It is an unfortunate fact of life that, as we age, our cognitive powers often decline. For many of us, there may be a point when we become unable to manage our own affairs - when we cannot keep regular medical appointments, maintain our homes or manage our finances. To assist people as they reach this stage in their lives, states provide a mechanism - guardianship - by which a person’s friends and family may petition a court to declare him or her incapacitated and for the court to appoint a guardian to manage his or her affairs. 

While the guardianship process is meant to assist people in cognitive decline, it also exposes them to considerable risk. A court-appointed guardian - who may be someone you have never met — will, in most cases, be granted sweeping powers to manage your affairs, including your finances, your healthcare, who can visit you and when, whether you can enter into business transactions, and even whether you can marry. A 2017 American Bar Association report described guardianship as “one of society’s most drastic interventions in which fundamental rights are transferred to a surrogate, leaving an individual without choice and self-determination.”

Moreover, there have been reports across the nation of guardians committing fraud and, in some cases, physically abusing or neglecting the very people they are charged with protecting. As the Government Accountability Office explained in a 2010 study of guardianships nationwide:

GAO identified hundreds of allegations of physical abuse, neglect and financial exploitation by guardians in 45 states and the District of Columbia between 1990 and 2010. In 20 selected closed cases, GAO found that guardians stole or otherwise improperly obtained $5.4 million in assets from 158 incapacitated victims, many of whom were seniors. In some instances, guardians also physically neglected and abused their victims.

More recently, the New Yorker published a profile of guardianship abuse in one Nevada county in Nevada. It described guardians taking seniors from their home with no warning, ostracizing them from family and selling their belongings. So far, one former guardian has been indicted.

Below we explain the basic elements of incapacity and guardianship, point out some of the central risks, and identify steps that you and your family can take to minimize those risks.          

Why may someone petition a court to declare you incapacitated?

There are a number of reasons a person may petition a court to declare you incapacitated, ranging from genuine concern for your welfare to self-interest about their inheritance. We catalog some of these reasons below:

-- Genuine concern by friends and family members; 

-- Family or friends are genuinely concerned that you can no longer manage your affairs and that your health or finances may be at serious risk; 

-- Conflict with a friend or family member: A friend or family member with whom you have had a recent disagreement fears that you will reduce or eliminate his or her inheritance. Accordingly, he or she may seek to lock in your current estate plan by having a court declare you incapacitated, thus rendering you unable to change your estate plan going forward.  

Conflict among friends or family members:

-- A friend or family member - even someone with whom you are close - may fear that others are lobbying you for an outsize inheritance, which may reduce his or her own inheritance. Accordingly, just like the person who fears the impact of a recent disagreement or falling-out, he or she may seek to lock in your current estate plan by having a court declare you incapacitated, preventing you from revising your estate plan going forward.  

-- A new relationship: You may begin a romantic relationship late in life, or even a close friendship, and those close to you fear that your new partner or friend may influence you to revise your estate plan, diminishing their inheritance. They may, in turn, seek to have you declared incapacitated to prevent you from marrying that person or otherwise diverting what they believe should be their inheritance.

-- As a litigation strategy: A friend or family member in any of the categories above may see a petition for an incapacity proceeding as an opportunity to jump-start what will ultimately become a will contest or other dispute over your estate.

What happens when someone petitions to have you declared incapacitated?

The laws governing guardianship procedures differ from state to state. In this article, we focus on Florida, which is home to a large senior population and is a leader in fashioning guardianship law. In Florida , when a person petitions to have someone declared incapacitated, the court orders a committee to be formed that includes at least one psychiatrist or other physician, and two psychologists, gerontologists, nurse practitioners, or others with specific training in addressing physical and cognitive decline.

The committee conducts a physical, mental and functional assessment of the allegedly incapacitated person . If a majority of the committee determines that the AIP is indeed incapacitated, the court holds a hearing on whether to adopt the committee’s determination. At the hearing the court reviews the committee’s report, takes testimony from interested persons , and makes a final determination on whether to declare the AIP incapacitated.

What happens if the court declares you incapacitated?

