Understanding Power of Attorney
When is a Power of Attorney (POA) necessary?
Any person with assets such as a vehicle, house, business or bank accounts should sign a legal power of attorney naming a trusted person as agent to make decisions protecting and preserving those assets in the event of an emergency. Suppose you are suddenly rendered incompetent or called out of the country -- have you properly authorized someone with a power of attorney to manage your property while you cannot? A POA is equally important in cases where a parent needs to give temporary custodial authority of a child to another adult, or where a person wants to appoint someone else to make medical decisions.
Which Power of Attorney is right for you?
There are four principal types of power of attorney: a general POA, a limited POA, a health care POA, and a custodial POA for minors. Each of these is explained more fully below.
General POA: A general POA gives the agent broad powers over all of the assets of the principal, including the right to buy and sell property, access private records, use and dispose of personal property and essentially do anything with the principal's property that the principal him/herself could do. Generally a POA should be written to grant the broadest possible powers to cover nearly every situation imaginable. A general POA can be either "springing" or "durable."
Limited POA: A limited POA gives the agent very specific powers. Usually this form of POA is used to authorize the agent to take a specific action, such as accept an offer to buy the principal's house or use the principal's car. A limited POA is also referred to as a "special" power of attorney and can be either "springing" or "durable."
Health Care Power of Attorney: A health care POA grants the agent the power to make medical decisions for the principal when the principal cannot make that decision for him/herself. This might occur when the principal slips into a coma after a motor vehicle accident. With a properly drafted health care POA, the agent has authority to consult with the principal's physician, evaluate the risks of certain medical procedures, and give or withhold consent for the physician to perform the procedure. The Health Care POA only becomes effective when the principal is unable to make medical decisions for him/herself because of mental incapacity.
Custodial Power of Attorney for a Minor: A custodial POA for a minor is used when a parent or guardian of a child needs to temporarily appoint another adult to make day-to-day decisions for a minor child. This type of POA should be used whenever a parent leaves his or her children with another adult. Generally a custodial POA document should grant broad powers to give the temporary guardian maximum flexibility and authority.
Guardianship for the Adult Child
As a parent of a child with special needs, you are probably very involved in the medical care, education, and personal issues of your special child. But, when your child reaches the age of 18 years, you will no longer have the decision-making rights you are accustomed to having; you do not automatically continue to be your child's guardian. The law presumes that all adults are competent to make decisions, unless proven otherwise, regardless of whether or not they have a disability. Therefore, in order for you to continue to have parental authority after your child reaches 18 years of age, you must file for "guardianship."
Guardianship is a legal relationship between a competent adult and a person over the age of 18 years who is unable to make decisions for him or herself. The disability may be caused by mental illness, developmental disability, accident, age, or other causes. The court makes the decision to assign guardianship based on the individual's ability to handle personal decisions, money, property, and other similar matters. The disability itself may not be reason enough to declare someone incompetent. Rather, it is the incapacity of the individual that requires a guardianship.
The guardian is given the right to make decisions on behalf of the individual with a disability. When the court gives the rights to the guardian, they are taken away from the individual. Since this causes deprivation of liberty and dignity, the law requires that guardianship be imposed only when alternatives are proven to be ineffective. Typically, the guardian is given the same rights a parent has over a minor child; however, the guardian does not have to use his/her own funds and the guardian is not liable for the acts of the individual with the disability.
Although every state has its own specific laws on guardianship, most states have the following four types:
Guardian of person or property: When an individual needs assistance with personal issues (i.e., where to live, consent for medical treatment, etc.), a guardian of person may be appointed. A guardian of property, on the other hand, typically has power strictly over the individual's property or assets and not over personal issues.
Full Guardianship: This type of guardianship includes power over both an individual's person and property. It is the most common type of guardianship, and is also the most restrictive. Full guardianship is typically for an individual who is severely disabled and is unable to make informed decisions.
Limited Guardianship: Limited guardianship is used so that an individual can retain as many rights as possible. With this form, a guardian is only given decision-making rights over specific areas where evidence exists demonstrating that the disabled individual is not competent to make informed decisions for him/herself. For example, a guardian may be given rights solely to consent for medical treatment. Since the law is interested in maximum independence for all individuals, limited guardianship is usually preferable when possible.
Temporary Guardianship: Some states allow guardianship for a specified period of time. This type of guardianship applies to temporary situations that arise due to drugs, momentary illness, or a special medical situation. Once the problem has been resolved, the guardianship ends.
The Probate Code has a recommended order of preference for appointing a guardian:
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The individual or organization named by the person in need of a guardian;
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The spouse;
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An adult child;
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A parent or person nominated by the will of a deceased parent;
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Any relative with whom the person in need of a guardian has lived for more than six months prior to the filing of the petition;
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A person nominated by the individual who is caring for the prospective ward (incapacitated adult) or paying benefits to him/her (5-311);
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State government agency.
