Maryland Estate Litigation

Tag: financial power of attorney

A Primer on Guardianships – Part Four – Understanding Incapacity

by David A. (Andy) Hall

Clients often talk to us about whether someone is competent to execute legal documents such as a will or a power of attorney (POA).  Talk of competency is generally putting the cart before the horse.  Competency is a legal term, but it has to do with whether a person lacks legal competence, e.g., they are a minor, or they have been adjudicated incompetent.[1]

From an estate planning perspective particularly where the goal is avoid a guardianship, the question is whether someone has capacity to make decisions or execute planning documents. [2]  The capacity required to execute a will is the ability of the testator/testatrix to understand the nature of their assets and the objects of their bounty.[3]  Put more simply, does a person know who their children and/or grandchildren are, and do they know what “stuff” they own.  In order to devise[4] property to a relative, a testator/testatrix[5] needs to know the property they have and who they are giving the property.  It makes sense from an intrinsic level that you need to know these two points in order to give something away otherwise someone could give away things that are not theirs to people they do not know, which is generally not how people approach estate planning.  All in all, the capacity needed to execute a will is pretty low.  A will, however, will not obviate the need for a guardianship.  Additional incapacity planning is required.

The capacity required to execute a trust is the same as that required to execute a contract, which requires that the party must understand the nature of the business conducted. For contracts, the more complicated the contract, then the higher the level of understanding required to be able to execute the contract.   This holds true for advance medical directives (AMD) and POAs.  Overall, the capacity to execute a will is less than the capacity required to execute a trust or other incapacity planning documents (AMDs and POAs).

Incapacity planning documents are important in the realm of avoiding guardianships.  Most of these documents have explicit nominations for persons to serve as guardian should the need arise, but they also serve the role of allowing an agent to make or communicate decisions for a principal during a period of incapacity.  Without these documents, it may become necessary for a relative to file for guardian of the person and/or property.

A guardian of the person may be appointed upon the following grounds:

Grounds. – A guardian of the person shall be appointed if the court determines from clear and convincing evidence[6] that a person lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person, including provisions for health care, food, clothing, or shelter, because of any mental disability, disease, habitual drunkenness, or addiction to drugs, and that no less restrictive form of intervention is available which is consistent with the person’s welfare and safety.

Estate & Trusts § 13-705(b).  There are three operative components of the grounds for filing a guardianship of the person.  First, the alleged disabled lacks “sufficient understanding or capacity to make or communicate responsible decisions concerning his person.”  Id.  Second, this is due to “mental disability, disease, habitual drunkenness, or addiction to drugs.” Id. Third, there is “no less restrictive form of intervention.”  Id.

Focusing on the first basis, because of the person’s mental disability or other cognitive impairment, the person lacks capacity to make or communicate decisions.  This covers someone in a temporary or medically induced coma to someone who’s dementia has progressed to a point where they can no longer interact with others in any normal sense of the expression.  It can also cover someone who is habitually drunk or addicted to drugs.[7]  A guardianship of the person is necessary because the alleged disabled did not have proper incapacity planning documents in place and are unable to sign documents appointing a healthcare agent to make decisions on their behalf.  Physically a person may still be able to sign and there are many cases brought where someone has been unduly influenced to sign particular estate planning or ancillary documents, but that does not mean that they possess the contractual capacity in order to execute an AMD or POA.

If after a court finds the alleged disabled is unable to make or communicate decisions due to mental disability or other cognitive impairment and there is no less restrictive alternative, then the court will appoint and guardian of the person.  After the appointment of a guardian, then a person has been legally adjudicated incompetent to make legal decisions.  Thus, it is after a long process that the conversation about whether someone is competent is appropriate from a legal perspective.

Filing for guardianship may be a difficult process with unique challenges for those who do not handle these on a regular basis.  If you believe that you need to file for guardianship, then call for a free consultation.

David A. (Andy) Hall, Esq.
King|Hall LLC
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
410-696-2045

andy@kh.legal

 

[1] In criminal law, competency is the ability of the accused to stand trial and participate in one’s defense.

[2] Note that this distinction is muddled by the Maryland Code, specifically, Estates & Trusts Art. § 4-101 states “Any person may make a will if he is 18 years of age or older, and legally competent to make a will.” (emphasis added).

[3] Sellers v. Qualls, 206 Md. 58, 66, 110 A.2d 73 (1954).

[4] Give away pursuant to a will. See Black’s Law Dictionary [Third Pocket Edition] p. 207 (2006).

