Q. My husband suffers from dementia and we have significant expenses for care in the home. In order to help with these expenses, I’ve been thinking about selling our vacation property which we no longer use or cashing in one of his annuities. I would also like to set up a Living Trust and make Wills. The problem is that my husband can’t sign the necessary legal documents. Unfortunately, he does not have a Durable Power of Attorney which would allow me to sign for him. Is there some way to overcome this problem?
A. Yes. There is a legal procedure whereby you can petition the superior court to make an order that takes the place of your husband’s signature. It is called “Substituted Judgment” and involves petitioning the court for an order that, in essence, substitutes the court’s judgment for your husband’s. The resulting court order would then be accepted in lieu of your husband’s signature by title companies, banks, insurers and others. It could also authorize the creation of estate planning documents for both of you. This could be a perfect solution to your problem. For a married person, a formal conservatorship is not required to invoke this procedure.
Upon your petition, the court will assess your husband’s situation to determine whether the proposed order seems reasonable under the circumstances and whether, if granted, your husband’s interests will be protected and his ongoing needs for support and care met. If the court is satisfied, an order will then usually be made in accordance with the petition. Often, the court’s decision is based upon your written petition and the written report of the court-appointed Guardian, and is frequently made without a formal hearing. Once granted, you would then be free to engage in the transactions and planning that you propose.
This procedure is designed to provide the necessary consent for a particular transaction or series of transactions which involve, primarily, community property. However, the procedure has even broader application and can also be used to help you handle other legal matters for him, such as the following: creating, modifying or revoking a Living Trust, making a will, making gifts, selling real property, arranging a loan, exercising options under life insurance, annuity policies and/or retirement plans, and for other purposes. In our practice, we have used the Substituted Judgment procedure very effectively to assist with asset preservation strategies and Medi-Cal planning for long-term care.
By the way, the Substituted Judgment procedure is also available to unmarried individuals, albeit in the context of a full-blown conservatorship, which typically requires ongoing court management and associated legal proceedings for the remainder of the incapacitated person’s lifetime. By contrast, for a married couple, the procedure is much more streamlined and the court’s powers are invoked by a petition which usually is resolved in one proceeding.
As you imply, had your husband previously signed a Durable Power of Attorney (DPOA) with adequate powers when he had full mental capacity, his DPOA might then have been used to achieve your goals. However, in situations such as yours, the Substituted Judgment procedure can be a very powerful tool to overcome legal impediments associated with incapacity.