## Facts

- Dorothy C. Hollenga, an elderly widow with a substantial estate, executed a durable power of attorney (POA) in October 2003 naming her neighbor, Daniel J. Cook, as attorney-in-fact, effective only upon a physician’s finding of incapacity.
- The attorney who prepared the POA testified Hollenga was competent when she signed it.
- In December 2003, proposed estate guardians petitioned to set aside the POA; the trial court denied that petition and also denied temporary guardianship.
- In February 2004, despite the POA remaining intact, the trial court appointed three individuals as co-guardians of Hollenga’s estate rather than Cook.
- In May 2005, Hollenga suffered a fall; on June 15, 2005, physicians determined she was incapacitated, triggering the POA’s effectiveness.
- The estate guardians then filed a second petition to set aside the POA, alleging incompetence and undue influence at execution.
- The trial court issued an order directing the co-guardians to disregard the POA, then entered an order revoking it on the theory that Hollenga had lacked capacity in 2003.
- Cook did not receive notice before his authority was nullified; the estate guardians argued he was not a party and thus not entitled to notice.
- Cook sought to intervene; the trial court later found Cook unfit to serve as guardian of Hollenga’s person and appointed Hollenga’s niece and great-niece as guardians of the person.
- Hollenga and Cook appealed the estate-guardianship appointment and the orders disregarding/revoking the POA.

## Issues

1. Whether the trial court abused its discretion by appointing co-guardians of the estate instead of the person designated as attorney-in-fact in an unrevoked durable POA, absent findings of statutory disqualification or good cause.
2. Whether the trial court erred by disregarding and revoking the POA without providing the attorney-in-fact notice and an opportunity to be heard and without an adequate statutory basis for removal.

## Decision

- The Court of Appeals of Indiana reversed the trial court’s appointment of co-guardians of Hollenga’s estate.
- The court held the trial court abused its discretion by bypassing Cook’s statutory priority as designated attorney-in-fact while the POA had not been set aside and Cook had not been removed for good cause or disqualified.
- The court held the trial court improperly disregarded and revoked the POA without following statutory procedures and without affording Cook notice and a meaningful opportunity to be heard.
- The court remanded with instructions to appoint Cook as guardian of the estate unless the trial court finds good cause for removal or a statutory disqualification.
- The court also directed the trial court to proceed with an accounting and to consider a supervised guardianship if appropriate to protect the estate.

## Legal Principles

- When a principal has executed a valid durable POA, Indiana guardianship law requires the court to give primary consideration to the named attorney-in-fact in selecting a guardian.
- The attorney-in-fact should be appointed guardian unless the court finds statutory disqualification or good cause to remove or bypass that nominee.
- A court may not effectively nullify an attorney-in-fact’s authority through guardianship orders without following statutory requirements and providing notice and an opportunity to be heard to the affected attorney-in-fact.
- Guardianship appointments that depart from the statutory order of preference require supported findings justifying the departure.

## Conclusion

The appellate court required the trial court to honor the statutory priority of the attorney-in-fact designated in a durable power of attorney and to provide procedural fairness before stripping that person of authority, reversing the estate-guardianship appointment and remanding for appointment of Cook absent disqualification or good cause, along with an accounting and possible supervised guardianship.


In re Guardianship of Hollenga, 852 N.E.2d 933 (Ind. Ct. App. 2006)