Q: When Do I Need a Guardianship?

A:

The standard under which a person is deemed to require a guardian differs from state to state. And even within some states the standards are different, depending on whether a complete guardianship or only a conservatorship over finances is being sought. Generally a person is judged to be in need of guardianship when he or she shows a lack of capacity to make responsible decisions.

A person cannot be declared incompetent simply because he or she makes irresponsible or foolish decisions, but only if the person is shown to lack the capacity to make sound decisions. For example, a man may not be declared incompetent because he spends money in ways that seem odd to someone else. In addition, a developmental disability or mental illness is not, by itself, enough to have a person declared incompetent.

Guardianship and Conservatorship

Every adult is assumed to be capable of making his or her own decisions unless a court determines otherwise. If an adult becomes incapable of making responsible decisions due to a mental disability, the court will appoint a substitute decision maker, often called a “guardian,” but in some states called a “conservator” or other term. Guardianship is a legal relationship between a competent adult (the “guardian”) and a person who because of incapacity is no longer able to take care of his or her own affairs (the “ward”).

The guardian can be authorized to make legal, financial, and health care decisions for the ward. Depending on the terms of the guardianship and state practices, the guardian may or may not have to seek court approval for various decisions. In many states, a person appointed only to handle finances is called a “conservator.”

Some incapacitated individuals can make responsible decisions in some areas of their lives but not others. In such cases, the court may give the guardian decision making power over only those areas in which the incapacitated person is unable to make responsible decisions (a so-called “limited guardianship”). In other words, the guardian may exercise only those rights that have been removed from the ward and delegated to the guardian.

Incapacity

The standard under which a person is deemed to require a guardian differs from state to state. In some states the standards are different, depending on whether a complete guardianship or a conservatorship over finances only is being sought. Generally a person is judged to be in need of guardianship when he or she shows a lack of capacity to make responsible decisions. A person cannot be declared incompetent simply because he or she makes irresponsible or foolish decisions, but only if the person is shown to lack the capacity to make sound decisions. For example, a person may not be declared incompetent simply because he spends money in ways that seem odd to someone else. Also, a developmental disability or mental illness is not, by itself, enough to declare a person incompetent.

Process

In most states, anyone interested in the proposed ward’s well-being can request a guardianship. An attorney is usually retained to file a petition for a hearing in the probate court in the proposed ward’s county of residence. Protections for the proposed ward vary greatly from state to state, with some simply requiring that notice of the proceeding be provided and others requiring the proposed ward’s presence at the hearing. The proposed ward is usually entitled to legal representation at the hearing, and the court will appoint an attorney if the allegedly incapacitated person cannot afford a lawyer.

At the hearing, the court attempts to determine if the proposed ward is incapacitated and, if so, to what extent the individual requires assistance. If the court determines that the proposed ward is indeed incapacitated, the court then decides if the person seeking the role of guardian will be a responsible guardian.

A guardian can be any competent adult — the ward’s spouse, another family member, a friend, a neighbor, or a professional guardian (an unrelated person who has received special training). A competent individual may nominate a proposed guardian through a durable power of attorney in case she ever needs a guardian.

The guardian need not be a person at all — it can be a non-profit agency or a public or private corporation. If a person is found to be incapacitated and a suitable guardian cannot be found, courts in many states can appoint a public guardian, a publicly financed agency that serves this purpose. In naming someone to serve as a guardian, courts give first consideration to those who play a significant role in the ward’s life — people who are both aware of and sensitive to the ward’s needs and preferences. If two individuals wish to share guardianship duties, courts can name co-guardians.

Reporting Requirements

Courts often give guardians broad authority to manage the ward’s affairs. In addition to lacking the power to decide how money is spent or managed, where to live and what medical care he or she should receive, wards also may not have the right to vote, marry or divorce, or carry a driver’s license. Guardians are expected to act in the best interests of the ward, but given the guardian’s often broad authority, there is the potential for abuse. For this reason, courts hold guardians accountable for their actions to ensure that they don’t take advantage of or neglect the ward.

