SPOUSAL RELATIONSHIPS

Tom O'Brien

This is an article written for the WSBA Continuing Legal Education seminar on Advanced Guardianship Issues, March, 2001

Guardianships in which the incapacitated person (IP) has a living spouse are almost by definition complicated. A marriage is the most intimate relationship this culture has. A guardian of a spouse is uniquely interposed into this relationship. It is the norm that should one member of a married couple be incapacitated, the other member will manage with no need of additional legal authority, and certainly without the involvement of a third party. The guardian of one member of a couple is cast in a somewhat confusing role in which there are unique conditions imposed on the usual relationship between guardian and ward.

1. Judgment Standard

Washington Professional Guardian Certification Standards of Practice sets out the following priorities:

All decisions and activities of the guardian shall be made according to the applicable decision standard.

2.1 The primary standard is the Substituted Judgment Standard. This means that the guardian shall make reasonable efforts to ascertain the incapacitated person's historic preferences and shall give significant weight to such preferences. Competent preferences may be inferred from past statements or actions of the incapacitated person.

2.2 When the competent preferences of an incapacitated person cannot be ascertained, the guardian is responsible for making decisions which are in the best interests of the incapacitated person. A determination of the best interests of the incapacitated person shall include consideration of the stated preferences of the incapacitated person.

Ordinarily, a guardian is thought to have a fiduciary duty exclusively to the ward. However, the guardian must settle just debts and otherwise recognize and respect such legal obligations or relationships as the ward has; including the relationship to a spouse.

In a situation in which the estate is strictly community property a guardian will usually assume that the IP’s competent preferences will be to support the needs and preferences of a marriage partner.

In a situation in which there is separate property, the guardian must consider the reasons the IP had to maintain this arrangement. Often, this is done in order to allow transfers to heirs other than the spouse upon death of the IP. The guardian must be mindful, however, that competent persons do change these arrangements as their own and their spouses situations change. If the guardian is able to rely upon statements of the IP in making decisions of this sort, the guardian’s job is made easier. Once again the Standards of Practice offer guidance

6.2. The Certified Professional Guardian shall manage the estate with the primary goal of providing for the needs of the Incapacitated Person.

6.3. In certain cases, Certified Professional Guardian shall consider the needs of the Incapacitated Person's dependants for support and maintenance, provided appropriate authority for such support is obtained in advance.

2. Term of Marriage

2.1. Long term 
Generally speaking, long term marriages generate fewer problems related to property division. Issues related to care and payment for care, and difficult family dynamics tend to predominate. See below regarding Medicaid issues.

2.2. Late marriage 
The later in life a person marries, the more likely there is to be separate property. A guardian can sometimes make some inferences from the behavior of the couple in this situation. For example, when parties to a late marriage may have made the effort to convert all assets to community property; parties to a relatively long term marriage may have maintained some separate assets.

2.3. IP wishes to marry 
On rare occasions, the IP will want to get married. In situations in which a marriage seems likely to occur, the guardian needs to consider what to do to maintain separate property (or not) and whether there ought to be a prenuptial agreement. The competence of the IP to consent and the possibility of financial exploitation can also become issues. Also, the guardian and IP may need to deal with Medicaid issues and family dynamics. Like any other marriage, the marriage of the IP can be a happy event, or it can be one that is undesired by the family or guardian. In the latter case, and especially when the IP retains some capacity, the law and our cultural values do not support interference with the marriage itself, but do permit a guardian of the estate to exercise prudence.

3. Spouse’s Situation

A guardian is generally only appointed for one member of a marriage community when for some reason the more usual arrangement is unworkable. Examples include situations in which one spouse, while perhaps not legally incompetent, is impaired; when the couple is estranged or the unimpaired spouse is taking undue advantage of the other; when a spouse acting in good faith is simply not qualified to carry out the fiduciary duties of a guardian; or when family dynamics are such that a neutral third party is needed.

3.1. Spousal support issues 
If the couple’s arrangements prior to the incapacity of the IP included significant reliance on the IP’s separate assets or income, these arrangements cannot be simply ignored. If the assets are all community, the claims of the spouse on the assets and income to the couple must be included in making care and other arrangements. This is discussed further below. In situations in which the combined assets of the couple are sufficient for their combined needs, the court usually approves financial arrangements as necessary to accommodate the situation. When it is necessary to rely on public entitlements, the Medicaid rules permit transfers of assets in the best interests of the couple.

