(Updated July 2023)
Parents are familiar with guardianships in the context of making wills. When parents have minor children, lawyers encourage them to nominate a guardian who will care for their children if both parents die at the same time. The guardian of a minor manages the minor’s finances and makes the same decisions about the minor’s education and healthcare that a parent would make.
Children are usually less familiar with guardianships for parents. Yet guardianships for adults are not rare. The statistics are fuzzy, but AARP’s best guess in 2013 was that 1.5 million adults are subject to guardianships in the United States. In the absence of reliable data, that estimate remains as good as any.
Role of Guardians
Exact statistics are difficult to compile because states define guardianships and related concepts in different ways. In simple terms, a guardian is someone who has the legal capacity to make decisions about another person’s property, or to make personal decisions concerning that person’s life, or both.
A guardian who manages another person’s finances might be called a financial guardian, a guardian of the estate, or a conservator. A guardian who makes decisions about another person’s physical or personal needs might be called a guardian of the person.
The same person might act as a guardian of the person and of the estate, or those roles could be given to different people. Individuals who can care for themselves physically but can no longer manage their finances might need a guardian of the estate but not a guardian of the person. It is less common for an individual who is capable of managing money to need only a guardian of the person.
Guardianships of the person or estate may be limited or unlimited. A limited guardian might be given the right to make certain kinds of decisions (such as where a person will live) but not other kinds of decisions (such as whether a person can marry).
Legal Standard for Guardianships
Guardians are appointed by a court. State laws typically use terms like “incapacitated,” “disabled,” or “in need of a guardian” to describe adults who are subject to personal guardianships. States generally describe adults in need of a financial guardian as those who are incapable of managing their estate or caring for their property.
State laws often define the kinds of underlying conditions (such as mental incapacity and infirmity) that justify a guardianship. The mere belief that an adult is making poor decisions is not a sufficient justification for a guardianship, as everyone has the right to make their own decisions even if others might disagree with them.
A model law that seeks to protect adults from unnecessary guardianships defines an adult in need of a guardian of the person as one who “lacks the ability to meet essential requirements for physical health, safety, or self-care.” The same law defines an adult in need of a financial guardian as one who “is unable to manage property or financial affairs.” In either case, the inability must be caused by a limitation in the adult’s ability “to receive and evaluate information or make or communicate decisions, even with appropriate supportive services, technological assistance, or supported decision making.”
Most state laws do not allow a judge to appoint a guardian if a less restrictive alternative is available. Most states require a judge to tailor a guardian’s powers to the individual’s specific needs and to give a guardian only those powers that are necessary to meet the individual’s needs.
Risks of Guardianships
Brittney Spears’ conservatorship cast a spotlight on adult guardianships. Since 2008, the pop star had one or more conservators managing her financial affairs as well as one or more personal conservators making decisions about her lifestyle. Whether or not Ms. Spears is correct in asserting that her father abused his role in managing her affairs, her highly publicized case called attention to the potential for exploitation. She persuaded a court to end her conservatorship in November 2021.
A study by the Government Accounting Office discovered $5.4 million in lost assets that were stolen or misappropriated by guardians from 1990 to 2010. Many of the victims were seniors. In some cases, the guardians had criminal backgrounds and should never have been appointed. Unfortunately, the total amount of money stolen from older adults by financial guardians cannot easily be estimated because most court records in guardianship cases are sealed.
Corporate or institutional guardians are not necessarily more honest than individuals. The GAO found that group homes and private agencies acting as guardians caused widespread harm, simply because they controlled the assets of so many people.
Jennifer Wright, a professor at the University of St. Thomas School of Law in Minneapolis who directs the school’s Elder Law Practice Group, told Forbes that increasing numbers of seniors will be vulnerable to theft by guardians as the nation’s population continues to age. Fortunately, she believes that many judges who were lax about appointing guardians are starting to take a more serious look at the need for guardianships and the qualifications of individuals seeking to be appointed as guardians.
Avoiding Guardianship Fraud
Seniors can take steps that might make a guardianship unnecessary. Estate plans should usually include a financial Power of Attorney as well as a healthcare Power of Attorney. Those documents must be executed while an individual is still of sound mind, as must a will and other estate planning documents.
A financial Power of Attorney allows individuals to designate a trusted person who will make financial decisions if they become incapacitated. Individuals who make a Power of Attorney can limit the decisions that their designated decision-maker is authorized to make. Unless and until the individual becomes incapacitated, that authority can be changed, as can the identity of the person who will be responsible for making financial decisions.
A Power of Attorney might make a guardianship unnecessary. There is, of course, the risk that the person to whom the Power of Attorney is given might prove to be untrustworthy. Appointing more than one individual to make decisions and asking other family members to review those decisions will provide some protection against fraud. Asking a lawyer about a Power of Attorney that limits the opportunity to steal from a senior’s estate can be a critical part of estate planning.