The guardian of the property inventories the ward’s property, invests the ward’s funds so that they can be used for the ward’s support, and files regular, detailed reports with the court. A guardian of the property also must obtain court approval for certain financial transactions. Guardians must file an annual account of how they have handled the ward’s finances. In some states guardians must also give an annual report on the ward’s status. Guardians must offer proof that they made adequate residential arrangements for the ward, that they provided sufficient health care and treatment services, and that they made available educational and training programs, as needed. Guardians who cannot prove that they have adequately cared for the ward may be removed and replaced by another guardian.

Alternatives to Guardianship

Because guardianship involves a profound loss of freedom and dignity, state laws require that guardianship be imposed only when less restrictive alternatives have been tried and proven to be ineffective. Less restrictive alternatives that should be considered before pursuing guardianship include:

Power of Attorney. A power of attorney is the grant of legal rights and powers by a person (the principal) to another (the agent or attorney-in-fact). The attorney-in-fact, in effect, stands in the shoes of the principal and acts for him or her on financial, business or other matters. In most cases, even when the power of attorney is immediately effective, the principal does not intend for it to be used unless and until he or she becomes incapacitated.

Representative or Protective Payee. This is a person appointed to manage Social Security, Veterans’ Administration, Railroad Retirement, welfare or other state or federal benefits or entitlement program payments on behalf of an individual.

Conservatorship. In some states this proceeding can be voluntary, where the person needing assistance with finances petitions the probate court to appoint a specific person (the conservator) to manage his or her financial affairs. The court must determine that the conservatee is unable to manage his or her own financial affairs, but nevertheless has the capacity to make the decision to have a conservator appointed to handle his or her affairs.

Revocable trust. A revocable or “living” trust can be set up to hold an older person’s assets, with a relative, friend or financial institution serving as trustee. Alternatively, the older person can be a co-trustee of the trust with another individual who will take over the duties of trustee should the older person become incapacitated.

For more information visit http://www.RaphanLaw.com or contact me at 212-268-8200 for a free initial consultation.

Regards,

Brian

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To Collect Debts, Nursing Homes Are Seizing Control Over Patients

The need to protect your assets is always at hand. Planning for long-term care with an elder law attorney can help protect your assets for the in home spouse and heirs. Medicaid Planning or Life Care Planning helps to ensure that you or your loved one get the best possible long-term care and the highest possible quality of life, whether at home, in an assisted living facility, or in a nursing home. The following article brings this issue to light.

Article via The New York Times: 

Photo credit: Piotr Redlinski for The New York Times

To Collect Debts, Nursing Homes Are Seizing Control Over Patients.

Lillian Palermo tried to prepare for the worst possibilities of aging. An insurance executive with a Ph.D. in psychology and a love of ballroom dancing, she arranged for her power of attorney and health care proxy to go to her husband, Dino, eight years her junior, if she became incapacitated. And in her 80s, she did.

Mr. Palermo, who was the lead singer in a Midtown nightclub in the 1960s when her elegant tango first caught his eye, now regularly rolls his wife’s wheelchair to the piano at the Catholic nursing home in Manhattan where she ended up in 2010 as dementia, falls and surgical complications took their toll. He sings her favorite songs, feeds her home-cooked Italian food, and pays a private aide to be there when he cannot.

Maybe it’s time for a geriatric care manager

Geriatric care

Why do we hear so much about geriatric care management these days? It’s because there are so many benefits they can provide to seniors and care givers. Let’s first clarify the term: A professional Geriatric Care Manager (GCM) is a health and human services specialist who helps families who are caring for older relatives. The GCM is trained and experienced in any of several fields related to care management, including nursing, gerontology, social work, psychology, and logistics of health care and often finances relating to the elderly. They are trained to assess, plan, coordinate, monitor and provide services for the elderly and their families. Although not lawyers, they are often aware of legal issues elders may be soon facing.