3.2. Spouse significantly disabled 
If the guardian believes the spouse not to be fully capable of managing, the guardian is placed in an awkward position. As suggested above, normally, the competent spouse usually manages on behalf of the couple when one is impaired. A corollary to that may be that a guardian of one spouse should manage for both when the presumptively competent spouse is not so in fact. The guardian has the same access to bank accounts, for example, as would a member of a marriage community.

It sometimes occurs that both parties to the marriage meet the legal criteria for a guardian, but that one spouse is much more likely to contest a guardianship petition. Appointing a guardian for one spouse can be an effective and reasonable way to proceed, although care should be taken in crafting the orders so that the guardian has sufficient access to assets and authority to spend time or money assisting the non-adjudicated spouse. The non-adjudicated spouse often seeks to avoid being labeled as a person in need of assistance, but with skill and patience on the part of the guardian, will accept help "through the back door". Counsel should not, however, assume that this will be effective in every case. If it appears that there will be protracted difficulties gaining access to assets or in making suitable care arrangements for both spouses, then the legal incapacity of the non-adjudicated spouse will need to be addressed.

3.3. Conflicts of interest between IP and spouse

Scarcity of resources 
The least desirable situation is one in which there is, in effect, a "zero sum game"; that is in which there are insufficient resources to provide for the optimal care or preferences of both spouses. The inclination of a guardian is to adopt the position that the IP comes first, and this is often the appropriate approach. However, the competent preferences of the IP and what is considered normal behavior among spouses sometimes means that the IP is the one to sacrifice. This is how marriage works.

Estranged couples 
The unimpaired spouse may not be willing to act in the best interests of the IP. This is often because the couple may have had a poor relationship for some time. In some cases, the competent spouse takes an essentially predatory approach to the couples assets. Examples include converting community assets to separate or advocating nursing home placement when home based care is most appropriate. Some of the legal strategies are reviewed below. It is important to respect the point of view of the spouse, even when there are adversarial relationships. No one chooses to be in a failed marriage. Very often, the spouse has legitimate reasons to lack fidelity to the ward. The ward may have been abusive or neglectful. The spouse may be facing severe financial problems. The spouse may be overwhelmed by conflicting emotions and pressures; and not entirely able to approach the issues at hand in a detached, totally rational manner. Alone, either the developing incapacity of a spouse or the mounting pressures of a failed marriage are enough to strain a person to the breaking point. The combination of these effects can be crazy-making.

3.4. Unrealistic expectations by spouse 
It is quite common that the spouse will have an incomplete understanding of the effects of the appointment of a guardian, or of the alternatives available to the IP. There may be a belief that costs of care will be forthcoming from a munificent government, that the guardian can simply order the IP to change difficult behavior, that the guardian will automatically institutionalize the IP or that the spouse will be thrown into the street. One of the challenges of the newly appointed guardian is to overcome anxieties or impatience on the part of the spouse, who has almost by definition been through a very stressful experience.

4. Family

The management of a guardianship is profoundly connected with family and family dynamics. All cultures evolved from and revere family bonds; in our politics "family values" are in the first rank of permanent political icons.

The first choice of nominees for guardian are family members, and only for cause are non-family ordinarily appointed. It is also common that when a professional guardian is appointed, that a family member is also appointed as co-guardian. Most such appointments work well.

No guardian should ever ignore the attitudes or preferences of family. Family members, no matter how troublesome or inappropriate, remain parties to the guardianship and must be shown respect by the guardian.

Family dissatisfaction with the conduct of a guardian will nearly always be taken seriously by the court, even when the family’s concerns appear to be poorly conceived, and sometimes when the court has granted advance authority for the guardian’s actions. The guardian should be aware that in the event that the family disputes the actions of the guardian there is a reasonable likelihood that professionals or the court will seek a new guardian, if not different authority, in an effort to placate family. This will sometimes result in appointment of a "neutral" third party professional guardian or in a change from one professional guardian to another. These changes may appear to have little relation to the appropriateness of the guardian’s activities, or little likelihood of success; the implicit value is that the pursuit of family harmony is of highest importance.

Nevertheless, the guardian may not prejudice the interests of the IP.

