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How Powers of Attorney Can Avoid a Guardianship

by Webmaster Admin on January 1st, 2023
Man asking questions

What happens if you or a loved one suffers an illness, injury, or becomes incapacitated and unable to temporarily or permanently handle financial and health care decisions?

Many people erroneously believe if an incapacitated individual is married, their spouse is immediately able to step in and handle their financial, health care, and legal affairs. Similarly, a parent has no legal authority to handle the financial and health care decisions of a child, once the child attains the age of majority – eighteen years.

Without a valid power of attorney, an interested party would have to petition the Orphans’ Court where the incapacitated person resides to raise a Guardianship proceeding. The judge would then hear testimony in order to decide who should be designated as legal guardian for the incapacitated person. These formal and public Guardianship proceedings are expensive, time-consuming, and the outcome is definitely not assured with respect to who will become appointed as guardian.  

In fact, a judge has no obligation to appoint the spouse or parent as legal guardian and may appoint a professional guardian or another person who the incapacitated person would not have wanted to serve as his or her legal guardian. For example, the judge may determine that the spouse or parent has an inherent conflict of interest since spouse and parents are often the beneficiary of the incapacitated person’s assets. Further, the judge may decide that a professional guardian or another person has more knowledge and experience handling such matters. 

Who should you select and legally designate as your Financial and Health Care Power of Attorney? 

In the vast majority of cases, clients designate their spouse  to serve as their Primary Power of Attorney, and one or more of their children as Successor Power of Attorney. 

While these selections may seem reasonable and suitable, experience has shown that based upon the circumstances and family dynamics, this order of appointment may need be best in all cases. For example, clients often need to use their Powers of Attorney when they are elderly and unable to make prudent decisions. In many cases, the spouse of an incapacitated person may also be suffering from an illness or incapacity at the same time. In such case, while a son or daughter may desire to step in and help out with bill paying, health care decision making, and managing financial investments, the adult child may quickly discover that they are unable to take control of the decision making process until they can prove that the other spouse is not able to serve as the Primary Power of Attorney.

In such cases, the Successor Power of Attorney would be required to prove that the Primary Power of Attorney is unable to discharge his or her fiduciary responsibilities. Therefore, a doctor who is familiarly with the incapacitated person would be required to write a letter stating that mom or dad is unable to handle their legal, financial, and health care decisions. 

While this process may appear simple and a straightforward, questions often arise when a person legally appointed as Primary Power of Attorney is unable to discharge his or her fiduciary responsibilities. Will the doctor write the letter? Will the letter be clear and unequivocal? Will each of the third parties you have to deal with accept the letter? Unfortunately, these issues which often arise are not easy hurdles to overcome.

One option to overcome this issue is to appoint a spouse and adult child to serve as Co-Agents under the terms of an up-to-date Financial and Health Care Power of Attorney.

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