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The Basics of PA Guardianship Part II

This article is a continuation of last week’s discussion about the topic of guardianship.

What Types of Guardians Exist?

There are two types of guardians: 1) Guardian of the Person; and 2) Guardian of the Estate.

A Guardian of the Person is an individual or entity appointed to 1) assert the rights and interests of the incapacitated person; 2) respect the wishes and preferences of the incapacitated person; 3) participate in the development of a plan of supportive services to meet the incapacitated person’s needs; and 4) encourage the incapacitated person to participate in all decisions which affect him or her to the maximum extent possible.

A Guardian of the Estate is an individual or entity appointed to make financial decisions on behalf of the incapacitated individual. Such decisions may include decisions involving insurance transactions, conducting a business on behalf of the incapacitated individual, managing investments, and selling or acquiring personal property.  A guardian of the estate should use the same standard of care when managing the estate of the incapacitated person as an ordinary person would to manage his or her own affairs.

Can the Same Person be Guardian of the Person and the Estate?

Yes. A court can appoint the same individual or entity as both the Guardian of the Person and the Guardian of the Estate.  A court may also appoint different individuals to each position.

Are there Limitations on the Guardians’ Power?

Yes. The court can order a guardianship be either plenary or limited.   If a court determines an individual is totally incapacitated, a plenary guardian may be appointed.  A plenary guardian of either the person or estate grants the guardian the power to exercise all legal rights and duties on behalf of the incapacitated person.   However, plenary guardians are favored only where there is total incapacity and there is no less restrictive alternative.

One such alternative may be to appoint a limited guardian in situations where an individual is found to be only partially incapacitated. The court can restrict the guardian’s authority to only apply in situations where it is absolutely necessary.  In situations where a limited guardian is appointed, a court must identify the powers and authority that a limited guardian has.  The incapacitated person retains all legal rights other than those designated to the limited guardian in the court’s order.

Are There Reporting Requirements for a Guardian?

Yes. A guardian of the person must file an annual report with the court.  The report must include pertinent information about the incapacitated person such as:  1) current address and type of placement; 2) medical or cognitive problems experienced by the incapacitated person; 3) brief description of the living arrangements of the incapacitated person; 4) the types of social, medical, psychological and other support services the incapacitated person is receiving; 5) the opinion of the guardian as to whether the guardianship should continue; and 6) the number of times the guardian visited the incapacitated person in the past year.

A guardian of the estate must file an initial inventory with the court which itemizes the assets owned by the incapacitated person. The guardian of the estate must also file an annual report with the court which includes pertinent information such as:  1) current principal and how it is invested; 2) current income; 3) expenditures of principal and income since the prior report; and 4) the needs of the incapacitated person for which the guardian has provided since the last report.

Is Guardianship Permanent?

No. It may be appropriate to change the individual or entity acting as guardian in the event the guardian fails to perform his/her duties or fails to act in the best interest of the incapacitated person.  Additionally, the incapacitated person’s condition may improve to a point where they no longer are considered an incapacitated person.

However, a guardian cannot simply “transfer” guardianship to another person or entity verbally or through a document. A petition may be filed seeking a review hearing to determine whether the guardianship should continue or whether a new guardian should be appointed.  Such a review hearing may be sought at any time after the appointment of a guardian.

What are Typical Less Restrictive Alternatives to Guardianship?

Public benefits, such as Social Security Disability and Supplemental Security Income, can often be managed without a guardian through the appointment of a representative payee. Veterans Administration benefits can also be managed without a guardian through the appointment of a fiduciary.

In most other situations, a common alternative to guardianship is to appoint another individual or entity to act on your behalf through a legal document called a power of attorney. There are several types of power of attorney, including a financial power of attorney, a health care power of attorney, and a mental health care power of attorney.

An individual must have the capacity to execute a power of attorney document. In other words, the individual must be able to understand that they are appointing another individual to act on their behalf with regard to their financial affairs, health care treatment decisions, or mental health care treatment decisions. This capacity determination is made by the attorney drafting the document.

While the appointment of a guardian for an incapacitated individual may be unavoidable in some cases, guardianship proceedings can be time consuming and costly. Alternatives to guardianship may be more efficient and economically feasible.  Often guardianships can be avoided with proper planning or the assistance of family or supportive services.  To discuss all of your planning options, contact an experienced elder law attorney.