4.1. Heirs 
The guardian’s duty is to the IP. Strictly speaking, the guardian has no more duty to heirs than would the IP, if competent. The guardian is bound to respect the testamentary plans made by the IP, and should avoid actions that would disrupt the IP’s stated or implicit preferences for intergenerational transfers.

A common bias among professionals is against family members who are perceived to have an excessive interest in their inheritance; and any interest at all is often considered excessive. This is not entirely reasonable. Most families have a rough knowledge of the testamentary plan of an elder, and it is human nature to be interested in such things. When an unexpected legal event such as the creation of a guardianship occurs, it is not unreasonable that family members will calculate the effect on themselves. For example, many well educated people wonder if creation of a guardian means that the estate will then escheat to the state. If a family member does not ask, s/he will not know that this is not the case. People who disclose an interest in their inheritance stand out: we tend to be very good at concealing such interest. There is a tendency to believe that a person is only interested in the money when this interest is simply an item in a list of other reasonable concerns.

4.2. Family disharmony

Many guardianships come about because of significant disagreements or inappropriate behavior within the family. One of the most difficult aspects of these cases is that the IP and the spouse are nearly always caught in the middle and are subject to various forms of manipulation or influence.

The "no bad guy" disharmonious family It is not at all uncommon for a professional guardian to be appointed in a case in which family members are intent on litigating over which member is appointed. Usually, there are accusations on both sides of financial abuse, physical abuse, or the like; accompanied by ad hominem statements such as "He’s only interested in the money" or "She never visited till now". Upon investigation, the guardian often discovers that, good faith errors in judgment aside, there have been minor or no misdeeds; and all members of the family appear to act perfectly reasonably except in one another’s presence.

The spoiler. Very often, family disharmony is generated by one member of the family, usually a son or daughter of the IP, who is financially abusive, emotionally abusive or otherwise very disruptive.

The falling out among thieves. There are families in which there is general agreement on the principal that the elder’s wealth or goods should be taken, but who disagree over the division. Sometimes, seeking a guardianship is a tactic that the petitioner believes will provide an advantage in the contest; or when a person, not aware of the significance his or her own transgressions, casts the first stone.

4.3. Late marriage, adult children, adult step-children 
These constitute a large proportion of cases in which there is family disharmony. All of the factors that can lead to problems converge: interpersonal problems, concerns over inheritance, separate property and spousal support issues to name but a few. Adult children of divorce may have long simmering resentments against the biological parent. They may regard the new step-parent as nothing more than a gold-digger, particularly when there is an age difference; and this is sometimes reasonable. They may have held long standing assumptions about inheritances which are suddenly, and ambiguously, challenged. They tend to react very strongly against efforts by step children of the IP seeking to be appointed guardian.

Step children or the new spouse have an incentive to convert separate property into community, or even transfer ownership to the new spouse. Since such conversions are often made mutually and with the competent consent of both spouses, understanding and evaluating transactions prior to the appointment of guardian can be vexing.

Step children who observe abuse or neglect of their new step parent by the biological children and try to take action are invariably accused of having wrongful motivations.

In the center of the vortex of emotion and pecuniary interest are the couple, usually seeking to remain on good terms with all and dealing with the disability of the IP.

5. Home as Separate Property

The home is the most significant assets most people own. When the home is owned as community, many of the considerations listed below will apply.

5.1. Couple living at home. 
When the couple live together in the home, the guardian is faced with a fairly typical situation of managing finances and care. There are often no special considerations. When the IP owns the home, the spouse’s judgment may be clouded, however. The spouse may resist provision of care, even home based care, fearing that this is a prelude to putting the IP "in a home", causing concern that the spouse will lose access to the home. In estranged relationships, the spouse may inappropriately advocate placement out of the home when home based care is practical.

5.2. IP in Care Facility, Spouse at Home 
This is among the more difficult situations, particularly when some of the more unfortunate family dynamics are at work.

The first job of the guardian is to determine whether placement out of the home is appropriate. If not, the guardian must consider what obstacles exist to a return home, which is, by far, the most likely preference of an IP. Obstacles may include the costs of home based care (which can far exceed facility costs) or the unwillingness of the spouse to lose privacy. As noted above, it is sometimes very difficult to make these judgements in the context of a marriage.

The guardian’s duty to the IP may result in an adverse relationship with the spouse if the spouse has undue expectations or claims. On the other hand, sometimes the best thing to do, following the appropriate judgment standard, is to accept a less than optimal care situation in favor of an arrangement that nets the greatest benefit to the couple as a whole.

