One of the most difficult truths is realizing that our parents will grow older and possibly develop Alzheimer’s, dementia or any other number of disabilities that renders them unable to make decisions for themselves and their finances. When that happens, a family will typically come together to determine what’s best. Guardianships are usually the preferred protections.
Incapacity Planning and Guardianship
Incapacity planning is a particular area of Vermont law designed to protect those who are unable to care for themselves, whether it’s due to a sickness, accident, dementia or anything else that meets the legal definition of “incapacitated”. Depending on the type of care that’s needed, a guardianship also provides specifics for daily activities such as grocery shopping, but it also allows the guardian to make bigger decisions on a person’s behalf, including the sale of property or other assets.
In Vermont, the probate judge appoints the guardian and then designates those specifics mentioned above. Ideally, the guardian will also “promote the independence of and protect the best interests of the Ward (person under guardianship)”.
There are three types of guardianships that Vermont law allows –
- Guardianship of a Minor
- Guardianship of a Mentally Disabled Adult, and
- Voluntary Guardianship
In some instances, another type of Guardianship called a Special Service Guardian, is put in place for adults with developmental disabilities.
Additionally, there are alternatives that can be used in lieu of guardianships. Creating a power of attorney is one of those options as is setting up a trust.
A guardianship requires an annual review. The ward, which is the one under the guardianship, as well as the ward’s attorney, if he has one, receives a notice that tells him of his rights. He may petition the court to terminate the guardianship altogether or he may request it be modified. Those involved, including the guardian, will receive notice and a judge will review the case and make any necessary adjustments.
Also, as part of this annual review, if the guardian was put in charge of any financial decisions, he must provide an accounting to the courts. He must also ensure his personal funds aren’t co-mingled with the ward’s assets.
Direct deposit and electronic bank transfers can be invaluable for guardians who want to establish recurring monthly payments to creditors. This is both a time saver and convenient in that a bank printout can be used to account for expenditures during the annual review. Further, withdrawal limits can be placed on the account and in some instances, a joint signature account can offer even more protections. A joint signature requires more than one signature on the ward’s checks.
Remember, too, that advance directives can be put in place by those who are not incapacitated but who want to plan for the future. This provides an opportunity to make those decisions now versus someone else later making the decisions on who will handle medical decisions. The guardian can even be named in the directive. Powers of attorney can serve the same purpose, but with financial decisions. It remains in place should the person become incapacitated at a later time.
If you feel a loved one will soon need incapacity planning or if you simply want to protect your own assets, speaking with a qualified estate planning lawyer can help you through the process to ensure you’re protected.