A: A guardianship is a process by which the Probate Court appoints a person as guardian for an individual who the Court finds to be mentally incompetent and unable to manage their own affairs. The person under guardianship does not have to consent to the guardianship, and the guardianship can be granted over the person's objection.
Q 2: Are there alternatives to guardianship?
A: General Durable (financial) Powers of Attorney and Durable Health Care Powers of Attorney are alternatives to a guardianship. These voluntarily executed documents must be signed by an individual prior to the time that they become mentally incapacitated. Because they are "durable," once the documents are signed they remain effective even after the person becomes incompetent due to illness or injury. If such Powers of Attorney are not executed and a person becomes incompetent, the only avenue for vesting authority in someone else to make decisions for that individual is through the guardianship process.
Q 3: Whom can I appoint to be my attorney in fact?
A: Any person over the age of 18 who is trustworthy, knowledgeable and sensitive to a person's needs can be appointed an attorney in fact.
Q 4: Is the Court involved in establishing these powers of attorney?
A: There is no Court involvement with the appointment or designation of an attorney in fact. One of the downsides to using powers of attorney is the absence of court review and scrutiny, the lack of a need for filing an annual accounting and the absence of a surety bond requirement to protect the assets from mismanagement or theft.
Q 5: Leading to that all famous question, what is a surety bond?
A: A surety bond is an insurance policy guaranteeing the proper performance of fiduciary duties by a guardian, executor or trustee appointed by the Probate Court in the State of New Hampshire. In the event that a fiduciary steals or mismanages estate assets causing financial loss, the bond company will step in and reimburse the estate and then seek redress against the fiduciary personally. Because there is no court involvement in establishing powers of attorney, there is likewise no requirement for surety bonding.
Q 6: What is the legal difference between guardianship and powers of attorney?
A: Guardianships are court established, require proof of incapacity and are involuntary (a guardian may be appointed even if the ward objects). Guardianships cannot be revoked by the "ward" without a court determination that the person is no longer incompetent. A power of attorney does not involve the court, requires that the individual is competent and acts voluntarily when signing the document and generally can be revoked at any time for any reason by the grantor.
A: Under New Hampshire law (RSA 506:7) any interested party may seek a review and accounting from an attorney in fact for their management of an individual's resources under a power of attorney by filing a petition in the Probate Court. Such allegations, if proved to be true, can result in removal of the attorney in fact and the requirement for restitution of assets to the person who granted the power of attorney. Note that due to the absence of a bond, if the funds have been spent or the assets otherwise squandered, the only avenue is to seek funds directly from the offending attorney in fact. If they have no resources and are "judgment proof," it is generally impossible to recoup the misappropriate funds.
A: A valuable alternative to a power of attorney is a conservatorship. This involves the court appointment of a person called the conservator to manage the affairs of an individual who is competent and approves the appointment and is subject to the review and annual accountings to the court and a surety bond requirement. Because the individual is necessarily competent, they may revoke the conservatorship at any time by requesting that the court remove the conservator. While more involved and expensive, a conservatorship affords many of the safeguards of a guardianship for an individual who is still competent but is requesting assistance with management of their affairs. This is advisable especially in cases involving a sizable estate.
Q 9: My spouse has Alzheimer's. We have been married for 25 years. Do I need to get a guardianship?
A: Each person 18 years of age or over is deemed to be legally competent to make decisions regarding their own affairs, unless they have signed a power of attorney. Only after the Probate Court has found, beyond a reasonable doubt, that they are incapacitated and appoints a guardian can that person act on behalf of the incapacitated person referred to as the "ward." Being a person's spouse, next of kin, parent or other close relative does not give legal authority to make decisions on that person's behalf. Only the Probate Court can vest that authority in a guardian.