The benefits to you, the child or care giver of the elder range from saving time (vetting out various needs), saving money (knowing financial pitfalls of some decisions in advance), making better care decisions (with insight from someone who has seen it all) and most importantly –reducing stress.  The stress of being alone in the decision making process, relief of now being informed about your various options and what may be right for the specific needs of the elder, ranging from doctor decisions, how to provide care, assisted living, home care and nursing care options. Doing it alone takes an enormous amount of time, energy, resources and self reliance.

According to Gladys Harris Geriatric Care Manager of The Olive Group, you may need a Geriatric Care Manager if:

•    A person has limited or no family support available

•    Family has just become involved with helping the individual and needs direction regarding available senior services

•    A person has multiple medical or psychological issues

•    A person is unable to live safely in his / her current environment

•    Family is either “burned out” or confused about care solutions

•    Family has a limited time and / or expertise in dealing with loved one’s chronic care needs

•    Family is at odds regarding care decisions

•    Individual is not pleased with current care providers and requires advocacy

•    Individual is confused regarding his / her own financial and / or legal situation

•    Family needs education and / or direction in dealing with behaviors associated with dementia

Gladys is a recommended resource of ours and helps families and elders in New Jersey. They offer a unique combination of compassion, knowledge, a ‘can-do’ attitude and a wide range of services which also include:

Solution Focused Counseling: Life transitions are a common reason for counseling. We focus on empowering individuals to find solutions in their life by figuring out what a person’s goals are, and supporting them to find ways to achieve those goals.

Care Coordination: Our holistic assessment includes a physical, psychological and social functioning evaluation of the older adult, as well as a home safety inspection. Based on the assessment, we will develop a customized client care plan to identify private and public resources available to support the older adult. We coordinate the support systems needed to keep the older adult safe and happy at home.

Wellness Monitoring: Regular visits with the older adult to help ensure that they receive the best care available. During our visits we ensure older adults are receiving help with things that they want done, computer skills, organize photos, plan family events, etc.

Accessibility Issue Resolution: Aging-in-place often requires making changes to the home to help maintain independence.  This may be de-cluttering, home improvements, home safety inspection

Relocation Services: We support families during transitions from home to another location or facility.   These services include cleaning, de-cluttering, downsizing, and setting up in the older adult’s new home.

Cost savings is also a key component to good geriatric care management. You can learn more about it and find out more about the range of services by clicking here: www.TheOliveGroup.llc.com

Regards,

Brian

Three Reasons Why Joint Accounts May Be a Poor Estate Plan

Many people, especially seniors, see joint ownership of investment and bank accounts as a cheap and easy way to avoid probate since joint property passes automatically to the joint owner at death. Joint ownership can also be an easy way to plan for incapacity since the joint owner of accounts can pay bills and manage investments if the primary owner falls ill or suffers from dementia. These are all true benefits of joint ownership, but three potential drawbacks exist as well:

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  1. Risk. Joint owners of accounts have complete access and the ability to use the funds for their own purposes. Many elder law attorneys have seen children who are caring for their parents take money in payment without first making sure the amount is accepted by all the children. In addition, the funds are available to the creditors of all joint owners and could be considered as belonging to all joint owners should they apply for public benefits or financial aid.
  2. Inequity. If a senior has one or more children on certain accounts, but not all children, at her death some children may end up inheriting more than the others. While the senior may expect that all of the children will share equally, and often they do in such circumstances, there’s no guarantee. People with several children can maintain accounts with each, but they will have to constantly work to make sure the accounts are all at the same level, and there are no guarantees that this constant attention will work, especially if funds need to be drawn down to pay for care.
  3. The Unexpected. A system based on joint accounts can really fail if a child passes away before the parent. Then it may be necessary to seek conservatorship to manage the funds or they may ultimately pass to the surviving siblings with nothing or only a small portion going to the deceased child’s family. For example, a mother put her house in joint ownership with her son to avoid probate and Medicaid’s estate recovery claim. When the son died unexpectedly, the daughter-in-law was left high and dry despite having devoted the prior six years to caring for her husband’s mother.

