Guardianship and Advanced Care Directives

BARRY: Number two, I kind of think we talked about already. Guardianship and advance care directives. A guardian is a person who’s in charge of you. They can make decisions, sign contracts, control who you see. They can even control which of your three kids you see. They could be one of your kids. They could be the bad kid in that example before. Imagine that. Imagine how the bad kid can turn into an angel all of the sudden in the courtroom and end up appointed because it’s more convenient.

CHAD: In terms of guardianship, at what point– Because obviously, if someone is in a coma, clearly a guardian needs to come in. But what if the person is alive, they talk, but there’s some issues. Who determines when a guardian is allowed to start making decisions for them?

BARRY: It’s a process. Someone has to file a petition. You have to be evaluated by multiple doctors. There’s a laundry list of rights and powers that you either keep or lose. And the guardian receives the rights you lose. Once a guardianship is appointed, there’s a court order. Just like probate, you wave the court order and people listen because they have to. It’s a legal obligation. This person now has control.

And, you know, guardianship has its benefits in certain circumstances. But in lieu of a guardian, you can put advance care directives in place—things like a power of attorney, a health care surrogate, and a living will. And it’s like a substitute. Just like a trust is a substitute for probate, these documents are substitutes for guardianship. And advance care directives are usually part of a basic estate plan, right? You see them all the time.

CHAD: Absolutely. And I encourage every client to have them. But you mentioned a few there. Power of Attorney, Living Will, Healthcare Surrogate. Can you briefly explain what each one does?

BARRY: Yeah. A power of attorney appoints someone called your agent (formerly known as an attorney-in-fact) that can be a person or a business — to act on your behalf. As if they’re you and for your benefit. They have a fiduciary duty. I mentioned that word before in the context of the executor or personal representative. That just means that they have an elevated standard of care to put your needs ahead of their own. Or they can be held liable for either not doing that or being negligent to not do that. It’s an elevated standard of care.

This person has power over things like finances, banking, insurance, legal, taxes. I always joke about Comcast in meetings to lighten it up. Nobody laughs. But try calling Comcast to fix someone else’s account without one of these documents. You won’t get very far. One judge I know referred to powers of attorney as “weapons of mass destruction” because, as you can expect, going back to the good kid, bad kid, medium kid, in the wrong hands they can be quite devastating and destructive because third parties really do have to rely on them. They have to honor them. There’s exceptions, but that’s kind of the rule.

CHAD: Let’s assume someone has two good kids–

BARRY: Doesn’t happen.

CHAD: Very true. But can they have co-power of attorneys?

BARRY: Good question. Yes, you can do co. You can do three. You can require them to act together, by majority, or independently. You can change that in the document if you want. We give a lot of practical advice when it comes to these documents because some institutions are very fickle when it comes to how these documents are written and interpreted. There could be problems with how people do it instinctively, so we do provide some value there, but yeah, you can do that.

A health care surrogate is essentially a medical power of attorney. It allows someone to participate and make medical decisions on behalf of someone else as their surrogate. Typically it’s for if you’re unconscious or unable to communicate and can’t decide what treatment to take up in your case. Someone else is going to have to make the decision. And you can either decide, as I mentioned earlier, or the court will decide for you. And in the case of a surrogate, the law recently changed in a good way. Now, it allows you to appoint somebody who can participate now while you still have capacity. While you’re still in control of yourself. They’re just involved and have access to records, which can be incredibly helpful.

CHAD: For people who already had health care surrogates created, who already did some estate planning, do they need to update them because of that law change?

BARRY: No. Just like an old will or power of attorney, it’s still valid. But you should update it. Because courts can be a pain in the ass. Laws change, and outdated documents often cause problems. A living will doesn’t appoint anyone, though I’ve seen them appoint people. The thing about Terri Schiavo in the ’90s, her husband and family fought over whether to keep her on a machine because she was in a persistent vegetative state. Four years they fought, who knows how much money they spent. But ultimately the husband won and they pulled the plug. She could have been avoided all of that with a 2-page doc that said I do not want to be kept on a machine in the event i’m in a persistent vegetative state or terminal illness. And two doctors say that there’s no reasonable way to recover. Only then do they take you off the machine. It’s not like you go in there stubbing your toe. These three documents are relatively simple, but they have a massive impact during your lifetime. Once you pass away, they essentially become useless pieces of paper. I think I answered that question pretty well, right? You’re happy with it?

CHAD: Absolutely.