1. Guardianship and Power of Attorney: The Myths and the Facts
Pennsylvania State Long Term Care Ombudsman Conference
April 24, 2012

2. Power of attorney
Written document in which a person (the “principal”) gives another person (the “agent”) the authority to act for the principal according to the terms and conditions specified in the document.
Governed by statutory law in Probate, Estates and Fiduciaries Code at 20 Pa.C.S. § 5601 et seq.

3. Powers of attorney, cont.
What the agent is given authority to do is listed in the document (may be broad or specific).
2 Kinds: Financial POA (which often includes power to admit to facility, enter into agreement for care and authorize medical and surgical procedures) and Health Care POA
Need not be witnessed (unless signed by mark or by another person at direction of principal) or notarized, but it’s a good idea.

4. Power of attorney, cont.
Requirement of notice, which must be signed by principal:
NOTICE
THE PURPOSE OF THIS POWER OF ATTORNEY IS TO GIVE THE PERSON YOU DESIGNATE (YOUR “AGENT”) BROAD POWERS TO HANDLE YOUR PROPERTY, WHICH MAY INCLUDE POWERS TO SELL OR OTHERWISE DISPOSE OF NY REAL OR PERSONAL PROPERTY WITHOUT ADVANCE NOTICE TO YOU OR APPROVAL BY YOU….

5. POAs, cont.
Lack of notice doesn’t invalidate POA, but gives agent the burden of demonstrating his/her exercise of the authority is proper if there’s a challenge.
Acknowledgment Requirement: POA not valid unless agent has signed and attached acknowledgment that they will act for benefit of principal, keep assets separate, exercise reasonable prudence.

6. POAs, cont.
Principal must have adequate intellectual capacity at time POA is signed in order for it to be valid.
Dementia diagnosis alone doesn’t mean principal lacks capacity.
More capacity needed for more complicated transactions than for less complicated.
Law not clear on exact level of capacity required to execute POA, but case law suggests rule is whether principal had general understanding of what they were doing (may be higher depending on type of authority being granted, especially gifting).

7. POAs, cont. Who determines whether principal has capacity?
Ethical duty of attorney to identify who client is and consider capacity of client
Psych evaluation
May be challenged in Orphans’ Court – burden is on challenger to show lack of capacity by clear and convincing evidence.

8. When Does Power of Attorney Take Effect?
Depends on terms of document:
Financial POAs frequently take effect upon signing but often are not used until needed.
May be “springing” (goes into effect upon trigger event, usually when attending physician determines principal lacks capacity).
Health care POAs are frequently springing.

9. POA revocation Principal may revoke power of attorney
No particular form of revocation required by law, but wise to put it in writing.
Revocation should be sent by certified mail to agent and third parties who may be relying on POA, and should record it if POA was recorded.

10. POA - remedies for abuse
Agent is required to keep full and accurate record of all actions, receipts and disbursements.
Principal or guardian can request Orphans Court to require accounting.
OAPS may seek court-ordered access to agent’s records if agent does not provide and records are necessary to complete investigation, assessment or service plan, or delivery of needed services to prevent further abuse, neglect, exploitation or abandonment.

11. Guardianship
A guardian is a person who is given the legal power and duty by a court to take care of and manage the property and rights of another person who, due to incapacity, is considered unable to manage their own affairs.
Courts are directed by law to use least restrictive alternative in ensuring needs of incapacitated persons are met.

12. Guardian of person/estate
Guardian of person – responsible for decisions re health care, living arrangements, custody, general maintenance, training, education, services, social and vocational opportunities, assisting in development of maximum independence
Guardian of estate - finances

13. Incapacitated Person
Definition of an incapacitated person is an adult whose ability to receive and evaluate information effectively and communicate decisions in any way is impaired to such a significant extent that he is partially or totally unable to manage his financial resources or to meet essential requirements for his physical health and safety.

14. Court determinations
Nature of conditions impairing capacity to make and communicate decisions;
Extent of individual’s capacity to make and communicate decisions;
Need for guardianship services in light of availability of family, friends and other supports to assist the individual in making decisions and in light of existence of any POA or trust.

15. In re Peery, 727 A.2d 539
PA Supreme Court held that intellectually disabled woman was not in need of guardian, despite dependence on others, because she had caregivers and supports (a “circle of support”) that assisted her in meeting the essential requirements for health and safety and managing financial resources.