5.3. Community Lien 
Even though a house is titled as separate property of one spouse, the couple’s behavior may have created a valid claim by the non-owner spouse. Such behavior includes the non-owner contributing wages or savings to monthly mortgage payments, taxes, remodeling or the like. Assigning appropriate value to such claims is complicated. The period over which payments were made, amounts paid, discount rates, rent values, and the effect of other arrangements made by the couple are sample considerations.

6. Other Separate Assets

6.1. Separate income 
Pension and other income may or may not be community property depending on the term of the marriage, the marital status at the time benefits were earned and the rules that apply to the particular benefits. It is often not a priority to determine whether income is joint or separate, and the guardian is not necessarily obligated to do so. This does become a consideration when, for example, a spouse is making claims of a community lien or a claim for support that the guardian considers to be invalid

6.2. Large separate estates 
Generally, a couple’s lifestyle is geared to their combined assets, whether held separately or together. Living arrangements and, especially, future plans may come under close scrutiny in the context of the disability of one spouse and court intervention. For example, a couple who own a home together may be planning a major remodel using separate funds of the husband when the wife has a serious stroke and is in a facility or near death. Should the new guardian go ahead with the plans? The spouse of a wealthy person may be accustomed to or been "promised" arrangements that come as a challenge to the middle class values held by most guardians and counsel. This can truly be a diversity issue and needs to be regarded in that light; especially when the conclusion appears to be that a spouse is overreaching. Even after such review the conclusion may be that, indeed, the spouse is overreaching.

In any such guardianship the guardian must closely examine tax matters, investment portfolios, real estate holdings, insurance coverage and a host of other issues. Not all large estates have been prudently managed, and a guardian often considers making changes. When there are spousal and family interests in these decisions, the guardians must exercise even greater care.

All of the family and legal problems discussed in this section tend to be magnified in the presence of significant wealth.

6.3. Personal property issues 
There can be disputes over whether art work, china furniture or other personalty are community or separate property. These disputes can be particularly acute when there are adult children or step children. Such disputes are best left to the administrator of the probate estate, but sometimes must be managed, for instance when the couple is relocating and it is reasonable to distribute or sell un-needed property

7. Medicaid

Medicaid is a resource to pay the full costs of nursing home care, Adult Family Home and other facility based care; or, through the COPES program, some of the costs of home based care. Medicaid is a resource and income sensitive program which requires that recipients be, basically, in absolute poverty. Medicaid rules are somewhat liberal in the ability of applicants to transfer assets to a spouse, exclude the home and other assets from resource calculations and to give assets to others in order to become impoverished. Due to these provisions, Medicaid is a middle class program that is available to people in certain circumstances. Medicaid can provide payment towards a limited amount of home attendant care, and can pay the full costs of care in an Adult Family Home or a nursing home.

7.1. Transfers of assets or income to spouse 
Under Medicaid rules all of the resources of the couple are considered whether they are community or separate property and without respect to prenuptial agreements.

Income that comes in the name of the spouse of a Medicaid recipient is not considered. If the income of the spouse is less than $1,407, some of the applicant’s income may be transferred to the spouse. This transfer amount can often be increased as high as $2,175. A court order which assigns even greater amounts to the spouse will be respected by Medicaid, if done properly.

Up to $87,000 in financial assets my be transferred to the spouse. Funds in excess of this amount may sometimes be used for purchase of an annuity benefitting the spouse.

The value of a home is never considered as long as the spouse is in the home or the IP may return to the home. In some circumstances, the house can be transferred outright to the spouse.

7.2. Medicaid Gifting 
Medicaid rules address transfers of assets beyond the amounts allowed to the spouse. Such transfers result in a period of ineligibility for a period that depends on the amount of the transfer. If done properly, a gift of up to $8,953 results in one month’s ineligibility for Medicaid. An IP of means who is in a nursing home can transfer a significant amount of wealth in this way. However, it should be considered unusual that a person of means would be in a nursing home. Using the applicable judgment standard usually directs the guardian in the direction of privately paid and home based care, if resources are available. There is, of course, no universal rule on this and, as stated above, there are circumstances in which the IP is best served via institutional care, or when such care is, on balance, a reasonable compromise.

