When a person has significant problems managing his/her personal or health care or property or financial affairs, a guardianship may be appropriate.  A guardianship should be viewed as an option of last resort, however, because it deprives an adult of very significant personal rights and can be costly and time consuming, both to create and to manage, as it involves going to Court periodically and may necessitate hiring an attorney.

Before pursuing a guardianship, the specific problems the person is having should be considered first, and thereafter whether other alternatives are available to address those problems.  For example, the combination of:

• Creating a representative payee account through the Social Security Administration, and
   

• Providing for the automatic payment of bills ...

is far simpler than creating and managing a guardianship and may suffice for someone with money management problems.  Social Service agencies such as DSHS or Senior Information and Assistance may be able to help with these options.

Sometimes a guardianship is pursued unnecessarily when a person needs help managing his/her personal care or finances and his/her friends or family are unsure what to do.  Some alternatives to a guardianship that may address the problems are described below.

A person capable of making decisions can arrange for someone else to manage his/her finances or personal care decisions either immediately or only if incapacity occurs in the future.  Several commonly used legal tools to do this are:

1. For Health Care Decisions

   1. Durable Power of Attorney for Health Care

   2. Health Care Directive ("Living Will")
       

2. For Financial Decisions

   1. Financial Durable Power of Attorney

   2. Trust

   3. Joint Property Arrangement

A Power of Attorney is a document in which a person (called the "Principal") gives someone else (called the "Agent" or "Attorney-in-Fact") legal authority to act on the Principal's behalf.  By law, however, the Agent's authority terminates upon the subsequent disability or death of the Principal, hence the need for a Power of Attorney that survives the Principal's subsequent disability: a Durable Power of Attorney.

A Durable Power of Attorney is one in which the Agent's authority continues if the Principal later becomes incapacitated or dies.

A Durable Power of Attorney may be written to take effect immediately (an "Immediate Durable Power of Attorney") or to take effect only if and when the person becomes incapacitated (a "Springing Durable Power of Attorney").  A Springing Durable Power of Attorney should contain language describing the criterion for incapacity, how it will be determined, and who will determine it.

 A person who appoints an Agent in a Power of Attorney.

The person appointed by, and authorized to act on behalf of, the Principal in a Power of Attorney.

Note: The name "attorney-in-fact" means "someone who represents another" and is simply another name for an Agent and has nothing to do with whether or not the Agent is a lawyer or has any legal training.  An "attorney-at-law" is "someone who represents another at law" --- in other words, a lawyer.

The extent of an Agent's authority under a Power of Attorney is determined by the language in the document that grants the authority.  The document may give an Agent broad authority, such as the power to conduct all business or enter into contracts.  Alternatively, a Power of Attorney may grant only narrow authority, such as only the power to sell a particular piece of property on specified terms.

It is possible to use a Durable Power of Attorney in two situations:

• An "old" Durable Power of Attorney: To continue to use an existing Durable Power of Attorney that its Principal signed when he/she had capacity (whether or not he/she now continues to have capacity), and
   

• A "new" Durable Power of Attorney: For the Principal to sign a new Durable Power of Attorney as long as he/she now has capacity.

The problem, however, is that once a person has lost capacity, he/she is no longer legally able to make a Power of Attorney.  Consequently, if someone already qualifies for a guardianship, the alternative of his/her signing a Power of Attorney is no longer available.

That depends on the Power of Attorney itself.  So long as it qualifies as a Durable Power of Attorney and remains valid, its Agent's authority should survive its Principal's incapacity.  Whether the Agent's authority under the Power of Attorney would be enough to provide the care actually needed would have to be determined.

The simple answer is "If the named Agent can't be found, is unavailable, or refuses to act."  In any of these cases, however, it might be possible to petition the Court to appoint a willing and able Agent.

The more difficult answer, however, is when a conflict develops between the Principal and his/her Agent.  Practically speaking, a Durable Power of Attorney is effective only so long as its Principal is willing to live with his/her Agent's decisions and actions.  If the Principal is no long willing to accept a decision or action of his/her Principal and attempts to revoke the Agent's authority, and if the Agent believes that the Principal is incapacitated (and has, therefore, lost the ability to revoke the Agent's authority), or if the Principal begins taking harmful actions from which he/she is unwilling to be restrained, the conflict will need to be resolved, and the appropriate place to do that is in a guardianship proceeding.

Durable Powers of Attorney have many advantages.  They are relatively simple to arrange and less costly than other alternatives, such as trusts or guardianships.  In contrast to joint property arrangements, use of a Durable Power of Attorney makes clear that the Principal's assets are to be managed in the best interest of the Principal, and that no current transfer of ownership is intended.

