Elder Law Update – June 2009
Power of Attorney versus GuardianshipQuite often we discover that clients coming to our office do not know the difference between a power of attorney and guardianship. I would like to take the opportunity to explain it to you in very basic terms. What is a Power of Attorney? A power of attorney is a legal document where one person, the principal, gives legal authority to another person, the agent, to perform certain acts on the principal’s behalf. There are financial powers of attorney and then there are powers of attorney related to health care. Your power of attorney can be made very broad in its scope. In many instances people will rely on the Illinois Statutory Short Form Power of Attorney for Property, and also the Illinois Statutory Power of Attorney for Health Care. Contrary to their names these power of attorneys are not that short. Nevertheless, quite often depending on the needs of our clients we even expand these documents to include certain provisions that the standard short form does not provide. It may be a good idea in many circumstances to use the statutory forms because these are easily recognized by health care providers and financial institutions as recognizable forms of power of attorney. You do not have to use the statutory form and can create your own power of attorney as long as it meets the standards of the statute. However, once you depart from the statutory forms you start running the risk that the document that you created may no longer be recognizable or accepted by health care providers or financial institutions. You also have the ability to strike out and reduce the powers that are listed in the statutory forms. Quite often clients don’t want to give all of the powers that the statutory form automatically provides. Finally, with regard to powers of attorney you can make them immediate powersof attorney or what we call springing powers of attorney. An immediate power of attorney takes effect the day you sign it and can remain in effect for as long as you wish. A springing power may only come into effect on the triggering of an event such as a doctors determination of your disability. You could also allow powers of attorney to remain in effect for the remainder of your life often referred to as a durable power of attorney or you can make a power of attorney last for only a short period of time, for example two weeks in order to allow an agent to close a real estate transaction for you. For estate planning and long-term care planning a durable power of attorney is obviously more effective. What is Guardianship? Guardianship is a court established legal relationship whereby the Guardianship Court appoints a person, the guardian who is determined to be the guardian to make personal and financial decisions for someone who cannot make these decisions on their own (the ward). In Illinois we have several forms of guardianship but the most common is considered to be guardianship of the person for personal decisions regarding personal care and living arrangements. The second type of guardianship is guardianship of the estate, wherein the guardian has control over the assets of the ward. Quite often a family member or interested person may initiate the guardianship proceeding by filing a Petition in the Guardianship Court in the county where the ward resides. The opinion of a doctor is necessary to establish the disability of the individual. If the ward is properly served and examined by a guardian ad litem (a court appointed lawyer acting as the eyes and ears of the judge) then the court may appoint a guardian to make decisions in either the personal area or the financial area or both. The power that a guardian has is closely scrutinized by the court and before a guardian can take any actions other than routine day to day matters, a court order must be obtained. A guardian is also required to report at least annually to the court on the status of the wards personal condition and the status of the wards income and assets. Conclusion For Long-Term Care Planning purposes we like to have powers of attorney in place so guardianship can be avoided. Guardianship will have substantial costs associated with it. However, in many cases either because the power of attorney is inadequate or non-existent, guardianship is often obtained in order to further advance the benefits to the ward. This is another example of the need for proper planning so that you have the opportunity to avoid a costly guardianship proceeding and instead rely on your self appointed agent under powers of attorney to act the way you instruct them to act in event of your disability. If you have any questions do not hesitate to contact us below. Forward your questions as follows: Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 563-4887 FAX (847) 292-1221 Website: https://abferrarolaw.com/ Email: email@example.com P.S. Also, don’t miss our workshop: “The Elder Care Journey – How to Get Benefits Coverage for your Nursing Home Care…Without Selling your Home or Leaving your Family Without a Dime” set for the following dates. Please contact our office at (847) 563-4887 to register. September 10, 2009 at 4:00 PM September 24, 2009 at 6:30 PM Call (847) 292 1220 to make a reservation in our training room. – You don’t want to miss this workshop!
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“Educate to Motivate”Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 563-4887 FAX (847) 292-1221 Website: https://abferrarolaw.com/ Email: firstname.lastname@example.org NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine. If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service. The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material. If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email. In the subject line, please write your name and the word “unsubscribe.” If you are responding on someone else’s behalf, please also include the email address that our message was sent to. Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice. You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.