When an AIP is found to be incapacitated, the court appoints a plenary guardian to oversee virtually all aspects of the person’s life.  As noted above, this includes financial decisions, medical decisions, decisions regarding where he or she will live, who can visit and when, and even whether he or she can marry. As a leading Florida news outlet recently explained: “The power of these guardians is near absolute. They have influence over the simplest decisions, from buying groceries to choosing a doctor.” Indeed a person under the care of a guardian is referred to in court documents as the “ward.”

What are the risks?
The prospect that a court-appointed guardian - especially someone other than a trusted loved one - could gain sweeping control over your life presents a significant risk to you and your estate. These risks include the following:

1. Financial consequences
The guardian’s fees are paid from the ward’s assets and are typically billed by the hour. Guardians may charge for everything from time spent opening mail, to arranging medical visits, to meeting with financial planners. Judges are, in theory, required to scrutinize the guardians’ bills, but their caseloads often make this impossible in practice. 

Moreover, and crucially, if the ward’s family or friends challenge any aspect of the guardianship - from the court’s decision to select one guardian versus another, to the guardian’s financial decisions, to his or her healthcare decisions - the guardian is entitled to hire an attorney and pay the attorney’s fees from the ward’s assets. As lawyers generally bill per hour, these costs can escalate quickly and dramatically.

There have been reports of collusion among guardians, attorneys, and even judges to permit the accrual of massive fees, draining the estates of incapacitated wards. As the Wall Street Journal noted, “guardianship systems across the country are plagued by allegations of financial exploitation and abuse, despite waves of overhaul efforts. As a result, critics say, many elderly people with significant assets become ensnared in a system that seems mainly to succeed at generating billings.” 

In addition to massive fees, there have been reports around the nation of guardians who commit outright fraud or other financial wrongdoing. In particular, the 2010 GAO study referenced above included reports of guardians who take advantage of their wards by draining their accounts outright or, in one case, by selling the ward’s properties below market to their associates who then resold them at a profit.      

2. Consequences for healthcare
Absent a clear and enforceable advance healthcare directive, it is the court-appointed guardian, not your loved one, who may end up making decisions on your healthcare - including which doctors you see and, ultimately, end-of-life decisions. This can have a significant effect on the quality of your healthcare and your quality of life as your mental and physical capacity ebbs. 

3. Consequences for quality of life
 guardian’s authority extends to the most intimate aspects of your life. If you are not able to make those decisions for yourself, you would likely want a loved one - not a court-appointed guardian - to make them for you. More ominously, as the GAO study and other reports around the nation have noted, there are cases in which guardians have neglected or even physically abused their wards. Underscoring this concern, the screening process to determine who may become a court-appointed guardian is often negligible, with many states requiring only that a guardian attend a course and submit to a criminal background check . Again, this is for a person who will be granted sweeping powers over you finances, healthcare and personal freedom.

Footnotes for this part of the white paper

1.  https://www.americanbar.org/content/dam/aba/administrative/law_aging/restoration%20report.authcheckdam.pdf
2.  http://www.gao.gov/new.items/d101046.pdf.  This was followed up by a 2016 study addressing elder abuse by guardians.  The GAO identified eight additional closed cases of elder abuse from public records searches, beyond the cases in the 2010 report, all consisting of financial exploitation by guardians.  https://www.gao.gov/assets/690/681088.pdf
3.  https://www.newyorker.com/magazine/2017/10/09/how-the-elderly-lose-their-rights
4.  A chart listing the statutes that regulate guardianships in all 50 states can be found here: http://www.americanbar.org/content/dam/aba/administrative/law_aging/2014_AdultGuardianshipStatutoryTableofAuthorities.authcheckdam.pdf
5.  See generally 43 Fla. Stat. § 744.331  
6.  In some cases, a court may find that a person is only partially incapacitated, meaning that he or she can manage some essential affairs but not others.  In that case, the court will appoint a guardian to perform only those functions that the ward cannot perform himself or herself.   
7.  http://www.sun-sentinel.com/opinion/editorials/fl-editorial-guardianship-20150410-story.html
8.  http://www.mypalmbeachpost.com/guardianships-martin-colin/
9.  http://www.gao.gov/new.items/d101046.pdf
10. This chart sets forth the required qualifications for guardians, state by state: https://www.americanbar.org/content/dam/aba/administrative/law_aging/2017_chrt_st_guard_cert.pdf