Life Care Planning Guardian’s duty versus personal philosophy regarding public benefits

Sandra W. Reed
Sandra Reed

Marjorie is her mother Eunice’s guardian. Eunice’s physician has recommended placing Eunice in a long-term care facility with a memory unit due to her dementia. Based on Eunice’s income and countable resources, she would qualify for Medicaid.

Marjorie, however, is philosophically opposed to Medicaid, consistently voting for political candidates who promise to limit Medicaid. Based on her beliefs instead of applying for Medicaid, Margorie sold Eunice’s home to pay for the nursing home expenses. Was Marjorie acting within her responsibilities as Eunice’s guardian?

Whose philosophy determines application for Medicaid?

The philosophy of the competent client toward seeking public benefits, rather than that of the attorney, governs. The attorney assisting in estate planning should neither talk a client out of seeking benefits because the attorney doesn’t approve of them, nor force a client to seek benefits the client opposes. Similarly, the philosophy of the ward while still competent governs rather than that of the guardian. In this instance, Eunice had never voiced an opinion regarding Medicaid while she was competent. Presently, she is not capable of deciding whether to seek these benefits, so Margorie, as her guardian must decide.

Acting on personal philosophy regarding public benefits may violate guardian’s duty

Marjorie has a fiduciary duty to take all reasonable action to preserve the ward’s assets. In selling the house, she invites an action for breach of fiduciary duty. At least one case has found a guardian liable for doing what Marjorie did. See In In re Guardianship of Connor, 525 N.E. 2d 214 (Ill. App. 1988).

In addition, Marjorie has an obligation as guardian to preserve her mother’s estate plan. Eunice’s Last Will and Testament left her estate to her three children in equal parts. Selling the house potentially deprives heirs of their inheritance. With proper planning, Marjorie should have applied for Medicaid and executed a Lady Bird Deed in favor of herself and her siblings.

The Lady Bird Deed would take the property out of the estate and, thus, prevent it from being subject to the Medicaid Estate Reimbursement Program (MERP) for the benefits paid out in Eunice’s behalf. Upon Eunice’s death, Marjorie and her siblings would own the home as tenants-in-common. They can retain the property or sell it and divide the proceeds, as Eunice intended in her will.

Sandra W. Reed practices Elder Law in Somervell County, handling probating of estates, drafting of wills, trusts, powers of attorney and deeds as well as estate and Medicaid planning.  She lives on beautiful Chalk Mountain and can be reached at (254) 7970-0211; (817) 946-2809 or at sreed@kbzlaw.com.