16. Court must also determine
Plenary or limited guardian?
Of person or estate
Court is required to prefer limited guardianship
Except in specific areas guardian is given authority, the partially incapacitated person retains all other legal rights.
Duration of guardianship

17. Legal Procedure Petition
Filed in Orphan’s Court
May be filed by any party interested in the alleged incapacitated person’s (AIP’s) welfare.
Must contain description of functional limitations and physical and mental condition of AIP, reasons why guardianship is sought, steps taken to find less restrictive alternatives, name and qualifications of proposed guardian.

18. Legal procedures, cont.
Written notice must be served on AIP at least 20 days before hearing date.
Must also be explained to AIP “to the maximum extent possible in language and terms the individual is most likely to understand.”
Service also required on relatives who would be heirs.

19. Right to counsel
AIP has the right to be represented at the hearing (if he has an attorney).
If not, AIP may request the appointment of counsel and court shall appoint counsel “if the court deems it appropriate”.
Appointed counsel can be paid by county/state if AIP cannot afford.
Petitioner must notify court at least 7 days prior to hearing if counsel has not been retained for AIP.
AIP has right to request independent evaluation.

20. Hearing AIP must be present at hearing unless:
Physician or licensed psychologist testifies that attendance would harm AIP’s physical or mental condition or
AIP absent from the Commonwealth.
Burden is on petitioner to prove incapacity
Petitioner must present testimony from individuals qualified to evaluate the type of incapacity alleged (usually psychiatrist or licensed psychologist).

21. Effect of guardianship
Person adjudicated totally incapacitated loses most rights, including ability to:
Enter into a contract
Make gifts
Accept/reject medical treatment
Decide where to live
Manage financial affairs

22. POA vs. Guardianship
POA appropriate (and guardianship is not) if individual has capacity.
POA does not involve loss of rights, autonomy.
Allows individual to exercise control by planning in advance, and avoids expense and burdensomeness of court involvement.
Guardianship is necessary if individual lacks capacity (and needs a decision-maker).
Note that many medical decisions can be made by relatives under Act 169 and that simple finances can often be handled via joint bank accounts and SSA representative payee status.

23. Post-adjudication duties of guardian
Guardian has the duty to assert the rights and best interests of incapacitated person (IP).
PA law not specific, but should include:
See if IP has outstanding health needs and address
Evaluate living arrangements for appropriateness and safety
Determine existence of funeral/burial arrangements and make them if none exist.

24. Duties of guardian (cont.)
Gather info on and gather/protect assets, gather info on debts.
Obtain all benefits to which IP is entitled (MA, Medicare, SS, SSI, VA, etc.) and become rep payee if appropriate.
Set up separate bank account for IP.
Set up written record keeping system to track all assets, income, expenses and other financial affairs of IP.
No commingling IP’s assets with guardian’s.

25. Duties of guardian, cont.
File annual report with Court (and final report upon IP’s death).
Each county has form.
Includes current principal, income, expenditures, needs of IP, housing arrangement, number and length of visits to IP, guardian’s opinion whether guardianship should continue.
Are reports reviewed?
Visit Incapacitated Person – state law doesn’t say how often. Best practice would be monthly or at least quarterly.
Care planning conferences in nursing facilities.

26. Legal options if IP appears to have capacity
Guardianships not normally reviewed without request (although court may set date for review hearing in its order establishing the guardianship).
Can’t revoke a guardianship like a POA.

27. Legal options, cont.
Petition court for review: court shall conduct review hearing promptly if IP, guardian or any interested party petitions the court for a hearing for reason of:
significant change in capacity,
significant change in need for guardianship services,
or the guardian’s failure to perform his duties in accordance with the law or to act in the best interest of the IP.
Burden is on the person advocating to continue the guardianship.
Can request independent evaluation.

28. Legal Help Each AAA required to fund OAA-funded legal services.
PLAN legal services programs:
Local bar association for referrals to private attorneys
Request that court appoint counsel

29. Contact information
Pamela Walz, Esq.
Co-Director, Aging and Disabilities Unit
Community Legal Services, Inc.
3638 N. Broad Street.
Philadelphia, PA 19140