The aging process is difficult, not just on us but also on those around us. Most of us will eventually experience physical limitations of one form or another, but what happens when our mind begins to fail us too?
If you are concerned about who will manage your affairs when you are no longer able to, one option is to create a Power of Attorney appointing an agent to act on your behalf. It is extremely important that you choose someone you trust, as the agent pursuant to a document known as a Durable Power of Attorney. This document will give that person, known as your agent, the authority to access your bank accounts and potentially even sell your home right out from under you. If have concerns about giving the agent full access to all your assets and having the ability to do anything and everything on your behalf, you may choose instead to grant the agent more limited access, perhaps to a single account or type of accounts where you could use a limited Power of Attorney. Otherwise, a general Power of Attorney grants them the same authority to access your accounts and sign on your behalf as you.
What authority does a Power of Attorney grant to my agent?
A Power of Attorney grants the agent a broad array of powers. Some of the powers include the ability to deposit and withdraw from your bank accounts, collect any amounts owed to you, access trust funds for your benefit, sue and be sued, buy or sell property, invest, lease and maintain real estate, enter a safe deposit box, borrow money, make gifts, prepare tax returns, and hire professionals, such as lawyers and accountants, etc. Your agent must utilize these powers for your benefit, not their own. The Power of Attorney can be drafted by us as broadly or narrowly as the situation may require and based on the level of comfort of you, the principal, as to the breadth and scope of the powers you are comfortable in granting to your agent. Most often, the typical agent whom the principal (you) appoints tends to be a loved one you trust implicitly, such as a child or spouse.
When is the best time to execute a Power of Attorney?
As the old saying goes, timing is everything. The best time to execute a power of attorney is when you are mentally well, you have no issues concerning your mental capacity. However, we see it all too often where a child contacts us to advise their parent or loved one is or may be suffering from severe dementia, Alzheimer’s, coma, or other cognitive impairment. This may make it impossible to obtain a Power of Attorney, as they will not have the ability to read, understand, and sign the document.
What is a Guardianship?
In a situation where the person is suffering a mental incapacity already, you may now need to apply to the Courts for a Guardianship. There are two forms of Guardianship: 1) Guardianship over the Person; and 2) Guardianship over the Property. A Guardian of the Person makes healthcare decisions and is responsible for the health and well-being of the ward. A Guardian of the Property has access to and manages their income, wealth, and accounts, – basically, handling the person’s finances for him or her. You can, of course, seek a full Guardianship over the Person and the Property which is most common.
A Guardianship is only available if the court first determines that the ward is incapacitated which, in this case, means that they are unable to manage their own affairs. This is most commonly determined by obtaining two medical professional’s opinions concluding the ward is unable to manage their own affairs, with a diagnosis and prognosis. The opinions are usually obtained from treating physicians or psychologists, although any doctor can perform an examination and render an opinion. In some cases, it may be necessary to obtain a statement from another healthcare worker, such as the Director of a nursing home or other facility.
Usually, a family member, such as a spouse or child, will apply for Guardianship over their incapacitated parent. However, a close friend or other person can apply. The court will decide if the applicant is fit to be Guardian and has their ward’s best interests in mind. To assist it with the determination, the court will appoint an independent attorney to represent the incapacitated person for this interim guardianship proceeding. This person is known as the guardian ad-litem. The court-appointed attorney/guardian ad-litem will interview the incapacitated person and the applicant, review all relevant medical records, and speak to collateral contacts, as necessary, in order to then render a report on the ward’s lifestyle and interaction. The court-appointed attorney will also provide an opinion to the Court as to whether the applicant should be appointed Guardian.
Once all of the paperwork is submitted and reports provided to the court, assuming the guardianship application is unopposed, the judge will hold a brief hearing to decide if the applicant should be appointed Guardian. If so, the Guardian will have decision making authority to manage their ward’s affairs, including financial, health and well-being, depending on the type of Guardianship obtained. The posting of a bond may be required by the court, to insure the fidelity of the agent.
How do I hire an attorney to help me manage my elderly parent’s affairs?
The attorneys at Goldstein Law Group have decades of combined experience assisting New Jersey residents with a myriad of elder care issues, including Powers of Attorney and Guardianship proceedings, and we are here to help you. To schedule an appointment to speak to one of our knowledgeable New Jersey elder care and estate planning attorneys, call us at 732-967-6777 and ask for a free consultation. We represent clients in Old Bridge, Monmouth County, and the surrounding area.