July 01, 2013

How to Avoid Guardianship (for Your Clients and Yourself!)

Lawrence A. Frolik

Alzheimer’s, dementia, senility: call it what you will, as we age, the possibility of losing mental capacity is a real fear—and a realistic one, as between one-third and one-half of all those age 85 or older suffer some degree of dementia. The older the individual, the more likely he or she is to suffer some loss of mental capacity. For many, that loss is so great as to warrant the need for a guardian who can handle the individual’s financial and personal affairs.

Guardianship is governed by state law, and, therefore, it naturally varies somewhat from state to state. In some states, guardianship is known as conservatorship, particularly if it applies only to an individual’s assets. But in this article, the term “guardianship” will be used as a general term that refers to any court-appointed decision maker for someone with diminished mental capacity.

The degree of loss of mental capacity necessary for the court to appoint a guardian depends on the state statute, but, in general, individuals must be unable to make reasonable decisions about their person and property.

Being the subject of a guardianship is not what anyone should aspire to. Having a guardian named is the ultimate loss of personal autonomy and self-determination. Guardianship is also expensive, can be burdensome to the guardian, may result in family disharmony, and, because it is the subject of a court proceeding, may result in embarrassing public disclosures. And while aging and the possibility of the loss of mental capacity are largely unpreventable, being the subject of a guardianship is something that can be avoided.

However, merely because an individual is mentally incapacitated (this is the preferred term that has replaced “incompetent”) does not mean a guardian will necessarily be appointed. Obviously we cannot “plan” not to become mentally incapacitated, but we can plan for the possibility of mental incapacity severe enough to justify the imposition of a guardian. Proper planning can largely eliminate the possibility that you will ever be the subject of a guardianship.

Durable Powers of Attorney

The most basic need—“don’t leave home without one”—is a durable power of attorney (POA). Many of us attended law school before the advent of POAs, and we were taught under traditional agency law that the authority of an agent (then referred to as an “attorney-in-fact”) terminated if the principal lost mental capacity. In the last 25 years, however, all states have enacted POA statutes that permit the principal to appoint an agent whose powers continue even if the principal loses mental capacity.

Having a POA is essential. If the POA document is properly drafted, it can grant the agent sufficient authority so that a guardian is not needed for asset management. The secret of an effective POA is to make sure the agent has the authority to do whatever is necessary. State POA statutes typically provide a list of powers that a principal can delegate to the agent and, unless there is good reason not to do so, all those powers should be included in the POA.

However, a few powers deserve special consideration. These include the power to make gifts and amend the principal’s estate plan. Also important to consider is the relationship of the agent, if any, to any inter vivos trusts created by the principal. For example, can the agent revoke a revocable trust or replace a trustee? These issues, though important, should not deter anyone from executing a POA. Any doubts as to whether to delegate a particular power to the agent should usually be resolved by denying the power, as it is better to be safe than sorry. If later the principal decides the power should be granted, a new POA with expanded powers can be easily drafted.

Although some standard POAs cannot take effect until the principal is mentally incapacitated—known as springing POAs—these are not desirable because of the likely difficulty of establishing that the principal is incapacitated, which is one of the problems with guardianship that the POA is supposed to avoid. Instead, the preferred POA is one that is effective upon being signed. Principals should trust enough whomever is named as agent not to try to use the POA while the principal is still capable of handling his or her affairs. If they do not trust the agent in this way, principals can hold on to POAs and instruct their agents or lawyers to retrieve and use the POAs only if and when the principals lose the capacity to handle their financial affairs.

Inter Vivos Trusts

While a POA may seem to be the solution, it is not always sufficient, particularly because third parties often refuse to accept the power of the agent or because of the difficulty of finding an agent who has the financial wherewithal to wisely handle the affairs of the principal. Consequently, many advocate that older individuals execute revocable inter vivos trusts and fund them with essentially all of their assets, though usually not the family home. As long as the settlor retains capacity, the trust has very little effect because the trust income remains available and taxable to the settlor, who retains the power to make unlimited distributions of income and principal to himself or herself, as well as the ability to revoke the trust. If, however, the principal loses mental capacity, the power to revoke the trust terminates, and the preselected successor trustee takes over. The successor trustee generally finds little difficulty dealing with third parties, and if the trust assets are worth enough, a professional corporate trustee may be willing to serve as trustee.

If an individual has a POA to handle day-to-day finances and a trust to manage the investment and disbursement of assets, it is difficult to see why any court would impose a guardianship. Of course, the hope is that no one would bother to file a guardianship petition because the principal’s assets are being properly cared for in the trust and the daily financial needs are being met by the agent under the POA.

Appropriate Housing

Even individuals who have a POA and a trust may still find themselves facing guardianship if they live in inappropriate housing. Many elder law attorneys can relate stories of being called by adult children who plead for some way to force an aging parent to move out of the family home. The parent, who is physically frail and losing mental capacity, refuses to move out of the large house even though he or she is unable to drive, has difficulty climbing the steps—every trip to the basement to do the laundry is a risky adventure—and is not properly maintaining the house. To be sure, merely being at risk in one’s home is not sufficient to warrant guardianship. But it may be enough to cause the children to file a petition for guardianship if only to force the issue and get the parent to move.

To avoid this family conflict, older individuals should admit that the housing that was desirable when they were younger often becomes a burden as they age. The house is often too large, too expensive to maintain, and, if it has steps, too dangerous. A single family house can also be very isolating, particularly as driving skills erode and every trip becomes a potential accident.

