An Inexpensive General Power Of Attorney Document May Be All That You Need Instead Of A Guardianship
Many times, I have been contacted by a client or potential client who requests to initiate a guardianship application for a family member because a doctor has diagnosed the family member with dementia and suggested that a guardianship was necessary. However, this is not always the case and additional questions need to be asked and additional options need to be explored before reaching such a conclusion.
I always look at a situation such as this as reaching a fork in the road with two potential routes to take.
One route is a guardianship. This is a legal proceeding involving the probate court in which a judicial determination must be made that the ward is not competent to handle his or her personal affairs. There is a guardian of the person to take care of the individual and his or her own personal needs and a guardian of the estate to take care of the wards assets. A guardianship should be the option of last resort. It involves court costs and significant attorney fees, a background check of the applicant, bonding by an insurance company if the ward has assets, guardianship training, yearly guardianship plans, reports and accounts and prior court approval before spending any of the ward’s assets. It is very involved and continuous process. However, sometimes, this is the only other option. If the ward is clearly not competent, you have no other choice.
However, even if the doctor may say that the family member has dementia, there may be less restrictive options. The other route in the fork in the road is the power of attorney option.
POWER OF ATTORNEY OPTION:
In Ohio, there are usually two types of powers of attorney: first- a health care power of attorney: and, second, a general power of attorney, which is basically a financial and legal power of attorney. These documents have to be executed by the individual, with the health care power of attorney either notarized by a notary public or witnessed by two disinterested individuals and the general power of attorney notarized only. Essentially a general power of attorney allows an individual to designate a person to handle all financial matters, transact business and conduct all legal matters for him/her. The cost for preparation of a power of attorney typically is pretty nominal.
When a client comes in to see me about initiating a guardianship due to dementia, I first ask if the family member could understand the concept of a power of attorney, who it is being granted to, the nature of the family member’s assets and next of kin and whether the family member is willing to grant such powers. Even if the person has dementia, often, her or she can discuss with me the power of attorney option and understand it completely and be very clear that he or she wants this other family member to act on his or her behalf. As far as I am concerned, this is sufficient competence to execute such a document, and I am willing to provide the necessary notarization to make it legal. This allows everyone involved to avoid an unnecessary, expensive, time-consuming and yearly responsibility.
As stated above, sometimes a guardianship is the only option. However, the bottom line is that if you are told that a family member needs a guardianship due to failing mental or physical health, don’t make a decision until you speak to an elder law specialist and explore all of your options. An inexpensive general power of attorney document may be all that you need.
The other takeaway from this post is the importance of seeking competent estate planning advice and obtaining a general power of attorney well before any dementia or other competency problems set in.
Guardianship, Power Of Attorney, or Estate Planning Questions? Let Us Help You!
At Holzfaster, Cecil, McKnight & Mues, located in Dayton, Ohio, top-notch estate planning doesn’t need to be complicated or expensive! To learn more, go to our website at www.hcmmlaw.com. Or, please contact us at (937) 293-2141 to schedule an appointment for an initial consultation.
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Joseph E. Balmer
Joseph Balmer manages the Probate, Trust and Estate Administration department at Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has been certified by the Ohio State Bar Association as a specialist in Estate Planning, Trust and Probate Law since 2006.