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Options for Protecting an Adult with Diminished Capacity

Guardianship and Conservatorship Home Page

The page discusses some options and legal tools under Utah law for protecting an adult with diminished capacity. It does not include options for minor children. This page may be a useful resource, but it is not a substitute for specific advice. As needed, seek out a lawyer, accountant, tax preparer, social worker or case manager to answer questions and suggest options and advice.


Plan Ahead

Anyone 18 or older has the right to make decisions based on his or her values and beliefs, even if others disagree with those decisions. Making decisions is an essential part of adult life. Every day we make decisions for ourselves and for the people who depend on us. Decision making can be burdensome, even stressful at times, but few of us would willingly give up the right to make our own decisions. An adult who loses the capacity to make decisions may need special protection, and planning can help ensure that the person's preferences and values will be followed during a time of diminished capacity.

The options described on this page present risks because the person with diminished capacity is allowing someone else to take control of his or her money, property and healthcare. These options have little or no supervision of that other person, and you are trusting that person's ethical values to do the right thing even though no one is watching.

The advice of a lawyer experienced in estate planning and elder law is most important. A lawyer can advise you about steps to protect against abuse, neglect and exploitation of a person with diminished capacity.


Arranging for Help and Services

The best course of action may be to help the person with diminished capacity make and implement their own decisions. As needed, seek out a lawyer, accountant, tax preparer, social worker or case manager to answer questions and suggest options and advice.

The person with diminished capacity as well as the people caring for that person may benefit from support available, not only from family, friends or spiritual communities, but also from government and community resources and organizations which provide information, services, education, and support. For more information, see our page on Resources to Help a Guardian and Conservator.


Representative Payee

A representative payee is a person appointed by a government agency, such as the Social Security Administration (ssa.gov), Department of Veterans Affairs (va.gov) or Railroad Retirement Board (rrb.gov), to receive and manage the money paid by that agency. To serve as the representative payee, apply to the agency that provides the benefits. In most cases in which the person with diminished capacity has an agent with power of attorney or a trustee, guardian or conservator, the agency will appoint that person as representative payee. But the agency may appoint any person as representative payee. If a protected person is under guardianship or conservatorship, the agency must appoint a representative payee to receive payments.


Durable Power of Attorney


Summary

A well-written durable power of attorney may help a person with diminished capacity handle financial matters without the need of more complex arrangements like a trust or a court-appointed guardian or conservator, which removes many or all of the person's decision making authority.

A lawyer experienced in estate planning is the most appropriate person to write a power of attorney. There are many power of attorney forms available on the internet — not on this court website — but they may be too general for your circumstances, they may not follow the requirements of Utah law, and they may not protect against financial exploitation and abuse.

A power of attorney is a document in which one person (called the "principal") gives to another person (the "agent" — or sometimes called the "attorney in fact") authority to act on behalf of the principal. A power of attorney can be very broad, allowing the agent to perform a variety of tasks: for example, handling bank accounts, selling real property, running a business, applying for public benefits. It can also be very limited and restrict the agent to one or more very specific tasks: for example, selling one specific piece of real property. The agent cannot use the principal's assets in a way that is against the principal's wishes.

Once a power of attorney document is written, it must be signed by the principal. Utah law does not require that the principal's signature be notarized but notarization is wise because it provides assurance to third parties. No witnesses are necessary and there is no need for the agent to sign. Store the original in a safe but accessible place, and give the agent a second original or a copy. Each person the agent deals with will probably want a copy.

At the time of signing the power of attorney, the principal must have sufficient mental capacity to understand that s/he is appointing an agent to handle his or her affairs. The principal does not have to understand how the agent will manage the principal's affairs.

Durability

"Durable" power of attorney means that the agent can act even if the principal becomes disabled or incapacitated. A power of attorney is durable if the document is in writing and includes the words:

  • "this power of attorney shall not be affected by disability of the principal," or
  • "this power of attorney shall become effective upon the disability of the principal."

Utah Code Section 75-5-501 .

If the first set of words is used, the agent's authority begins immediately and continues even if the principal becomes disabled or incapacitated. If the second set of words is used, the agent's authority does not begin unless the principal becomes disabled or incapacitated. If the second set of words is used, the power of attorney document itself should describe how the principal's disability or incapacity is to be determined. In a guardianship, a judge or jury will determine incapacity, but one objective of a durable power of attorney is to avoid the appointment of a guardian. You may choose to name a doctor who will examine the principal and certify the principal's disability or incapacity in writing, triggering the agent's authority.

Problems

There are problems with powers of attorney, and you should talk with a lawyer about how to guard against them. One problem is the reluctance of third parties to accept the agent's authority. If possible, you should ask about the acceptance policies of banks, brokers, and other persons the agent will deal with. Some companies may want the principal to complete the company's power of attorney form.