Durable Powers of Attorney have one major disadvantage --- they can be the source of substantial abuse, as unlike guardianships, with a Power of Attorney, its Agent acts without any supervision.  While Washington law provides a court procedure to address certain issues involving Powers of Attorney (such as failure to provide an accounting), no one is "looking over the Agent's shoulder" to ensure that he/she is truly acting in the Principal's best interest, a Power of Attorney is about as much of a "license to steal" as is possible, and it is usually difficult or impossible to obtain compensation for losses if an Agent is dishonest or mismanages his/her authority.

Caution:  A person chosen to serve as an Agent under any Power of Attorney should be someone in whom the Principal has great confidence and trust.  Probably the most frequent cases of elder abuse involve Agents under a Power of Attorney who exploit their authority by self-dealing (ie, taking an action under the Power of Attorney that ostensibly is for the Principal's benefit but in actuality benefits the Agent or his/her friends, family, etc.).

A Durable Power of Attorney in which its Principal grants to his/her Agent decision-making and action-taking powers related to the Principal's health care and usually specifies for his/her Agent what those decisions shall be.  Being a Durable Power of Attorney, the Agent's authority will survive the Principal's later disability or death.

 Any individual who:

1. Is an adult (ie, has attained age 18 years), and

2. Has legal capacity.

So, for example, the following individuals are unable to make a valid Durable Power of Attorney for Health Care:

1. A minor, or

2. An individual who lacks personal-decisional making capacity, such as an incapacitated person for whom:

   1. A General Guardian of his/her Person has been appointed, or

   2. A Limited Guardian of his/her Person has been appointed, with that Limited Guardian having expressly been given authority to make health care decisions for the incapacitated person.

 Any individual who:

1. Is an adult,

2. Has legal capacity, and, unless he/she is your spouse or adult child, brother, or sister:

3. Is not:

   1. Any of your physicians,

   2. Any of your physician's employees, or

   3. Any of the owners, administrators, or employees of the health care facility where you reside or receive care.

This is really two questions hiding as one:

1. Can you appoint more than one Agent to serve successively (ie, one after another)?  Yes, and it is best to do so.
    

2. Can you appoint more than one Agent to serve simultaneously (ie, at the same time --- jointly)?  Yes, but it is probably not such a good idea to do so, because of the possibility of disagreement between or among the joint Agents.  If, however, you believe it is in your best interests to appoint joint Agents, you should expressly provide in your Durable Power of Attorney for Health Care clear, unambiguous, and objective terms for how medical decisions and other actions are to be made for you if your joint Agents are unable to agree.

An Agent is required to make decisions on the basis of what the Principal would want done. If the Agent does not know, he/she is required to do what he/she thinks is in the Principal's best interest.  The beauty of making a Durable Power of Attorney for Health Care is that the Principal can:

• Not only appoint an Agent,

• But also instruct the Agent specifically about what the Principal wants done and not done.

1. Assertiveness.  The ability to stand up to intimidation and pressure, and to speak up for you without feeling insecure about other people's feelings.
    

2. Intelligence.  Capable of understanding basic issues involved in illness, treatments, and options of medical care.  He/she must clearly understand your wishes.
    

3. Commitment & Loyalty.  Being an Agent can be a tough business; it is not the winning of a popularity contest.  Often an Agent may have to stand apart from your physician, the hospital administration, and even the family to be sure that your wishes will be honored.
    

4. Integrity & Trust.  The Agent may be the "court of last resort" in making sure that your wishes are honored.  You need to know that this person has the ability and character to clearly express your desires, back them up, and stand behind them.
    

5. Tolerance & Flexibility.  Not every "I" is dotted and "T" is crossed in a Durable Power of Attorney.  Medical situations arise where grays invade the blacks and whites.  Your Agents need to be sensitive to the "essence" or the "spirit" of what you want.  Medications and treatments may advance between the time your Durable Power of Attorney is executed and when it needs to be implemented.  Therefore, your Agent has to have the ability to think out and analyze new information that is provided.  He/she may be called on to make decisions that are not completely covered by your Durable Power of Attorney.  The importance of being able to change if circumstances justify it illustrates even more strongly the need for the first four characteristics.

Written by Steve Milam, of the Washington Office of Attorney General and Senior Counsel for the University of Washington Health Sciences and Medical Centers.

