Frequently Asked Questions
Note - these answers are general in nature and should not be relied upon as each situation is different. Furthermore, these answers are based upon general principals of OHIO law and no other jurisdiction. Should you have questions, you should seek legal counsel to discuss your situation from the appropriate jurisdiction.
Guardianship FAQ (FOR OHIO):
Q: What is a Guardianship?
A: A guardianship is a court ordered relationship between a person deemed incapacitated and a person who is to make decisions in that person’s best interest. The probate court is the superior guardian. Nobody has a right to be a guardian over an adult – however the probate court can certainly give preferences.
Q: What does incapacity mean in a guardianship?
A: The word “incapacity” can mean many things in various contexts. For a Court to create a guardianship, a person generally must be unable to make an informed decision. To go a little further, the person must not be able to weigh the magnitude of a decision.
Just because a person makes a decision that may not seem reasonable doesn’t mean a person lacks capacity. If a person can adequately weigh the pros and cons of a particular decision a person typically is deemed to have capacity. As an example, a person who says that they are willing to play the lottery even though there is a 1 out of 100,000,000 chance of winning doesn’t mean that they are incapacitated, however a person who can’t comprehend the pros and cons of such a wager may be incapacitated.
Q: What types of guardianship are there?
A: This is a compound question. At a basic level, there are two categories of guardianship.
A Guardianship of the person is where an individual makes decisions for the person relating to decisions such as medical care, placement, living arrangements, medications.
A Guardianship of the estate is where an individual makes financial decisions such as paying bills and entering contracts.
A guardianship can also be limited in duration and scope.
Q: What are the requirements of a guardianship?
Generally, a guardian of the person is required to complete annual education, annual reports, and have a new statement of expert evaluation completed.
Generally, a guardian of the estate requires an inventory of all assets before a request can be made to spend money on behalf of the person under guardianship. A court must provide authority before such an expenditure is made. Yearly, the guardian has to provide an account, annual reports, and a statement of expert evaluation.
An attorney can assist you in complying with your obligations as guardian of the person and estate.
Q: Are there alternatives to a guardianship?
A: Yes. A guardianship is only granted when a person is determined to be incapacitated and no lesser alternative to a guardianship exists.
Common alternatives include a General Durable Power of Attorney (alternative to guardian of the estate), a Health Care Power of Attorney (alternative to guardianship of the person), and/or a funded Living Trust (alternative to guardianship of the estate).
It is my belief that most people should have basic estate planning documents such as a Health Care Power of Attorney and a financial power of attorney. The only reasons to not have a power of attorney may be that there is nobody to name.
A guardianship may not be ideal, but the procedure protects individuals from being taken advantage of. However, if you trust certain individuals to make decisions that are in your best interest, then a health care power of attorney and a financial power of attorney are appropriate.
Do not forget to name successor agents. If an agent is unable to serve, and there is no available or designated alternate, then a guardian is needed upon your incapacity.
Q: Everybody tells me that I should avoid probate, why is that?
A: There are two main types of probate:
1. Probate while an individual is incapacitated – a guardianship (a living probate); and
2. Probate after an individual dies without avoiding probate (estate administration).
A: Every probate has three main issues:
1. Probate is expensive – court costs and attorney fees can add up – reducing the amount of resources of the individual or the individual’s beneficiaries;
2. Publicity – Everything is open to the public, including issues relating to incapacity (under a guardianship), and the beneficiaries and their respective shares (during an estate administration);
3. Time Consuming – Under a guardianship, it is not uncommon for certain expenses to be unpaid for as long as 3 months (think of utilities and facility bills being severely overdue). Under an estate administration, it is not uncommon for issues of how bills are to be paid or when beneficiaries will distributions.
Estate Planning FAQ (FOR OHIO):
Q: I have a Will, so that avoids probate, right?
A: Unfortunately, a Will (a "Last Will and Testament" is the same thing) does not "avoid probate". A Will is actually a part of the probate process. However, I am not saying that a Will is worthless. Believe it or not, the State of Ohio has already written your Will. You may not agree with it or like it.
