By 
Most clients want to avoid a stay in a nursing home at all costs. Institutional care may be necessary, but no one invites it before it is absolutely necessary. If you have a revocable living trust, you may even believe that you have done everything possible to prevent unwanted probate, guardianship, and institutionalization. Unfortunately, many people are wrong.
Most people are told that their trusts discourage court-appointed guardianship, sometimes called living probate. This is probably true, but only to a very limited degree. By providing a surrogate decision-maker, the trust and accompanying estate planning documents are believed to make a court-appointed guardian unnecessary. Unfortunately, that assumption is not always true.
Let’s take the example of Mollie Orshansky. In preparation for her retirement, Mollie met with her lawyer and put together a plan for her medical care and the financial management of her two million dollar estate in the event she was unable to make decisions for herself. herself. Mollie established a revocable trust naming her sister as trustee and executed a health care power of attorney naming her niece.
Her health began to decline in 2000, and despite her best efforts to plan for the worst, in 2001 a local court in Washington, DC, ignored her efforts to determine who would care for her and where she would live. Instead, the court appointed a non-family member to act as Mollie’s guardian and an attorney to represent her, and placed her in a hospital in the nation’s capital city. A legal battle ensued between Mollie’s family members, the people she had chosen to care for her, and officials acting on behalf of the court and the city of Washington.
Michael Kutzin, the lawyer who represented the family explained what happened: “[Mollie Orshansky’s] The case demonstrates many of the problems that seniors and their families often face after falling into the whirlwind of guardianship.” Mr. Kutzin testified that “[g]guardianship statutes generally recite high principles of honoring the wishes of an incapacitated person where possible, and require a myriad of protections… However, in practice, once a guardianship proceeding is started against someone, a machinery that often means that a guardian is required, and goes over the wishes of the older person and their family. This is particularly true when… the procedure is initiated by a hospital or nursing home, and family members live in another state. A similar disregard for the wishes of the older person and their family often occurs when the older person has significant assets. Both factors were present in the Orshansky case.”
Most trusts actually become a weapon for public guardians because, in addition to ordering assets under common control, they often require that, in the event of incapacity, the trustee must pay for all trust assets necessary to maintain to the grantor during incapacity. . A public guardian can rely on such an arrangement to quickly and easily control all assets in the estate. Also, deprived of assets, how does the victimized older adult protect his rights? The combination of easing control and disarming a potential legal challenge can encourage the appointment of a guardian! At the very least, one would hope that your estate plan would discourage a conservatorship.
In Mollie’s case, her family refused to leave her victimized by the court and the guardian. Her family, headed by Mollie’s niece, spent her own money on legal representation in an effort to free the imprisoned elderly woman. Fortunately, they were ultimately successful, but not before spending over $200,000.00 in legal fees and expenses. Sadly, if Mollie had been like most older people, with family members unable to spend such sums on her behalf, she likely would have ended her life imprisoned in an institution against her will and wishes. of her loved ones. You can read about Mollie, in the testimony of her attorney and her family before the United States Senate Special Committee on Aging, in “ELDERLY TUTORING: PROVIDED SECURITY OR FREEDOMS DENIED?” can find here.
You can also read about the danger of guardianship. As Senator Craig explained:
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“Guardianship can strip an older person of all of the rights and freedoms that we consider important as citizens of this great country. When full guardianship is imposed, older people no longer have the right to marry, vote in elections, enter into contracts, make medical decisions, manage finances, or buy and sell property. They can’t even make decisions about where they want to live. All of these rights are taken away from the elders and given to a substitute decision maker: the guardian. Our research has confirmed that some guardianships can have burdensome effects on the elderly. For example, guardianship can exhaust the elder’s estate, lead to lengthy court proceedings, and substitute the judgment of a total stranger for that of the elder and her family. A recent case has come to my attention when a court actually terminated a marriage under guardianship.”
And yet, witnesses and professionals agreed that an older person accused of being incompetent or incapacitated has fewer rights in state probate court than a person accused of committing murder in criminal court.
If you wish to disarm the third party guardian, your trust must have a complete advanced competency plan, which includes the following provisions:
- The trust must define incompetence or incapacity;
- The trust must designate a personal physician by name to determine competence, in agreement with another independent physician;
- Your trust must restore to you the legal authority to act on your own behalf when recovering from a disabling medical condition without recourse to a court or legal proceeding;
- The trust must designate your successor trustee and/or agent to act on your behalf in all matters in the event you are deemed incompetent or incapacitated by your personal physician;
- The trust must have provisions authorizing the trustee to deny the request of a guardian appointed by a probate court to deliver the trust assets to the guardian’s control; and,
- In order to protect trust assets, the trust must have a provision that allows the trustee to terminate the trust and transfer the assets to another trust for the benefit of the beneficiaries if the court-appointed guardian threatens to bring, or bring legal action against sixteen the trust assets.
These provisions must be permitted by the trust, but the operative provisions must be found in a separate appendix to the trust. Because? If the problem arises, the addendum allows the trustee to provide the operating provisions to third parties without compromising the confidentiality of the trust.
In addition, you should consider clearly indicating your preference for home health care over nursing home care, and consider authorizing the trustee to keep you in your home. These provisions will significantly reduce the risk that you will find yourself in a nursing home against your will, fighting for your right to make life decisions. In addition, these provisions will allow you and your family to maintain control of important decisions, such as where you live, your medical treatment, and who you visit and associate with.
Only when you have a trust that aggressively protects your rights and interests should a question arise about your competence or ability to make decisions for yourself, can you be sure that your estate plan does everything possible to discourage probate during your lifetime. .