It’s an awful thing when you are unable to manage your own affairs. Usually, it happens to the very elderly. Due to senile dementia, Alzheimers, or other diseases, they can not manage their own finances, or make informed decisions about their health care. If you have proper estate planning in place, a durable power of attorney for finances and a designation of health care surrogate for medical decisions (or sometimes, a properly funded revocable living trust), a guardianship will not be necessary.
Guardianships are no fun
If a person does not have proper estate planning and can not make their own decisions, then they will often need a guardianship. Under a guardianship, the court determines that a person is incapacitated, and therefore unable to make their own decisions. The court removes that person’s rights, and appoints a guardian to manage their affairs. The guardian will get full control of the ward’s finances, can determine where the ward lives, and even who the ward gets to interact with. Sometimes the guardian is a relative, but often it is an independent professional. And everyone gets paid. The guardian gets paid. The lawyer for the guardian gets paid. And the court appointed lawyer for the ward gets paid.
And where do they get paid from? The ward’s assets.
That’s why estate planning attorneys so often stress the importance of having these documents in place. Because the alternative can be so invasive and costly.
The Guardian is required to file an annual report and annual accounting with the Court, tracking every penny spent by or for the ward.
Sometimes young people need guardianships too
What spurred this post is a lengthy article in the New York Times on Britney Spears. Eight years ago, when she was suffering from what appeared to be a serious mental breakdown, her father went to court to have a conservatorship (what guardianship is called in California) established over her.Ms. Spears cannot make key decisions, personal or financial, without the approval of her conservators: her father, Jamie Spears, and a lawyer, Andrew M. Wallet. Her most mundane purchases, from a drink at Starbucks to a song on iTunes, are tracked in court documents as part of the plan to safeguard the great fortune she has earned but does not ultimately control. – New York Times, IS BRITNEY SPEARS READY TO STAND ON HER OWN?, <a target=_blank