Staleness is a related problem. Unless the power of attorney document includes a termination date, the passage of time does not affect the agent's authority. Utah Code Section 75-5-501 . However, some persons are reluctant to rely on a power of attorney that is several years old, especially if the person does not know the principal and agent. As with all estate planning documents, the best practice is to review the power of attorney periodically, perhaps even once a year. The review should include confirmation that the document still expresses the desires of the principal, that the agent is still the appropriate person to make decisions, and that the decisions are still the ones to be made. If there are no changes, the principal can indicate by date and signature that the document remains valid. Even though notarization is not required, a notarized signature provides third parties with some assurance of the validity of the signature.

Under Utah Code Section 75-5-501 , if the principal of a power of attorney does become disabled or incapacitated, the agent must:

  • within 30 days of the principal's disability or incapacity, notify all interested persons of the agent's status and the agent's name and address;
  • upon written request of an interested person, provide a copy of the power of attorney;
  • upon written request of an interested person, provide an annual accounting of the assets to which the power of attorney applies, (unless the power of attorney expressly directs that agent is not required to do so); and
  • notify all interested persons of the principal's death.

Because there is no formal supervision of the agent's actions, it is not a good idea to say in the power of attorney document that the agent does not have to provide an accounting. Saying nothing in the document is enough to impose the accounting requirement, and you can say in the document that the agent is required to provide an annual accounting, even without a request.

Changes

A principal can revoke or change a power of attorney at any time. The change must comply with all of the requirements of the original power of attorney document. It must be in writing, signed and should be notarized, and, at the time of the change, the principal must understand that s/he is appointing an agent to handle his or her affairs. The revocation also should be in a dated and signed writing, but it does not need to be notarized. The agent must receive a copy of the revocation. Any third party who has relied on the agent's authority under an earlier power of attorney also should receive a copy of the revocation. A power of attorney automatically terminates upon the death of the principal.


Trust


Summary

A trust is an arrangement in which one person (called the "settlor") gives his or her money and property to a second person (called the "trustee") to manage, invest and pay out for the benefit of a third person (called the "beneficiary"). A trust can help provide for the care of the settlor's dependents in the event of the settlor's death.

One common type of trust is known as a "living trust" in which one person can play all three roles: settlor, trustee and beneficiary. The administration of a living trust does not differ much from every day saving, spending and managing one's money and property: Once the trust is created, the person's money and property is owned by the trust but managed by the person for his or her own benefit (and any other beneficiaries). Upon the death of the person, the trust assets can be paid to another beneficiary.

There is no such thing as a standard trust and different types of trusts serve a variety of purposes. Each trust should reflect the unique needs and desires of the person who creates it. A trust can contain any provisions so long as they don't conflict with laws or public policy. Creating a trust is highly technical, and you should seek the help of a lawyer experienced in estate planning.

Discretionary trust for a person with disabilities

A special type of trust called a "discretionary trust for a person with disabilities" is a useful planning tool for persons with disabilities and their families. The government benefits that a person with disabilities is entitled to receive may not be reduced because of contributions to a discretionary trust for that person. State agencies disregard a discretionary trust as a resource when determining eligibility for services or support.

A discretionary trust for a person with disabilities is not required to reimburse the state for financial aid or services provided to that person. State agencies can seek reimbursement from trust property that is distributed to or under the control of the beneficiary, but not from property, goods and services that are owned by the trust and merely used by the beneficiary.

To qualify as a discretionary trust for a person with disabilities, Utah Code Section 62A-5-110, requires that the trust:

  • be established by a parent, grandparent, legal guardian, or court for the benefit of a person who, at the time the trust is created, is under age 65 and has a disability;
  • gives the trustee discretionary power to determine distributions;
  • prohibits the beneficiary from controlling or demanding payments;
  • contains the beneficiary's assets;
  • be irrevocable, unless the beneficiary no longer has a disability; and
  • provides that, upon the death of the beneficiary, the state will receive all amounts remaining in the trust, up to the amount of medical assistance paid on behalf of the beneficiary.

If you have funds that are subject to a state lien, you cannot put those finds into the trust. If the funds become subject to a state lien after they have been deposited in the trust, that portion of the trust is invalid. Utah Code Section 62A-5-110 .


Health Care Agent and Advance Health Care Directive


Summary

You can appoint an agent to make health care decisions in the event that you no longer have the capacity to do so. Your agent should be someone you trust, who knows, understands and will honor your preferences, and who will be available if needed. An advance health care directive expresses your preferences about health care decisions and helps ensure that your decisions will be carried out, even when you are no longer able to make or communicate those decisions. A health care agent can be appointed in an advance health care directive.