A Durable Power of Attorney for Health Care may grant broad decision-making and action-taking powers related to the Principal's health care. These powers may include not only the ability to make medical decisions on behalf of the Principal but also further powers, such as:

• To receive and inspect the Principal's medical records,

• To sign releases, for example, to obtain information about the Principal,

• To authorize the Principal's admission to or discharge from a health care facility,

• To refuse medical treatment for the Principal,

• To employ or discharge medical personnel for the Principal,

• To authorize nontraditional or unconventional treatment for the Principal,

• To make funeral and other arrangements for the Principal, etc.

A written document that:

• Sets forth certain of your desires and instructions,

• Is voluntarily signed by you, and

• Is properly witnessed.

A directive that describes what life sustaining treatment, if any, you wish to receive:

• If you are terminally ill, in an irreversible coma, or brain-dead, and

• Where the application or continuation of life-sustaining treatment would only prolong the moment of your death.

Confusingly, this simple document is known by a wide variety of state-specific names, for example, for the states in the western half of the US:

• Advance Health Care Directive:

  • California Probate Code § 4701,

  • Hawaii Revised Statutes § 327E-2, and

  • New Mexico Statutes § 24-7A-4, all of which combine what Washington law calls a Health Care Directive and a Durable Power of Attorney for Health Care into one document, called an Advance Health Care Directive.

• Advance Directive for Health Care:

  • Oregon Revised Statutes § 127.897.

• Declaration as to Medical Treatment:

  • Colorado Revised Statutes § 15-18-104.

• Declaration Concerning Life-Sustaining Procedures:

  • Wyoming Statutes § 35-22-102.

• Declaration Directing the Withholding or Withdrawal of Life-Sustaining Procedures:

  • Kansas Statutes § 65-28,103.

• Declaration Relating to Use of Life-Prolonging Treatment:

  • North Dakota Code § 23-06.4-03.

• Declaration Relating to Use of Life-Sustaining Procedures:

  • Alaska Statutes § 18.12.101.

• Declaration Relating to the Use of Life-Sustaining Treatment:

  • Montana Statutes § 50-9-103,

  • Nebraska Statutes § 20-404, and

  • Nevada Statutes § 449.600.

• Directive to Physicians and Family or Surrogates:

  • Texas Statutes § 166.033.

• Directive to Physicians and Providers of Medical Services:

  • Utah Code § 75-2-1104.

• Health Care Directive:

  • Revised Code of Washington § 70.122.030.

• Living Will:

  • Arizona Revised Statutes § 36-3262,

  • Idaho Statutes § 39-4504, and

  • Oklahoma Statutes § 63-3101.4.

• Living Will Declaration:

  • South Dakota Statutes § 34-12D-3.

In Washington, the "life-sustaining treatment directive" document is known as a Health Care Directive.  RCW 70.122.030

 Any individual who:

1. Is an adult, and

2. Has the capacity to make health care decisions.

So, for example, the following individuals are unable to make a valid Health Care Directive:

1. A minor, or

2. An individual who lacks personal-decisional making capacity, such as an incapacitated person for whom:

   1. A General Guardian of his/her Person has been appointed, or

   2. A Limited Guardian of his/her Person has been appointed, with that Limited Guardian having expressly been given authority to make health care decisions for the incapacitated person.

In other words, by and large anyone who may make a Durable Power of Attorney.

An original or copy of your Directive must be delivered to your attending physician who is then required by law to make the Directive a part of your medical records retained by that physician.

When either:

• Your attending physician has:

  • Personally examined and

  • Diagnosed you to have a terminal condition; OR
     

• Your attending physician and one other physician have both:

  • Personally examined you and

  • Diagnosed you to be in a permanent unconscious state; AND

That diagnosis has been entered in writing and made a permanent part of your medical records.

1. You have a valid Health Care Directive, AND
2. Your medical condition is such that your Health Care Directive may take effect as described above, AND
3. The application or continuation of life-sustaining treatment would only prolong the moment of your death;

Then:

• Such life-sustaining treatment may (not will; may) be withheld or withdrawn, AND

• Any physician, any health care provider acting under the direction of a physician, and any health care facility and its personnel who participates in good faith in the withholding or withdrawal of life-sustaining treatment from you under the foregoing circumstances is immune from legal liability except for negligence.

No.  Your attending physician is only required to:

1. Make a reasonable effort to determine whether:

   1. Your Health Care Directive complies with the legal requirements (with it being assumed to be in compliance and valid under law);

   2. You are capable of making health care decisions;

   3. You have an authorized representative, eg, your Agent under a Durable Power of Attorney for Health Care, capable of making health care decisions for you if you are incapable of making health care decisions yourself; and

   4. Your Health Care Directive and all actions that your attending physician proposes to take are consistent with your desires; and
       

2. Inform you or your authorized representative of any policy or practice that would preclude the honoring of your Health Care Directive.

