The Risks of Guardianship

Various media outlets in Las Vegas have recently reported on extensive problems with the guardianship system in Southern Nevada. In a most dramatic example of the guardianship system being abused, a private, professional guardian has been accused of improperly taking more than $495,000 from a Las Vegas woman who was under guardianship. This dramatic example of abuse is extremely distressing. However, for most Southern Nevadans the risks of guardianship are not quite as dramatic, but are, nevertheless, still real. Here are some of these risks and how you can protect yourself.

What is Guardianship? 

A guardianship generally arises when an adult is not able to manage his own finances or personal matters or is not able to make health care decisions for himself¹⁾Guardianships of minor children may also occur, but I will not discuss guardianships for minors in this article. In such circumstances, Nevada law is very broad, allowing “any interested person” to petition the Guardianship Court to be appointed as the guardian of the “ward” ²⁾meaning, the person who is in need of guardianship, See NRS 159.044. Interestingly, the Nevada guardianship statutes do not provide any further definition of who is an “interested person”. For all practical purposes, the Guardianship Court has allowed essentially anyone who says they are an interested person to be appointed as a guardian, even if the “interested person” is not related to the ward in any way and even if the “interested person” has never met the ward prior to asking for appointment as the guardian. So long as the interested person can establish that the ward needs guardianship, the Guardianship Court will generally appoint that interested person as guardian of the ward.

The Risks of Guardianship 

Once a guardian is appointed, the ward is declared legally incompetent and, thus, loses control of his own decisions. In essence, the guardian is authorized to make all decisions for the ward, including decisions on where to obtain health care, where the ward’s money is invested, whether to sell the ward’s house, where the ward will live, and what the ward can do with his free time. In best case scenarios, the guardian will act more as a mentor and counselor to the ward in making these decisions and will follow the ward’s directions on these decisions to the greatest extent possible. In the worst case scenarios, the guardian runs the ward’s life with no regard for the ward’s own choices.

Nevada law allows the guardian to be paid “reasonable compensation” for the guardian’s services ³⁾NRS 159.183. It is very important to know that the guardian’s compensation is paid from the ward’s own money, not by the State or County. Similarly, the guardian is entitled to hire an attorney and other professionals to provide their professional services to the guardian. Again, the fees and costs of the attorneys and other professionals are paid from the ward’s own money, not by the State or County. It is commonplace to see combined guardian fees and attorney fees to exceed $10,000 for very routine guardianship matters. In difficult or disputed guardianship matters, these fees can total tens of thousands of dollars.

Protect Yourself from Guardianship 

The most simple and effective way to protect yourself from guardianship is to sign power of attorney documents for both financial/general matters and also for health care decisions. Power of attorney documents allow you to decide who you would want to help you manage your financial and general matters and to make health care decisions for you if you were not able to do so. Appointing an agent under a power of attorney performs all of the functions that a court-appointed guardian would perform without the expense and loss of independence that occurs in guardianship. Power of attorney forms can be created relatively inexpensively by experienced estate planning attorneys, so do not leave this to chance by using the fill-in-the-blank forms that are often full of mistakes that render them invalid and unusable.

A revocable living trust is also an important tool to avoid the need for guardianship court. When you create a revocable living trust, your assets are transferred into your trust and are held and used according to the terms that you set up when you create your trust. Such assets in a trust should not require any court intervention or oversight in order for the assets to be used for your benefit. In addition, thoughtful estate planning attorneys can include provisions in the trust that protect you from the risks of the guardianship system and prepare the trust in a way that keeps your assets out of guardianship.

Most importantly, though, is advice that is not legal advice, but the best practical advice you can use to avoid the risks of guardianship. Many elderly people retire in Southern Nevada without any family members who live in Southern Nevada. These retirees are particularly vulnerable to being caught in the guardianship system.

It is crucial for these retirees to be involved in their neighborhood and communities and make friendships and connections that will be able to protect them if the need arises. Make your neighbors aware of how they can contact your family if you are at risk for whatever reason. Be involved in your local church, charity, homeowners association, or senior center. Make sure that your primary care physician and any other doctors that you visit on a regular basis have a copy of your healthcare power of attorney or that they at least have the contact information for whomever it is that you trust most to take care of you if you cannot take care of yourself. Guardianship abuses arise most often when true “interested persons” (children, siblings, friends, etc.) cannot be located or have no idea that you are at risk, thus leaving the potential ward to the whims of an “interested person” who has no interest in you other than as another billable unit in their professional guardianship service.