The person appointing an agent must have sufficient mental capacity to understand that s/he is appointing an agent to handle health care decisions. A person might have capacity to appoint an agent even if the person does not have the capacity to make health care decisions for himself or herself or does not have the capacity to make an advance health care directive.

An advance health care directive may be oral, but a written document may be more reliable. The written or oral directive must be witnessed, but does not have to be notarized. If you choose to make a written advance health care directive, you should keep the original in a safe but accessible place, and you should give a copy to your health care agent and to your health care providers.

Appointing a health care agent and making an advance health care directive are not as technical as a trust or a durable power of attorney and many people do it without hiring a lawyer. For more information and forms, see the University of Utah Center on Aging website.

Decisions by an agent or under an advance health care directive

Even after making an advance health care directive you retain the right to make health care decisions as long as you have capacity to do so, and your current health care decisions, however expressed, always supersede earlier decisions or directions in an advance health care directive.

An advance health care directive or the authority of an agent to make health care decisions are effective only after a physician, physician assistant, or advance practice registered nurse determines that you lack capacity to make health care decisions. They remain in effect during any period of time in which you lack capacity to make health care decisions.

Your agent must make health care decisions, including end-of-life decisions in accordance with:

  • your current preferences, if known;
  • your written or oral directions, if there are any;
  • the agent's understanding of your preferences; or
  • the agent's understanding of you would have wanted under the circumstances.

Your agent may not admit you to health care facility for long-term custodial placement other than for assessment, rehabilitative, or respite care over your objection.

Changes

An advance health care directive or the authority of an agent to make health care decisions ends when:

  • you disqualify the agent or revoke the advance health care directive;
  • a health care provider finds that you have health care decision making capacity;
  • a court invalidates your health care directive; or
  • you challenge the health care provider's finding of incapacity.

An advance health care directive can be revoked at any time by writing "void" across the document or by destroying the document. If you have appointed your spouse as your health care agent and you are later divorced, the divorce decree acts to revoke the appointment. If you revoke an advance health care directive, you should make your decision known to your health care agent, your health care providers and anyone who has a copy of the directive. If you have more than one directive, the latest one controls.


Guardianship and Conservatorship

Of the options described on this page, only the appointment of a guardian or conservator necessarily requires a judge's approval. This option is listed last because the appointment of a guardian or conservator removes the right of a person to make his or her own decisions. It should be pursued only after considering other, less restrictive options.

If you are going to be the guardian or conservator for a protected person, consider not only the information on this page but also the other pages linked from Guardianships and Conservatorships for an Adult . You will want to have a clear picture of what is expected of a guardian and conservator before agreeing to serve in those roles.

Summary

A guardian is a person or institution appointed by a court to make decisions about the personal well-being — residence, health care, nutrition, education, personal care, etc. — of an incapacitated adult, who is called a "protected person." A conservator is a person or institution appointed by the court to make decisions about a protected person's estate.

The protected person's estate includes all of his or her property, business and personal. Some examples are income (such as wages, an annuity, a pension, and Social Security or other government benefits), real property (buildings and land), and personal property (furniture, cash, bank accounts, certificates of deposit, stocks, bonds, motor vehicles, and valuables such as jewelry, tools, furs and art). A conservator must use reasonable care, skill and caution to manage and invest the estate to meet the protected person's needs over his or her expected life.

Under appropriate facts, the court might appoint a guardian or a conservator or both. The guardian and the conservator might be two different people, or they might be the same person. If there is no conservator, the guardian has some of the conservator's responsibilities.

If the protected person needs help in some but not all areas of decision making, the court will order a limited guardianship. A limited guardianship is preferred, and the court will grant a full guardianship only if no alternative exists. A limited guardian has only those powers listed in the court order. The court can also limit the authority of a conservator.

Serving as a guardian or conservator for another person requires a large amount of time, patience, sensitivity and care. Before you agree to serve, make sure you have the time and dedication to do a good job. For more information about what is required and expected of a guardian and conservator, see our other pages under Guardianship and Conservatorship for an Adult .

Things that are the same between guardianship and conservatorship

Being a guardian or conservator is a demanding role. A guardian and conservator are responsible for decisions for another person, and they must always act with the utmost honesty, loyalty and fidelity toward that person. A guardian and conservator must always act in good faith. A guardian and conservator also owe duties to the court: They must report annually to the court; they must advise the court when either they or the protected person changes residence; and they must follow all court orders.

A guardian and conservator help the protected person make decisions or, if necessary, make decisions for the protected person. But the guardian and conservator cannot simply do what they want. The guardian and conservator should make the same decision that the protected person would make, unless that decision will cause harm. It is important that the guardian and conservator become and remain personally involved with the protected person to know of his or her preferences, values, capabilities, limitations, needs, opportunities, and physical and mental health.