After you or your authorized representative are told your Health Care Directive won't be honored, if you or your authorized representative wish to continue to retain the physician or medical facility, the physician or medical facility together with you or your authorized representative are required to prepare a written plan and file it with your Health Care Directive.  The plan is required to describe the physician's or medical facility's intended actions if your medical status changes such that your Health Care Directive becomes operative (ie, your have either a terminal or permanent unconscious condition where the application of life sustaining treatment would only prolong the moment of your death).

So long as they have complied with the foregoing requirements:

• Your attending physician and the medical facility have no obligation to honor your Health Care Directive, and

• They are immune from legal liability (civil or criminal) for failing to honor your Health Care Directive.

Bottom-line: Health Care Directives are not obligatory, only permissive.  They do not in fact "direct" your physician to withhold or withdraw life-sustaining treatment; they only "allow" your physician to do so without the imposition of legal liability.  So long as he/she complies with the foregoing procedural requirements, it is entirely within your physician's discretion whether or not to honor your Health Care Directive.  Consequently:

• If you want your Health Care Directive to be honored, you should discuss your Health Care Directive with your physician before any need arises and obtain his/her assurance that that he/she and his/her medical facility are willing to comply with it.
   

• And if your physician or his/her medical facility is unwilling to comply with your Health Care Directive, and if you want your Health Care Directive to be honored, you will need to find another physician who will assure you that your Health Care Directive will be honored.

A Durable Power of Attorney in which its Principal grants to his/her Agent decision-making and action-taking powers related to the Principal's property and financial affairs.  Being a Durable Power of Attorney, the Agent's authority will survive the Principal's later disability or death.

Yes, to both questions.  Many people prefer to have one Durable Power of Attorney for health care and a separate Durable Power of Attorney for financial decisions, oftentimes with the two Durable Powers having different Agents.

A Trust is an arrangement in which a person (called the "Trustor" or "Grantor") transfers money or property to him/herself or another person (called the "Trustee") who is required to manage the property for the benefit of the Trustor/Grantor or other named persons (called the "Beneficiaries").

Trusts are flexible tools that may be used to accommodate a variety of goals.  For example, a Trust may be created to allow a person to retain control of his/her property while he or she has capacity and to provide for management of the property if he/she becomes incapacitated.

Trusts are complex arrangements, requiring careful consideration and drafting to avoid adverse consequences.  They may be impractical for a person with small assets.  Advice of an attorney specializing in estate planning is essential if someone is considering a Trust.

See: Living Trusts.

A more informal method to provide for another person to have authority to manage one's finances.  Joint Property Arrangements include holding bank or securities accounts or other assets in joint tenancy or entering into a community property agreement with one's spouse.  If a person becomes incapacitated, the joint owner may have the authority necessary to manage the asset without a guardianship.

Like Durable Powers of Attorney, Joint Property Arrangements have many advantages.  They are relatively simple to arrange and less costly than other alternatives, such as Trusts or guardianships.  In contrast to Durable Powers of Attorney, however, use of these devices leaves open the questions of whether the Principal's assets are to be managed in the best interest of only the Principal and whether any current transfer of ownership was intended.

A significant disadvantage in relying on a Joint Property Arrangement is that it can result in an undesired or unintended loss of control over the asset, which can present the potential for financial abuse.  For example, if a person adds a family member's name to a bank or securities account to help manage his/her finances, it may not be clear that the person did not intend to transfer ownership of the account to the family member.  Thus, if the family member spends the funds inappropriately, has creditors, dies, or dissolves a marriage, some or even all of the funds may be treated as belonging to that family member.  A person who transfers an interest in real estate to a family member faces similar risks.

Joint Property Arrangements can also have undesired or unintended estate planning and tax consequences, for example:

• If the joint owner manages assets without knowing and respecting the original owner's estate plan, this can lead to an unintended unequal distribution to the heirs after the original owner's death.
   

• Property a person receives as a gift rather than as an inheritance may have less favorable capital gains tax treatment.
   

• Gift taxes may be a consideration for some individuals. 

Eligibility for public benefits based on financial need (such as Medicaid, 881, and cash assistance for low-income families) can be affected by making a Joint Property Arrangement, for example:

• Benefit eligibility may depend on the amount of assets a person "owns," and thus adding a person as an owner may affect that person's eligibility for some benefits.
   

• Some programs penalize people for "transferring" assets, and adding a person as an owner may be considered such a transfer.

For all these reasons, individualized legal advice is recommended before using a Joint Property Arrangement as a method for giving someone else authority to manage significant assets.

See:

• Joint Tenancies.

• For Married Couples: Community Property Agreements.