Also, gifts must leave the marriage community, assets of the spouse remain subject to the limits described above. Gifts are usually to other family members.

8. Family Law

Many of the matters discussed above - distributions of personal property, separation of assets, spousal support - resemble the process of dissolving a marriage. Most guardians try to avoid creating this appearance. However, as with any marriage partner, an IP may become involved in dissolution proceedings. Also, it is sometimes considered prudent for the marriage partners to agree to a financial separation in order to maximize public or other benefits.

8.1. Financial Separation
A financial separation is created by the same legal process and has the same effect as the financial portion of a divorce, however the marriage remains intact: the couple remains a couple. A financial separation may be pursued in order to transfer assets or income in excess of the Medicaid allowances to the spouse so as to qualify the IP for Medicaid. It may also be sought to insulate the spouse from liability for the future costs of care of the IP. It may be used as a vehicle by which to separate assets and transfer the IP’s share into a Special Needs Trust.

Once again, the guardian needs to exercise care to assure that such arrangements will actually accrue to the best interest of the IP.

9. Divorce

Although it may be obvious that a couple is estranged and that the marriage is effectively over, the guardian will rarely do more than suggest to a spouse that dissolution of the marriage is worth considering. The guardian, or the guardian's attorney, may even suggest distribution terms, so that the spouse is aware of his/her choices. But if the spouse is unwilling to terminate the marriage this will almost always be respected.

In many cases, a spouse's unwillingness to pursue a separation stems from a belief that there is financial advantage to maintaining the marriage.

Couples sometimes choose to maintain a marriage in order to preserve pension or insurance benefits. Unless there is some genuine inequity involved, it is reasonable to respect arrangements of this sort.

Even though it may be quite clear that in living and financial arrangements the spouse and IP are estranged, the spouse may not wish to dissolve the marriage. The guardian in this instance can seek authority from the guardianship court that effectively mimics a separation. In pursing an equitable use of the assets of an estranged couple, the considerations will often be almost identical to those involved in distributing property in the course of a dissolution.

9.1. Prenuptial agreements 
Occasionally, a person who is married and has a prenuptial agreement becomes subject to guardianship. Prenups may contain provisions that contemplate incapacity. Most prenups address what is to be done in the event of a dissolution.

If an IP wishes to marry, especially if the IP is a person of means, the guardian should promptly seek direction from the court as to whether a prenup should be created.

10. Investigation/Remediation 
When there is reason to believe that the rights or best interests of the IP have been infringed the guardian is invariably directed to review the circumstances and make recommendations. The guardian will usually hope to avoid focusing on wrongful behavior if the guardianship estate can be restored to proper order. The guardian may, however, need to have recourse to legal remedies.

10.1. Recent conversions of separate assets to joint 
Conversions of this sort can occur when the spouse is acting in good faith. If the IP had been the one to handle the finances, but was unable to do so due to disability, the spouse’s efforts to take charge may have included becoming listed on bank accounts or other assets, causing them to become community property. Bank tellers or family members may have assisted in this process. Conversions can also result from outright overreaching by the spouse, often with help from friends or family.

10.2. Financial abuse 
It is not unknown that a spouse or family transfer funds so egregiously that no good faith explanation will suffice. Examples are quit-claims of real property without consideration, large and uncharacteristic cash gifts or uncharacteristic spending on luxury items.

10.3. Physical abuse or neglect 
Very often, the spouse has been in control of the care of the IP prior to appointment of a guardian. If the spouse is impaired or poorly motivated, or is just clueless, the IP may not have gotten proper medical attention, been psychologically abused, been isolated from family or experienced other forms of abuse or neglect. Cases in which the spouse is not amenable to correcting these problems require considerable care.

10.4. IP treated as if deceased 
Sometimes the guardian will detect an attitude that the assets of the IP are available in the same manner as in a probate. Spouse and family discuss openly the distribution of personal belongings and also significant financial assets with an assumption that the IP no longer needs things or money. This attitude tends to be very supportive of placement out of the home. This attitude is often accompanied by problem behavior such as conversions of assets, or problems arranging appropriate care.

10.5. Marginalization of care issues 
All of the parties in a guardianship should beware of situations in which appropriate improvements in the day to day life of the IP are put on hold pending resolution of legal disputes. An IP’s situation may be susceptible to great improvement using available funds, but is held in the status quo pending resolution of legal or financial problems.

Check List for problem situations