonds were not mature, they are. The gov. has even demanded he redeem them, he has refused because he does not wish to pay taxes on them, hoping to pass that to GK's too.

Mark Russell Lewis

Mark Russell Lewis

Posted

Giving to wrong people is always a problem because POA does not remove the grantor of the POA's power to still act alone. So if Father is demented and interacting with questionable people you may need a G to remove power to give. If father is stable and not interacting with questionable people then probably do not need G for that purpose. POA does not allow the giving of gifts unless it specifically says gifts can be made. Bonds do not go to grandkids until death. POA could but does not have to redeem but if he did he would be well advised to reinvest insimilar POD bonds. Letting the bonds sit tight sounds reasonable without more info.

Asker

Posted

Mr. Lewis, Most of bonds: ones made out with POD to son and daughter are currently being put back into the pot, so to speak. In safety deposit box is mature bonds (roughly 15K to each granddaughter, not much compared to overall wealth) sitting. As I said each GC has just had new babies. To rest of family it would be nice to let the girls have before Gfather passes, so they can say thanks and he can see how much he has helped them. But know one knows if its allowed. If Uncle and brother (who are POA's) can't "gift" it, can Gfather "gift"? or because of AD paperwork can he not? See our dilemma? How can Father "gift" to wrong people but not "gift" to his Grandchildren? Thank You for your help Mr. Lewis.

Mark Russell Lewis

Mark Russell Lewis

Posted

He (father) can gift to wrong people by not knowing what he is doing and once you give the money to "crook" you can't get back.  Until he is legally incapacited and declared by a court to be incapacitated you can't freeze the accounts from him. Again a POA does not have authority to make gifts unless the POA document says he can.  While it is nice to look after the GC its still his money and must be used for him to the exclusion of the GC.  He must support himself but he has no legal obligation to support the GC's. Finally gifts to GC's can affect his Medicaid liability if he has to go to a Nursing Home.  You need to remember the assets are Father's and must go to his benefit first and to the exclusion of people he is not obligated to support - wife and minor children.  I assume that there are known of those so money must be for his benefit first. Assets that are POD should be renewed as POD.  If that becomes a problem look to the POA does it allow the creation of a living trust then that may be the way to go?  I strongly recommend a lawyer with a strength in estate planning, Medicaid, POA's and G's. Mark R. Lewis, Sr. Mark R. Lewis, PA Attorney at Law email mark6073@yahoo.com 6830 Central Ave., Suite D St. Petersburg, FL 33707 Tel: 727-381-1946 Fax: 727-384-4633

Posted

You are in Toledo and I am in Seattle so you have to take what I say with a grain of salt.

I am guessing that Uncle is just overwhelmed acting as the AIF. He should just resign and then the successor AIF takes over. That is how we do it here in Washington. If your brother and you are gong to be making the decisions, your should decide if you want to do so as an attorney in fact under a POA or as a Guardian that is monitored by the court annually or sometime tri-annually.

POAs should be sufficient assuming that 3rd parties are not creating a ruckus compelling a guardianship. However, a guardian can flex his or her muscle much better than an attorney-in-fact ("AIF") under a POA and get more respect from the public when making decision for a 3rd party. Your father has dementia and if a 3rd party (e.g. bank or physician) wants some type of comfort consent from him, he probably will not be able to give it depending how far it has progressed..

You and your brother need to sit and talk with Dad and an attorney I think to discuss the options. If Dad's dementia has progressed too far then just you, your brother and the attorney since it seems from the facts that the two of you will be the decision makers going forward.

I have used POAs and Revocable Living Trusts to avoid guardianship very successfully in the past. A guardianship just gives your brother and you more clout. Which approach is better at this stage of your Dad, brother and your life? You could go either way depending on your Dad's and your specific circumstances. One answer will not resolve all the various issues for all clients. We are talking about both his well being and yours as well since being a fiduciary (AIF or Guardian) is just hard work. You need to talk with the attorney as well, even one of your own choosing if necessary.

If Dad has dementia but is otherwise healthy and has a good life expectancy, getting a guardianship does have its advantages to you since you have more clout. There are few things more maddening in life than being a surrogate decision maker but then having a 3rd party (bank or hospital) say they refuse to accept your decision making authority.

James P. Frederick

James P. Frederick

Posted

While I agree with you, there is no indication at this point that ANYONE is refusing to honor the POA. Until that changes, I am not sure there is any benefit to considering guardianship.

Asker

Posted

Right, Right. The issue really isnt refusing to honor, he wants to do this and seems to think this is his responsibility. I just don't think Uncle understands everything and ends up being this eeyore hand wringer. Example: Father lived alone for 99% of his life and his home looks like it. Only towels from hotels, dirty dishrags, you get pic,right? Uncle (who is next door neighbor) says Oh Yeah, go get what you want for house and make things livable. I spend 300.00 get towels, coffee maker, etc. Since Uncle watches over money daily on computer, he then comes over 2 days later and says" Hey, your dad doesnt spend money like this and "people"?? are watching me and I dont want to get charged with elder abuse laws". Me and my brother are trying to work with him and somewhat around him and HE seems to be making things harder than what they should be. 2 days later uncle will come back to me and say Im just protecting your birth right and if dad ever offers you ten grand, take it. Well HELL NO comes to mind. Uncle is not as wealthy, I am here to caregive for my dad, money will be there and me or my brother are not worried about it, but certainly dont want to look or feel like we are there to exploit the situation. Only thing with money we wondered about was letting Grandchildren get there 15K for Xmas. But I learned POD is straight POD and that takes care of that. Thank You

James P. Frederick

James P. Frederick

Posted

It sounds like Uncle needs to either review a few of these posts or meet with another lawyer who describes all of the costs and hassles associated with guardianship, and the fact that it is totally not needed, at this point. If he reviews this information, he will know you asked about it, which might make him feel "put upon." I would just meet with the lawyer to discuss it. It should be a no fee consultation or a nominal fee. Relatives are funny to deal with, but it sounds like his heart is mostly in the right place.

Asker

Posted

Yes, His heart is in the right place, no doubt about it. I guess anytime someone gets ill, the family can get a little weird, let alone if there is money about. I have watched many families with money get destroyed during this process and if needed I would rather remove myself before family got hurt, I always thought this (father having health issues) would bring us closer as a family. I dont think we are there yet by any means, I hope as time goes on Uncle will become more comfortable and not as nervous. Thank you for your input.

James P. Frederick

James P. Frederick

Posted

You are most welcome!