When your parents become unable to manage their own affairs—whether because of dementia, accident or illness—you may have to become their legal guardian. Guardianship—or conservatorship, as it's called in some states—turns over full control of their money to you. You control their investments, give them an allowance, and can even decide whether to sell their house.
Some state restrict guardianship to specific powers: Parents who can't manage their money might still be competent to decide where they want to live, so their guardian's power would reflect that.
A guardian's obligations
As a guardian or conservator, you’re obligated to use your parents' money for their needs, not your own. You also assume responsibility for their care, health and safety and that they enjoy all “personal, civil and human rights” they’re entitled to, as Alaska law puts it.
If you’ve become your parents' caregiver, guardianship has advantages over a power of attorney. It’s much harder to revoke a guardianship, which gives you more authority to protect your parents from a scheming lover or a con man. If your parents are already incapacitated—by an accident, say—it may be the only way you can obtain the power to help them.
Voluntary guardianship
If your parents realize they can’t mange their own affairs, they may give their consent to your guardianship. In that case, you file the necessary papers with a court, which will supervise you and make sure your actions are in your parents' best interest.
Even if your parents need your help, this takes a lot of trust, because they’re giving up a lot of control over their lives. They might worry you’ll exploit your power for your own profit, or put them on a tight budget so that you’ll inherit a bigger estate. One way around such fears would be to appoint you as co-guardian with a second person, someone they trust who is not in line to inherit anything.
Involuntary guardianship
Your parents may not admit they can’t handle their affairs, or they may be so far gone mentally they can’t give you authorization. In that case, you will have to petition the court for an involuntary guardianship. This will not be easy.
The default assumption is that anyone over 18 is competent to take care of themselves, so if you want involuntary guardianship, the burden of proof is on you. Even if your father is blowing his retirement fund to gamble and take girlfriends on luxury vacations, foolish spending isn’t grounds for the courts to give you control of his checkbook. If your parents are even minimally competent, the chance of securing guardianship is slim—and the chance of alienating your parents by trying is very high.
Competency hearings
To secure involuntary guardianship requires a court hearing to determine competency. Your expenses will include an attorney and possibly psychiatrists, social workers and investigators to review the case and evaluate your parents. You’ll receive guardianship if the court finds your parents can’t make informed decisions on personal or financial matters and that failure to appoint a guardian would create an unreasonable risk to your parents' health and safety.
Even if the judge decides to appoint a guardian, the judge isn’t required to give you that power, or even a member of your family. And you will have to make regular reports to the court to make sure you’re not abusing your authority.
