There are three primary methods for managing your personal care and property if you become incapacitated. Each method has its advantages and disadvantages. A comparison of these will hopefully clarify which approach is best for you.
Precisely discussing costs is difficult, but we can give you a general idea of what you can expect to pay. Costs of an uncontested guardianship will start at approximately $2,000.00 for court costs and attorney fees. Uncontested means that neither the person who is requesting to serve as the guardian nor the issue of whether the guardianship is necessary is disputed. If the guardianship is contested, the attorney fees will considerably increase. Another major cost of a guardianship involves the bond that the guardian has to post. Conversely, as an agent under a POA or a trustee of an RLT, one generally does not have to post bond, which is a savings in itself.
Attorney fees for a durable POA generally start at approximately $150.00. There are no probate court costs. There may be a nominal fee to record the POA in the county recorder's office, however, if recording the document is appropriate in your case, which in most cases it is not.
Attorney fees and recording costs for setting up a simple funded RLT will start at approximately $2,000.00. Although no probate court costs are involved in setting up an RLT, trust companies do charge fees for their ongoing trust services if you choose a financial institution as trustee. Because fees for RLT’s vary widely depending upon the nature and extent of your property, costs for RLT’s are the most difficult to estimate.
Another difference involves accountability. A guardianship is a public proceeding, while POA’s and RLT’s are private arrangements. This can be both good and bad. Because a guardianship is a public proceeding, a judge declaring you incompetent may be humiliating for you and your family. Not that the judge is going to shout his decision from the courthouse roof, but the probate files are public documents that any person can read. You may not want just anyone to have access to your personal and financial information. Also, your guardian will have to submit an inventory to the court disclosing the nature and extent of your assets and subsequently account to the court for every expenditure made on your behalf. Again, this may not be information that you want publicly disclosed.
At the same time, however, the accountability required of a guardian or institutional trustee can be good. When you set up a private arrangement like a POA or RLT that does not require any account, your agent or trustee may take advantage of your finances. A retired probate judge here in Ohio believes that senior citizens, under the financial management of their relatives, would find that a good thirty percent of the time, their relatives will steal funds from them. He bases his opinion upon his twenty years of experience as judge, during which he found that one-third of the guardians for minors took financial advantage of their wards and used the ward's money for the guardian's benefit. This occurred even when the guardian was required to account to the court. You may never have this problem if you carefully choose your agent or trustee, but you should know that it could happen at a time when you are helpless to do anything about it.
Generally a guardianship is established because an incompetent person has not made other arrangements for his or her care. Someone, whether a family member or other interested party, has to come forward and ask the court to be appointed as guardian. Ohio law does not say who that person should be; the law only says that it must be an interested party. Therefore, the court may appoint a guardian who you would not otherwise choose. Also, if your family disagrees about who should be chosen as your guardian, a family dispute could increase the court costs and cause friction in the family. This is in contrast to having a POA or an RLT in which you have chosen the person who you want to act on your behalf. You can, however, choose your guardian in a POA if you like the guardianship concept.
Another difference involves residency requirements. Because a guardianship is a court proceeding, court rules must be followed. One rule is a residency requirement. As previously mentioned, your guardian must be an Ohio resident and, preferably, a resident of the county in which you reside. Although, there are no residency requirements for an RLT or POA, residency may be a practical consideration. Your agent or trustee living in reasonable proximity to you would probably be more convenient for both of you.
Another difference involves the amount of money that you have. A guardianship may be terminated if the value of the estate becomes less than $10,000. No minimum amounts are necessary for a POA or an RLT, however. In fact, the less you have, the more you need a POA.
Another difference involves a guardian's scope of authority. Guardians have been given certain powers by the laws of the state of Ohio. Beyond those laws, the guardian must look to the probate judge for authority to act on your behalf. In contrast, the authority of your trustee or agent primarily depends upon the document creating the relationship. In many cases, the trustee and agent have more freedom to act.
A final difference involves continuity. If you have signed a POA or an RLT, your agent or trustee can step in and provide management and care for you right when you need them. A guardianship is obviously not as speedy because a court proceeding is involved.
The best way for you to choose what is best for you is to sit down with your attorney and review the unique circumstances in your life. Because everyone is different, the team at Roberson Law cannot prescribe a particular plan for you before knowing more about you, just like a doctor cannot prescribe medication before knowing the nature and extent of your illness.
At Roberson Law, our main goal is to give you the most thorough advise so that you can best provide for your needs and the needs of your family if you become disabled or mentally incompetent. Call our office and schedule an appointment to discuss your needs with one of our experienced professionals.