A move from the family home does not have to mean a move to a cramped, undesirable apartment. It can actually be a time to dispose of all that accumulated “stuff.” Surely it is better to get rid of those state bar committee notes from 19-whatever than to leave that burden to heirs. Because of the aging of the “baby boomers,” developers are building housing to appeal to the age 60-plus buyer. Spacious condominiums located near shops, restaurants, and places of worship are increasingly available. On-site support such as a doorman or valet parking will assure the family that “Mom” is not alone and that help is close at hand.

If more support is needed now or in the future, continuing care retirement communities can provide different levels of housing options based on an individual’s mental and physical capacity. Individuals can move into independent living arrangements, such as a townhouse or apartment, with the assurance that, as their need for more support increases, the community will provide it, even to the level of nursing home care.

Advance Healthcare Directives

The loss of mental capacity also means the loss of ability to consent to health care. For that, it is necessary to execute an advance healthcare directive, which in some states is known as a healthcare power of attorney. Both are different from, and much better than, a living will. An advance healthcare directive names a surrogate decision maker for healthcare decisions, an agent, if you will, who, just like an agent for property management, makes healthcare decisions for the mentally incapacitated principal. Like a POA, state law determines which powers can be delegated to the surrogate, as well as which requirements, such as the number of witnesses, are necessary to create a valid directive.

The key is to invest the surrogate with all the power needed to make healthcare decisions for the principal. This power should include the right of the agent to refuse or terminate life-sustaining medical care. Here, however, things can get a bit sticky. A few people, usually for religious reasons, do not want their health care ever terminated or only in extreme circumstances. But most of us are willing to refuse or terminate life-sustaining care at some point. Which point is the “right” point is not as clear. Whatever one’s personal view, the key lies in who is named as surrogate. The hope is that the surrogate will make a decision consistent with the patient’s wishes, values, and instructions. Known as “substituted judgment,” the idea is that the surrogate does what the patient wants, not what the surrogate or the doctor thinks is best.

Most surrogate healthcare decision makers are the spouse, life partner, child, or grandchild—someone in whom the patient has great trust and confidence and who knows the patient well enough to be able to apply substituted judgment. Of course, spouses die or lose the capacity to act as a surrogate, children become estranged or have values quite different from their parents, and, increasingly, older individuals have no spouse, partner, or children. In these instances, the patient may feel less confident in the wisdom of the surrogate and may wonder whether naming a surrogate makes sense. Yes, it does.

Most states have enacted statutes that automatically name a default surrogate if the patient has not done so. The statutes establish a priority, beginning with the spouse and ending with someone with a personal interest and concern for the patient. So a patient cannot avoid having a surrogate, much like the passage of property at death—you can either write a will or rely on the intestacy statute, but, in either case, you can’t take it with you. Similarly, if you don’t name a healthcare surrogate, the state will do it for you.

So it is best to name the surrogate, even if those named are the same individuals that the state would name by default, because in the document that identifies the surrogate, the principal can provide instructions to the surrogate. These instructions can be mandatory or precatory, very specific or merely an expression of general values. For example, the principal might suggest that in the case of severe dementia, death by pneumonia would be preferable to continued existence. Or the principal might mandate that the surrogate never consent to tube feeding. Many principals emphasize the desire for aggressive pain relief—palliative care—over attempts to prolong life. Others discuss their desire for a dignified death or end-of-life care consistent with their religious beliefs.

The purpose of including instructions and statements of values is to both assist the surrogate in substitute decision making and to provide comfort and support to the surrogate, who has to make very difficult life-and-death decisions. Of course, you should discuss end-of-life care with your surrogate to ensure that the surrogate understands what you want done and also to make sure that your surrogate is willing to make critical, and sometimes emotionally difficult, end-of-life decisions.

Living Wills

An alternative or supplement to appointing a surrogate healthcare decision maker is to create a living will. A living will is an attempt to dictate future care decisions in case you become mentally incapacitated. Overwhelmingly, living wills are used to refuse or terminate care at the end of life.

Although living wills were once thought of as a desirable way to control end-of-life care, today most commentators favor the appointment of a surrogate. A living will is a document in which the principal provides consent or refuses to consent to certain medical procedures in the event of impending death. Every state has a living will statute that describes when the living will can take effect, which is typically only when death is imminent or the patient is permanently unconscious. These statutes also enumerate the signing requirements, such as the number of witnesses.

Unfortunately, living wills have serious drawbacks. By law they are very limited in application; they usually apply only when death is very near. In reality, this translates into the idea that death is certain to occur despite the provision of medical treatment. This requirement limits the application of a living will to a narrow set of circumstances. Contrary to popular belief, a living will does not make “pulling the plug” easy or inevitable. Even if the chance for recovery is slim, medical treatment may continue to be provided despite the existence of a living will.

Surrogates are also known to ignore directives in the document that appointed them, but at least the intent of the patient is clear, and the treating physician knows who is supposed to make the treatment decisions. Although the appointment of a surrogate does not guarantee that one’s wishes will prevail, it does create the best chance that medical care at the end of life will comport with a patient’s values and beliefs.


The appointment of a surrogate healthcare decision maker is one more way to avoid being placed under a guardianship. If you appoint a surrogate, move to appropriate housing, appoint an agent under a POA, and place most of your assets in an inter vivos trust, you will have gone a long way of assuring that, even if you become mentally incapacitated, you will not find yourself the subject of a guardianship petition. In short, guardianship is a result of a failure to properly plan for the possibility of mental incapacity. Don’t let that happen to your clients—or you.

Lawrence A. Frolik

Lawrence A. Frolik (frolik@pitt.edu) is the Distinguished Faculty Scholar and Professor of Law at the University of Pittsburgh School of Law. He is one of the country’s preeminent elder law specialists and is considered one of the founders of the field.