JULY 18, 2011 VOLUME 18 NUMBER 26
“Elder law” (what we practice here at Fleming & Curti, PLC) can be a fairly broad practice area. We work in estate planning, long-term care planning, guardianship and conservatorship, trust administration and probate — and each of those areas encompasses a number of other topics as well. But some variation of the question below is one of the most common questions potential new clients ask us. We want to take a moment to explain the difference between two poorly-understood legal concepts: powers of attorney and guardianship/conservatorship.

Here’s the question, distilled to its essence: We had to put dad into a nursing home. The staff there are telling us we need to get a power of attorney. Can you prepare a power of attorney for us?

Seems like a simple enough question. A power of attorney is, after all, a fairly straightforward document. You can download a form from the internet, and many seniors have already signed one. Turns out that the question is usually much harder to answer than it appears, however.

Different kinds of powers of attorney

The first issue: there are different kinds of documents that are all called “powers of attorney.” As if that wasn’t confusing enough, some states (and some practitioners) use different terms — “health care proxy,” or “patient advocate designation,” or “durable power of attorney,” for example — for what are essentially the same things.

In general terms, there are two well-recognized kinds of power-of-attorney document. One kind designates some one else who can make decisions about the signer’s health care — medical authorization, placement decisions and the like. The other names some one to handle financial matters — check signing, sale of property, transfers of assets into a living trust, even gift-giving (in some cases).

When the nursing home tells you that you need a power of attorney for your recently-admitted father, they are probably most concerned about the health care power of attorney. They want someone to be able to approve medications and treatments, to make decisions about hospitalization (or declining hospitalization) and to notify about your father’s condition and progress. They may also be interested in making sure you have power to handle his finances, especially to pay his nursing home bills — but that may not be their primary focus.

Distinguish guardianship and conservatorship

Contrast the power of attorney with the guardianship/conservatorship process. If you have to secure a guardianship or conservatorship with regard to your father, that means you will have to file a court proceeding and go through a number of mandated procedures.

You will probably be hiring a lawyer to represent you; in Arizona, a lawyer will certainly be appointed to represent your father (unless he already has his own lawyer). There will also be a medical report, and a court investigator. A process server will have to physically hand (or read) the court papers to your father. A hearing will be held at the courthouse. Once you are appointed, you will have annual reports to file with the court. If you have been appointed as conservator, you will also have to file a “surety bond” — an insurance company’s guarantee that your father’s estate will be made whole in the event that you misspend his money or otherwise behave inappropriately.

Wait — what’s the difference between guardianship and conservatorship (you ask)?

It’s a good question. Be careful about generalizing here — different states use different versions of these terms to mean different things (and sometimes they have the opposite meaning in other states). But in Arizona, guardianship is the court process to secure control over an incapacitated person’s health care and placement decisions. Conservatorship is the court process to secure control over the finances of a person who needs protection.

Roughly speaking, a guardian (in Arizona) has the same kind of authority that a health care agent might have. Meanwhile, an Arizona conservator has the same kind of powers and responsibilities that an agent under a financial power of attorney might be given.

So which do I want — power of attorney or guardianship/conservatorship?

It’s not really which one you want so much as which one you can get. A power of attorney requires a competent signer, willing to give the power (health, financial or both) to you. A guardianship or conservatorship requires the court to find that your father is not able to make his own decisions — in essence, not able to sign his own power of attorney. So our first question to you will be: what does his doctor say about his competence? What do you think: will he understand the nature of a power of attorney, and be willing to give you that authority?

If your father is already too far into the dementia process to sign a power of attorney, you may have no choice but to seek guardianship and/or conservatorship. If he is mentally pretty alert, and able to understand (and explain) the reasons why he might sign a power of attorney, it might well be appropriate to talk with him about that choice.

What are the relative costs?

Once again, it is hard to generalize. Getting your father to talk with a lawyer, discuss powers of attorney (and, probably, estate planning generally) and getting him to sign after he has agreed to the documents should probably cost a few hundred dollars — more, if it takes multiple meetings, he has unusual estate issues or wishes, or there is family discord to deal with. Guardianship and/or conservatorship will probably cost ten times as much, and assure continuing legal involvement as future accountings and reports have to be prepared and filed.

OK — I think dad will understand the power of attorney and be willing to sign it. Can you please come to the nursing home with one and get him to sign?

Would that it were that easy. A good lawyer will want to meet with your father more than once. While many make home (or nursing home) visits, they will probably charge more. And a key element of representation of your father requires that he be the client — that may mean that after we have talked about his situation extensively, we are uncomfortable being the ones who prepare his documents.

In that case, we are likely to refer him to another lawyer. We will probably suggest one geographically close to him, and give you some advice about how to make the initial contact. Basically, we want to make sure that (even if you make the call and set up the appointment) there is no question in your father’s mind that his lawyer is in fact his lawyer. You may be absolutely certain that you and he are on the same page — but we sometimes see situations where that turns out not to be the case, and we all want to make sure his wishes are paramount.

Do I really have to do any of this?

You might not, actually. In Arizona (this is not true in every state) there is a mechanism for family members to make health care decisions for someone who never got around to signing a health care power of attorney. There is a priority checklist (starting with spouses and working through family friends) for who can make decisions. One limitation: the person named in the checklist can not make a decision to withhold or withdraw life-sustaining artificially-provided food and fluids.

There is no similar mechanism for financial decisions. If your father has only his name on his bank accounts (or brokerage accounts, car title or deed to his house) then it will require either a power of attorney or a conservatorship to get authority to liquidate assets, pay bills or even request annual minimum distributions from his IRA. Quick — go look to see if he didn’t sign a power of attorney years ago.

This is all so complicated. Can’t I just get the power of attorney form, fill it out and get him to sign it?

Yes, and it will probably work just fine. If it doesn’t, you could look like you were trying to take advantage of him. If someone later decides your form is inadequate, or not properly signed, or has some other defect, you might not find out about it until after he is clearly incapacitated and unable to sign a new power of attorney. But candidly, those are not the most likely outcomes. What we offer is professional counsel, answers to complicated and personal questions, and peace of mind. We’re pretty comfortable that our services are worth what we charge.

We hope that helps. Good luck with your father, whether we see you or not. We know that this is a difficult time, filled with anxiety and unexpected challenges. There are also a number of rewards along the way, but no one should minimize the work you have undertaken.

Oh, by the way — if it’s your mother, your aunt, your son or your sister you are caring for, the answers are mostly the same.