I had some clients come in recently in need of a guardianship for a family member. The family member was a retired professional. He had all the right tools in place to avoid a guardianship — durable power of attorney, health care surrogate, and revocable living trust. So why did he need a guardianship? Because he was suffering from dementia and refused to cooperate with his family in making rational decisions that were in his own best interests. Unfortunately, it seems to me that dementia often magnifies the worst personality aspects of some people. When you combine a cantankerous, domineering personality with paranoia and delusion, it makes for a difficult situation.
A durable power of attorney lets you manage the person’s property, but not the person. Sometimes I hear people say, “I’ve got power of attorney over my Aunt Ethel.” No they don’t. They have a power of attorney that allows them to deal with Aunt Ethel’s property. A revocable living trust also allows the management of property but not of a person. In the narrow area of health care and treatment decisions, a health care surrogate or medical power of attorney does give some control over the person assuming that third parties agree and cooperate. Therein lies the rub. Without an adjudication of incapacity, third parties my be reluctant to accept the authority of the attorney-in-fact or surrogate. This is especially true if the incapacitated person insists that he or she is not incapacitated. The presumption is that people are competent unless declared incompetent.
Sometimes the alleged incapacitated person has lucid moments or is able to “fake it” for significant periods of time. This makes third parties even more leery of accepting instructions solely from the attorney-in-fact or surrogate. Third parties who do not spend a lot of time with the incapacitated person are the most easily deceived. Thus, you can plan and have all the right tools and still not avoid a guardianship. The good news is that although you may not avoid a guardianship of the person, you may still avoid a guardianship of the property if you have a properly funded living trust in place.
I recently had conversations with a couple of lawyers who also practice probate litigation. We agreed that probate litigation is often the result of poor communication. Specifically, parents tell their children what the children want to hear or use ambiguous phrases like “don’t worry you’ll be taken care of.” The same goes for other relatives and friends who might be expected to be remembered by you with money or assets when you pass away.
Here is one example of muddled communications — A decedent’s nieces and nephews sued their aunt’s beneficiaries claiming undue influence. The nieces and nephews said their aunt called the beneficiaries the “cleaning lady” and “the lawnman.” The beneficiaries said the decedent disliked her nieces and nephews, but the nieces and nephews swore the aunt loved them and promised to “take care of them” when she died. I believe both sides were telling the truth. The decedent had a prickly, cranky, insecure personality and had told each side what they wanted to hear and whatever made her feel important. Coupled with the fact that she waited to do her estate planning until she was on the way to the hospital where she died, it was a perfect recipe for a lawsuit.
Children often overestimate the wealth of their parents when they don’t know what their parents actually own. They may not realize that dad obsesses over MSNBC and Bloomberg because he enjoys it and that $100,000.00 in 10 or 20 stocks is all he has. They think he’s obsessively monitoring his millions. A phrase like “don’t worry I’ll take care of you” is ambiguous enough to cause problems. For the parent it may mean, “I’m leaving you $10,000.00,” but for the kids it may mean. “Don’t worry I’ll make sure you’re set for life.”
Here are some tips to make sure your legacy to your heirs and beneficiaries isn’t a lawsuit:
Be clear. Make sure that your children and other beneficiaries know what to expect from you at your death.
Don’t just tell people what they want to hear. You don’t have to tell people you hate them, but you shouldn’t misrepresent your relationships with others either/
Don’t wait until the last possible moment to meet with a lawyer and plan your estate.
Don’t wait until you’re incapable of making your appointments and arrangements to visit a lawyer before planning your estate.
If you remarry and have children from a previous marriage, get a prenuptial. If you later decide to ignore or revoke the prenuptial, do so in writing.
Don’t share your estate plan with someone or promise to “take care of them” and then set up all of your accounts and beneficiary designations so they pass outside of the estate plan that leaves everything to someone else.
Don’t make misleading or false promises to people you don’t intend to “take care of” in your estate plan.
This list is far from comprehensive. The bottom line is to be honest with yourself and others. Do what you can to not make misleading statements or promises or to give false hopes or expectations. You may save your heirs and beneficiaries a lot of headaches.
This is probably the most frequently asked question for any estate-planning attorney.Anyone with any property at all, whether real or personal, or with children ought to have a will.Even a person who has nothing may be instantly worth a large sum of money at death, if they are killed through someone else’s negligence or are well insured.For a divorced person with minor children, a will eliminates arguments over who will manage any assets or money left to the children (e.g., an ex-spouse).If you do not have a will, then the state decides who gets your property.In addition, the court will decide who will be your Personal Representative and it may be necessary for that Personal Representative to obtain a bond at the expense of the estate. If you prepare a will, then you can direct that the bond be waived.