How Can Advance Directives and Powers of Attorney Help You Avoid Guardianship?

Most people know that estate planning allows you to determine how assets will be distributed after death, but they often fail to recognize that one of the most important benefits of estate planning involves protecting yourself during your lifetime if you become incapacitated. In fact, incapacity planning can be more immediately important than inheritance planning because the consequences directly affect your healthcare, finances, independence, and quality of life while you are still alive. If incapacity strikes without an incapacity plan in place, family members frequently discover they lack the legal authority necessary to manage even basic matters on your behalf. Financial institutions may refuse to allow access to accounts, healthcare providers may be unable to disclose medical information, and critical decisions regarding treatment or finances may require court involvement. Ultimately, your loved ones may be forced to pursue guardianship proceedings simply to obtain the authority needed to help manage your affairs. The attorneys at Unsworth LaPlante, PLLC explain how incorporating advance directives and Powers of Attorney into your estate plan before incapacity occurs can help you avoid guardianship.

What Is Guardianship?

While guardianship can provide important protection in appropriate circumstances, it is also a court-supervised process that can become time-consuming, expensive, and emotionally difficult for everyone involved. To understand how incapacity planning helps avoid guardianship, it first helps to understand what guardianship involves in Vermont.

Under Vermont law, guardianship is a legal arrangement in which the Probate Division appoints another individual to make decisions for a person who is unable to manage personal, medical, or financial matters independently. The individual subject to the guardianship is commonly referred to as the “principal,” while the appointed decision-maker is known as the “guardian.” Guardianship proceedings are generally initiated when an individual becomes incapacitated without adequate legal planning documents already in place.

In practical terms, guardianship transfers a significant degree of personal autonomy from the incapacitated individual to a court-appointed decision-maker. Although the court attempts to appoint an appropriate person, the process necessarily involves judicial oversight and procedural requirements that many families would prefer to avoid if possible.

Why Can Guardianship Become Complicated?

Guardianship proceedings serve an important legal purpose because vulnerable individuals sometimes require protection when they can no longer safely manage their own affairs. At the same time, the process can create serious complications for everyone involved in the process. To establish guardianship in Vermont, the court requires evidence demonstrating that the prospective principal lacks sufficient capacity to make informed decisions independently. This process may involve medical evaluations, court hearings, attorney involvement, testimony from family members, and judicial review of evidence regarding the person’s functional limitations. The process of proving incapacity often occurs during a period of emotional stress when families are already coping with serious illness or cognitive decline. Along with adding to an already significant emotional burden, guardianship proceedings can be costly. Furthermore, family disagreements are common when guardianship is being contemplated, further complicating an already difficult time. Relatives sometimes disagree regarding who should serve as guardian, how finances should be managed, or what medical decisions should be made. Those disputes can increase both the duration and expense of the proceedings while creating lasting tension among family members.

What Is a Power of Attorney?

A Power of Attorney (POA) is a legal document through which you authorize another individual to act on your behalf in legal matters or transactions. The individual creating the document is known as the “Principal”, while the person receiving authority is referred to as the “Agent” or “Attorney-in-Fact”. The extent of the authority granted to your Agent will depend on whether you create a general or limited POA.

What Makes a Power of Attorney “Durable?”

In the context of incapacity planning, making your POA durable is crucial because, unlike a traditional POA, a Durable Power of Attorney survives the incapacity of the Principal. Without durability language, the authority granted under the document may terminate precisely when it becomes most necessary. This distinction is critical because the primary purpose of incapacity planning is to ensure continuity in decision-making if you lose the ability to manage matters independently. A properly drafted durable power of attorney may authorize your agent to do things such as:

• Access bank accounts
• Pay bills
• Manage investments
• Handle insurance matters
• File tax returns
• Buy or sell property
• Operate a business
• Apply for government benefits
• Coordinate long-term care arrangements

Because the authority granted can be extensive, selecting the appropriate agent requires careful consideration. You should choose someone who is trustworthy, financially responsible, organized, and capable of acting prudently under stressful circumstances.

How Does a Power of Attorney Help Avoid Guardianship?

One of the primary reasons guardianship becomes necessary is because no one possesses the requisite legal authority to handle financial matters after incapacity occurs. For example, if you suffer a stroke and become unable to communicate, your spouse or adult children may assume they can automatically manage your accounts and property; however, financial institutions frequently refuse to allow access without formal legal authority. When a Durable Power of Attorney already exists, your designated Agent can generally step into that role immediately according to the terms of the POA. Because legal authority has already been established voluntarily in advance, court intervention should be unnecessary.

What Is an Advance Healthcare Directive?

Although a general POA can grant your Agent considerable legal authority to act on your behalf, it cannot give your Agent the authority to make medical decisions. Fortunately, advance healthcare directives can help you address medical decision-making now which helps avoid guardianship down the road. Vermont law allows individuals to create advance directives that both appoint a healthcare decision-maker and provide instructions regarding future medical care.

An Appointment of Health Care Agent is effectively a medical POA which allows you to designate a healthcare agent who may communicate with healthcare providers and make medical decisions if you become unable to make or communicate those decisions because you are incapacitated.

 Planning Ahead with Advance Directives

How Can an Advance Directive Help Prevent Guardianship?

Healthcare decision-making often becomes one of the most immediate concerns during incapacity and without advance directives, family members may lack authority to make treatment decisions or access necessary medical information. This can be a particularly problematic issue if relatives disagree regarding care decisions or if healthcare providers remain uncertain regarding who possesses decision-making authority. When you execute valid advance directives, you establish that authority in advance by naming your Agent directly, ensuring that they have the legal authority to act if needed, making court-appointed guardianship unnecessary. In addition to avoiding procedural delays, advance directives help preserve your personal autonomy because you decide in advance who will make decisions and what preferences should guide those decisions.

Why Are HIPAA Authorizations Important?

Even close family members may encounter obstacles when attempting to obtain medical information because of federal healthcare privacy laws under the Health Insurance Portability and Accountability Act (HIPAA). Without proper authorization, healthcare providers may limit the information they can disclose regarding your condition or treatment.

A HIPAA authorization allows designated individuals to access protected medical information and communicate with healthcare providers. While this document does not grant decision-making authority on its own, it often works alongside advance directives and Healthcare Powers of Attorney to facilitate communication during periods of incapacity.

Can We Help You Create Advance Directives and Powers of Attorney to Avoid Guardianship?

For more information, please attend one of our upcoming FREE webinars. If you would like help with advance directives and Powers of Attorney to avoid guardianship, contact an experienced Essex Junction estate planning attorney at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.