Guardianship should be given to a person who plays a significant role in the individual's life. It should be a person who respects the dignity of the individual with the disability. Guardianship can be given to two individuals (known as co-guardianship) if they wish to share the duties.
If the parent chooses to be the guardian, consideration must also be given to what will happen to the child upon the parent's death. A sibling, family member, or close friend would likely be the next best choice;. However, if there is no such person available to provide guardianship, there are two types of guardianships available: public and corporate. Public guardianship is provided by individuals who have an agreement with the state or local government agency to provide services. Unfortunately, public guardians generally have large caseloads, and the time allotted to each individual can be minimal. Therefore, public guardianship is usually considered when all other options have been exhausted. A corporate guardianship is an incorporated agency that provides guardianship by assigning a professional staff member or volunteer to carry out guardian responsibilities. Parents can contract with a corporate agency to start services upon their death or when they are no longer able to care for their child.
To begin guardianship proceedings, a Petition for Guardianship must be filed with the court in the county in which the individual lives (if the individual lives in a residential school, it can also be filed in the county in which the parents live). The petition involves areas such as the nature of the incapacity, the reason for guardianship, names of the proposed guardians, and information regarding the individual's property. Once the petition has been filed, the court may appoint a temporary guardian (ad litem) to determine whether there is a need for guardianship and the proposed guardian is appropriate. The temporary guardian also meets with the individual with the disability to determine if an attorney is needed to represent the individual. A written report is then submitted to the court.
At the hearing, the individual must be present, unless there is a reasonable justification for his or her absence. The proposed guardian is also usually present. The court will review the petition and report provided by the temporary guardian (if applicable), will listen to any testimony, and then will determine whether a guardian is necessary. Should it be decided that a guardian must be appointed, the type of guardianship is determined and an order is entered.
The guardianship stays in effect until the court orders it terminated. Anyone, however, may petition the court at any time to modify or terminate the guardianship, including the individual with the disability.
Guardianship & Conservatorships
A guardianship or conservatorship is a legal mechanism that grants an adult legal power to make decisions for another person, one who is considered incapable of making decisions for him/ herself. In the case of a minor child, guardianship or conservatorship generally will terminate when the child turns 18 or, in some states, upon marriage if the child marries before age 18. Use of terms such as guardian or conservator and their meanings vary according to state. Special Planning recommends that you seek the advice of specialized legal counsel to determine whether these kinds of mechanisms are available in your state and applicable to your own circumstances.
There are also different types of guardianship or conservatorship, each of which grants the guardian or conservator different powers. A natural guardian generally refers to a parent. In most cases, a natural guardian has custodial rights but only limited rights to control the assets of a child. Guardianship of the person is similar to custody. A guardian ad litem is often appointed only for the limited purposes of litigation. Guardian of the estate or guardian of the property or conservator usually refers to the person appointed to manage assets and financial matters for the person deemed incapable. When your child turns 18, he or she may need a guardian or conservator to oversee certain areas of his/her daily life.
General Conservatorship or Guardianship of the Person and Estate: This type of conservatorship or guardianship typically provides full decisionmaking powers with respect to finances, medical matters, living arrangements, etc. for a person deemed to be incapable of handling such matters on his or her own.
Limited Conservatorship or Guardianship: Powers of a conservator or guardian can often be limited to reflect the needs of the individual who is incapacitated or disabled, and laws in a number of states specifically provide for the appointment of a limited conservator or guardian for certain individuals with developmental disabilities. These types of arrangements are often used in special needs cases. A limited conservator or guardian is appropriate for individuals whose conditions impair their ability to care for themselves or their property, but not to the extent that a general conservatorship or full guardianship is required.
A limited conservatorship or guardianship encourages maximum self-reliance and independence of the adult with developmental disabilities by giving the conservator or guardian power only over those activities that the individual is unable to handle.
Alternatives to Guardianship and Conservatorship
Depending on personal circumstances, avenues other than guardianship and conservatorship relationships may exist that can help an individual feel more independent and minimize legal involvement. For example, if your child only needs assistance managing his money, he may be eligible for help through the Supplemental Security Income program (SSI) offered by the federal government. If appropriate, an SSI Representative Payee can be designated to receive and disburse SSI money on behalf of your child, a function that might otherwise be performed by a court appointed guardian. The Representative Payee must make an annual accounting to the Social Security Administration on how funds are spent.
Another option is Durable Power of Attorney, whereby the individual who has a disability allows certain decisions, such as medical, property, or living situation, to be made by another person, on his behalf, without court intervention. A Special Needs Trust can also be effectively used by a trustee to manage the finances and personal effects of a person who has a disability, rather than a court-appointed general guardianship or conservatorship.