[5] A person executing a will.

[6] “To be clear and convincing, evidence should be ‘clear’ in the sense that it is certain, plain to the understanding, and unambiguous and ‘convincing’ in the sense that it is so reasonable and persuasive as to cause you to believe it.” Maryland Civil Pattern Jury Instructions § 1:13 (2013).

[7] Note the language used in the code, it is not referring to someone that has a drinking problem or casually uses drugs.  Also, the use of the intoxicants must prevent them from making or communicating decisions, not necessarily making poor decisions.

Investing in Family

by barrettrkingpc

Throughout the years, we are constantly taught, admonished, reminded that we must invest. We must invest in our education by focusing on our studies or by taking student loans to complete our degree so that we can increase our earning potential and job satisfaction. We are taught that we must invest in our retirement by saving a portion of our earnings in an IRA or 401(k). We eventually, for those of us who have them, invest in our children by saving for their own education and by making sure to catch their baseball or field hockey games even if it means going back to the job or office and pulling a late night as soon as the game ends.

Looking back, as teenagers we start our flight from the nest and comforting wing of our parents or guardians with our desire to establish independence. An important part of our passage into adulthood is separating ourselves from those who invested in us so that we can invest in ourselves. And, before we know it, our parents have aged into retirement. To your eyes, are they enjoying themselves? Do they travel? Do they engage in hobbies? Are they experiencing what you grew up hearing them say they would hope to experience in retirement? Do they get to spend time with you or with the grandchildren? Are they getting to relish in the satisfaction of seeing you thrive on their investment and sacrifice in you?

Eventually, the caregiver becomes the cared for. It is worth talking to your parent or guardian about long term care insurance or whether they saved enough for retirement to self-insure for anticipated lifetime medical and long term care expenses. It can affect your ability to invest in your own children or in your own retirement if you have to take time away from work or your young family to become a caregiver or untangle a legal morass where your parents did not properly plan.

Help your parents plan for themselves. You are a major part of your parents’ life story and their future. We spend such a large part of our lives doing the things we do not want to do – chores, commuting, planning, even sleeping – that we should truly enjoy the small moments. And one way to ensure you and those who invested in you will get to do just that is to talk about estate planning and investing for the years to come.

Barrett R. King, Esq.
King|Hall LLC
410-696-2405
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
barrett@kh.legal
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A Primer on Guardianships – Part One – Introduction

by David A. (Andy) Hall

Potential clients will often come into our office because their loved one is no longer able to manage their financial affairs or health care decisions due to a disabling event or disease.  One study suggests that nearly two-thirds of Americans do not have incapacity planning documents.  When the disabled person does not have the proper planning documents in place (at minimum, an advance medical directive and financial power of attorney), then their loved ones are unable to make the necessary medical and financial decisions on their behalf.  Often the next step for those clients is to file for guardianship of their loved one.

Many clients are often dismayed that guardianship is not a simple process.  A husband will often believe that they will naturally be appointed as guardianship for his disabled wife without much fuss, but the process may be much more complicated.  First, the court will appoint an attorney for the “alleged disabled person”.  That term of art is important because it underlines why the courts are very particular in how guardianships proceed.  It is up to the “Petitioner”, the one seeking guardianship, to prove that the alleged disabled person (“ADP”) lacks the capacity to make decisions for him or herself.  The court wants to make sure that the ADP indeed lacks the capacity prior to taking away that person’s rights.

The court appointed attorney will meet with her client and ask if they want to contest the guardianship.  The ADP’s answer is critical to how the case unfolds.  Sometimes this answer is driven by the ADP’s underlying medical condition and sometimes they refuse to believe that they cannot handle the decisions for themselves as they have always done.  If they want to contest the guardianship, then it will proceed like a normal civil case where both parties engage in discovery and the process culminates in a trial.  The ADP has a right to a trial by jury or can elect a bench trial (where the judge makes the final decision).

The process may become more complicated if someone else seeks to be appointed guardian as well.  This often arises where two siblings battle over who best would care for mom or dad when they are disabled.  It is possible for the litigation to be fought between three or more litigants with all sides fighting hard.

Having the right guardianship attorney on your side will help you navigate this complex area of law.  It can be maddening to have to fight so hard just to help your loved one, but it’s the unfortunate side of when the proper planning documents are not in place prior to the disabling event or disease.

David A. (Andy) Hall, Esq.
King|Hall LLC
410-696-2045
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
andy@kh.legal

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