A guardianship and conservatorship removes the fundamental right of the protected person to make his or her own decisions. Asking the court to appoint a guardian or conservator should be a last resort, after all other, less intrusive means have been examined first. The decision to seek a guardianship or conservatorship should not be based on stereotypical notions of old age, mental illness, or disability. The decision should not be made because you disagree with what an adult with diminished capacity wants to do.

A guardian and conservator may resign, and the court will appoint another if the protected person still needs one. A person who has been appointed as both guardian and conservator can resign as one, or the other, or both. Or the circumstances that justified the appointment in the first place may change so that the protected person no longer needs a guardian or conservator. Regardless of the reason to end the appointment, the guardian and conservator retain their obligations until the court ends the appointment. Utah Code Section 75-5-306 , Section 75-5-307 and Section 75-5-415 .

Things that are different


Protected person's capabilities

To appoint a guardian, the protected person must be incapacitated. "Incapacity" means that an adult's ability to:

  • receive and evaluate information;
  • make and communicate decisions; or
  • provide for necessities such as food, shelter, clothing, health care, or safety

is so impaired that the person lacks the ability, even with appropriate technological assistance, to meet the essential requirements for financial protection or physical health, safety, or self-care. Incapacity is a judicial determination, and is measured by the person's functional limitations. Utah Code Section 75-1-201 .

A person does not have to be incapacitated to appoint a conservator. A conservator may be appointed if a person is unable to manage his or her property effectively and a conservator is needed:

  • to prevent the protected person's property from being harmed; or
  • to obtain or provide funds for the support of the protected person or the protected person's dependents. Utah Code Section 75-5-401 .
Guardian's and conservator's authority and responsibilities

A guardian makes decisions about the protected person's personal well-being — residence, health care, nutrition, education, personal care, etc. A guardian advocates for effective services. A guardian must keep the protected person from harm and help him or her to be as independent as possible.

A limited guardian has those powers and duties listed in the court order. Utah Code Section 75-5-304 .

Utah Code Section 75-5-312 says that in a plenary or full appointment "the guardian has the same powers, rights, and duties respecting the ward that a parent has respecting the parent's unemancipated minor child…." However, there are limits imposed on a guardian that might not be imposed on the parent of a minor. For more information, see our page on Respecting the Protected Person's Rights.

Unless limited by the order appointing the conservator, the conservator has the authority conferred by law on conservators plus the same authority as the property owner. Utah Code Section 75-5-408 .

Temporary appointment

In an emergency, the court may appoint a temporary guardian, who serves for no more than 30 days, until a hearing to decide whether the protected person needs a permanent guardian. A temporary guardian has the responsibility of a permanent guardian, either limited or full, depending on the circumstances. Utah Code Section 75-5-310 .

There is no appointment of a temporary conservator.

Who can serve?

The judge can appoint any competent person to serve as guardian, but Utah Code Section 75-5-311 creates a priority list, and the judge will appoint in the following order unless there is a good reason not to:

  • a person nominated by the respondent;
  • the respondent's spouse;
  • the respondent's adult child;
  • the respondent's parent;
  • a person nominated by the respondent's deceased spouse;
  • a person nominated by the respondent's deceased parent;
  • any relative with whom the respondent has resided for more than six months before the petition is filed;
  • a person nominated by the person who is caring for or paying benefits to the respondent;
  • a specialized care professional.

The judge can appoint any competent person to serve as conservator, but Utah Code Section 75-5-410 creates a priority list, and the judge will appoint in the following order unless there is a good reason not to:

  • a person already appointed by another court to care for the respondent's affairs;
  • a person nominated in writing by another person already appointed by a court to care for the respondent's affairs;
  • a person nominated by the respondent;
  • the respondent's spouse or a person nominated in writing by the respondent's spouse;
  • the respondent's adult child or a person nominated in writing by the respondent's adult child;
  • the respondent's parent;
  • a person nominated in the will of the respondent's deceased parent or someone chosen by the person nominated in the will;
  • a relative with whom the respondent has resided for more than six months before the petition is filed, or someone nominated by that relative;
  • a person nominated by whoever is caring for or paying benefits to the respondent.

When to have a guardian, a conservator or both

If the court has not appointed a conservator, the guardian has some of the conservator's authority and responsibility. Utah Code Section 75-5-312 . You should consider petitioning the court to appoint a conservator, either you or someone else, if:

  • you, as guardian, do not want responsibility for the protected person's financial affairs;
  • the protected person owns real property;
  • the protected person has assets over $50,000 or income over $50,000 per year;
  • the protected person has property in other states, on-going business affairs or extensive debts or financial investments;
  • the protected person owns property other than clothing, furniture and personal effects; or
  • someone else depends on the protected person for support.


Page Last Modified: 6/3/2013
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