Once again, why Guardianship should be avoided if possible

I just returned from court trying to do very simple, very acceptable gifting technique between a spouse not in the nursing home and a spouse in the nursing home and on Medicaid and over which there is a guardian.  The hearing did not go well.

If you have read my posts for any length of time, you know that a common technique is to transfer the home from both spouses to the well spouse to protect it, to allow the well spouse to sell and to go to the heirs if the well spouse dies first with a properly worded last will and testament.  We do it routinely by having the spouse in the nursing home sign or using the Power of Attorney to sign the deed for the transfer.

However, Arkansas law says that every financial transaction has to be approved by a judge.  Arkansas law also says that transfers or gifts of property can only be done if it is advantageous to the ward (person who is incapacitated).  I could not apparently argue sufficiently that this transfer to the spouse was advantageous to the ward.  Now, the house will sit for the use of the well spouse.  If he chooses to sell the property, we will need court approval and the judge will then make sure that the sale is for full fair market value and I am not sure what the judge will do with the proceeds of the sale.  This is not a good place to be.

Non-elder law attorneys will suggest a guardianship at the first mention of any problems with an elderly person.  However, in many instances, there was no need for a guardianship if there was a Power of Attorney in place.  We do Powers of Attorney for the purpose of having a method to take care of business when the person becomes incapacitated.  By doing a Power of Attorney, it saves a tremendous amount of time, effort and expense and not doing one could cause you to lose your entire estate.  Please seek the advice of a competent attorney that understands all of the issues with guardianships and their full implications before utilizing that option.

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