For example, Ohio Law already determines who your default beneficiaries are, and who your default "administrators" are. Ohio Law even has a say on who the preferred guardians of your minor children are, too. If you like the way your Will has already been written by the state of Ohio, then you may be okay.
Reasons You May Want To Design Your Own Will:
(1) You may want to designate beneficiaries and their respective shares as you don't like the default designations under Ohio Law;
(2) You may want to designate who your Executor is;
(3) You may want to designate your preferred Guardian for your minor children; &
(4) You may want to WAIVE BOND for your executor/administrator (the default rule does not waive bond in every situation)
Q: Okay, I understand what a "Will" does and does not do, but how can I avoid probate?
A: As indicated in a prior answer, you can avoid probate. Probate can be avoided upon incompetency by having a health care power of attorney, a financial power of attorney, and/or a living trust.
Probate upon death becomes necessary for all items that do not automatically transfer upon death by designation, or contract.
A power of attorney or health care power of attorney are ineffective upon death.
Non exhaustive list of ways to avoid probate:
(1) A properly funded trust (re-read the last 4 words), can avoid probate (items not in the Trust, or not directed to go to the trust upon death, will require another affirmative step to avoid probate);
(2) Beneficiary designations (i.e. life insurance, retirement, etc.), however, be cautious that failing to update when necessary may make the designation ineffective;
(3) Payable on Death designations, however, be cautious that failing to update when necessary may make the designation ineffective;
(4) Transfer on death designation (particularly on automobiles and real estate), however, be cautious that failing to update when necessary may make the designation ineffective;
There are more options available, however, it is best to speak with a legal or financial processional to discuss the above options and their appropriateness. There may be tax and other legal considerations to consider.
Q: What if I have all of my estate planning documents prepared and I change my mind for some reason?
A: This is a good question. Just because your estate plan was what you wanted and appropriate at some point in the past does not mean you are unable to update it. You can update your plan as long as you have the capacity to do so, and you are not under undue influence.
I consider most estate planning documents to be similar to a dry-erase board (as opposed to being edged in stone). There are some documents that can not be changed - or not changed easily - such as an irrevocable trust. Outside of these exceptions, you can update beneficiary/transfer on death designations as well.
Laws change, family situations change, and your feelings change. I see no problem with your estate plan changing as necessary. Estate planning is not "one and done" unless that's how you want it to be. But, also realize, nobody can force you to sign something that is not what you want.
Q: Should I name backups to those I designate in my powers of attorney?
A: Absolutely - unless you do not have anybody else to name. I do not mean to sound too harsh, but most estate planning documents are planning for the worst case scenario. A named power of attorney may even decide they do NOT want to serve for any number of reasons. If there is no designated backup (or successor) then you may be in the same position as if you had NO power of attorney.
As indicated in my last answer, you can change your designations. Facts change. Do not forget, an agent may not be able to serve for good reasons, too.
You do not need to feel compelled to name somebody "because it may hurt somebody's feelings." I understand that, but you need to think about "who is best for the job" in making these designations (this can include who a potential trustee/successor trustee should be, and who an executor/successor executor may be.
Q: I need to get a particular estate plan because a close friend or family member has one. Can you do that for me?
A: This is a very common question - and I give almost the same answer every time. Your estate plan is "YOUR" estate plan based on your goals, your concerns, and your current situation. This may be a cliché, but there are no "simple" estate plans as each plan has to be tailored to "YOUR" situation.
Anybody can fill out a form with their personal information, but estate planning is more than just filing out forms. A competent estate planning attorney will be able to guide the conversation to craft a unique estate plan.
Also, do not forget, every family is different - from family dynamic, to priorities, and to financial situation. A plan may also be different exclusively on the types of assets. A plan may also be different because of conditions completely outside of anybody's control.
I do not have a problem with considering the estate plan of another person as justification for considering an estate plan, but you can not expect to be able to change the names and have an appropriate estate plan.
As another point, the opposite is true and is shocking. There are many stories in the news of famous people FAILING to take basic steps and their estates (by incompetency or death) are chaotic as a result. I have a good saying:
"It is easy to set most of these things up, but extremely difficult to go without them when you wish you had them."