Estate Planning

FAQs About Estate Planning

Avoiding Guardianship in Old Age

by Rania Combs

A few weeks ago, a client alerted me to an episode of the John Oliver show about guardianships gone wrong.

A guardian is someone appointed by a court to act on behalf of a person who is unable to make responsible decisions regarding his or her daily affairs because of their age, disability, injury, or disease. Currently, over a million individuals are under guardianship in our country, a number likely to rise as the population ages.  Over 50,000 adults in Texas are under guardianship, with their combined estates estimated to be valued at over $4 billion.

Guardianships can be very restrictive and can strip individuals of the right to control their lives. Consequently, Texas courts will often look for less restrictive alternative before appointing guardians, such as a Money Management Program, which connects those in need of extra help with someone who can assist them with paying their bills, balancing their checkbooks, and managing their financial affairs.  When less restrictive options are insufficient, guardians are appointed by a court to take control.

Most appointed guardians are family members who have best interest of those under their care (their “ward”) at heart; however, some guardians, including professional guardians who have no personal connection to their wards, abuse their power and exploit their wards personally and financially.

Guardians control their wards’ property and financial accounts, and can compensate themselves for services they provide for their wards from those accounts. This gives some unscrupulous guardians a means by which to fleece their wards’ assets.

For example, John Oliver discussed one case in which a guardian charged a ward $1,027 to attend Phoenix Suns basketball game and even charged the ward $228 to determine the game’s effect on her mood. Another guardian who represented 100 wards at the same time, billed for 100 hours of services in a single 24 hour day!

Guardians are under the supervision of the state and local courts that appoint them. Although guardians in Texas are required to be trained and certified, courts that are burdened with huge dockets may not have resources to provide the oversight required to prevent exploitation.

Earlier this year, David Slayton, the administrative director of the Texas’ Office of Court Administration testified that 43% of guardianship cases his office audited were not in compliance with reporting requirements. His testimony also cited specific incidents of abuse, including unauthorized withdrawals from accounts, unauthorized gifts to family members and friends, and lack of good record keeping to substantiate the expenditures.

Generally, the need for a guardianship can be avoided by executing a well-drafted durable power of attorney appointing a person you trust to manage your financial affairs. The person you choose as your agent should be someone who you trust implicitly to act in your best interest. You should avoid choosing a person who has a hard time managing his or her own financial affairs or who has legal or financial struggles, as such a person is more likely to justify misappropriating your assets.

There are situations when a guardianship is needed even with a power of attorney, such when a financial institution rejects a power of attorney as stale, or when the agent is no longer available to act. That’s why it’s often wise to re-execute a power of attorney every few years and reevaluate your choices at that time.

You may also wish to execute an appointment of guardian in advance of need identifying who should (or should not) serve as a guardian if one ever becomes necessary, especially if you have strained relationships with some family members. This can avoid a situation where an estranged family member attempts to usurp the authority of your agent by filing a guardianship proceeding by unjustly accusing your agent of mismanagement.

Texas Health and Human Services has an informative Guide to Adult Guardianship, which discusses guardianship and its alternatives. You can read it by clicking on the link.

If you be believe that you or someone you love is being exploited by a guardian, you can submit a complaint with the Judicial Branch Certification Commission, which certifies and regulates guardians in Texas.

About Rania

Rania graduated magna cum laude from South Texas College of Law Houston and is the founder of Rania Combs Law, PLLC. She has been licensed to practice law since 1994 and enjoys helping clients in Texas and North Carolina create estate plans that give them peace of mind.

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