Joint accounts do work well in two situations. First, when a senior has just one child and wants everything to go to him or her, joint accounts can be a simple way to provide for succession and asset management. It has some of the risks described above, but for many clients the risks are outweighed by the convenience of joint accounts.

Second, it can be useful to put one or more children on one’s checking account to pay customary bills and to have access to funds in the event of incapacity or death. Since these working accounts usually do not consist of the bulk of a client’s estate, the risks listed above are relatively minor.

For the rest of a senior’s assets, willstrusts and durable powers of attorney are much better planning tools. They do not put the senior’s assets at risk. They provide that the estate will be distributed as the senior wishes without constantly rejiggering account values or in the event of a child’s incapacity or death. And they provide for asset management in the event of the senior’s incapacity.

They provide that the estate will be distributed as the senior wishes without constantly rejiggering account values or in the event of a child’s incapacity or death. And they provide for asset management in the event of the senior’s incapacity.  To download a FREE GUIDE TO ESTATE PLANNING click here.

For more information about this article feel free to email me at info@raphanlaw.com

Regards, Brian

Why Not Just Use an Off-the-Shelf Power of Attorney Form?

poaA durable power of attorney is one of the most important estate planning documents you can have. It allows you to appoint someone to act for you (your “agent” or “attorney-in-fact”) if you become incapacitated. Without a POA, your loved ones would not be able to make decisions for you or manage your finances without asking the court to appoint a guardian or conservator, which is an expensive and time-consuming process.

There are many do-it-yourself power of attorney forms available; however, it is a good idea to have an attorney draft the form for you. There are many issues to consider and one size does not fit all.

The agent’s powers

The power of attorney document sets out the agent’s powers. Powers given to an agent typically include buying or selling property, managing a business, paying debts, investing money, engaging in legal proceedings, borrowing money, cashing checks, and collecting debts. They may also include the power to consent to medical treatment. Some powers will not be included unless they are specifically mentioned. This includes the power to make gifts and the power to designate beneficiaries of your insurance policies.

The power to make gifts of your money and property is a particularly important power. If you want to ensure your agent has the authority to do Medicaid planning on your behalf in the event you need to enter a nursing home, then the power of attorney must give the agent the power to modify trusts and make gifts. The wording in a power of attorney can be significant, so it is necessary to consult an attorney.

Springing or immediate

The power of attorney can take affect immediately or it can become effective only once you are disabled, called a “springing” power of attorney. While a springing power seems like a good idea, it can cause delays and extra expense because incapacity will need to be determined. If the power of attorney is springing, it is very important that the method for determining incapacity is clearly spelled out in the document.

Joint agents

While it is possible to name more than one person as your agent, this can lead to confusion. If you do have more than one person named, you need to be clear whether both parties need to act together or whether they can each act independently. It might make more sense and be less confusing to name an alternative agent to act in case the first agent is unable to.

Appointing a guardian

Another use of a power of attorney can be to nominate a guardian in case guardianship proceedings become necessary. Including your preference for a guardian can allow you to have some say over who will be managing your affairs. Usually, the court decides who will be chosen as a guardian, but in most circumstances, the court will abide by your nomination in the durable power of attorney.

Executing the power of attorney

To be valid a power of attorney must be executed properly. Some states may require a signature, others may require the power of attorney to be notarized, and still others may require witnesses. It is important to consult with an estate planning attorney in your state to ensure your power of attorney is executed properly.

Accepting a power of attorney

Even if you do everything exactly right, some banks and other institutions are reluctant to accept a power of attorney. These institutions are afraid of a lawsuit if the power of attorney is no longer valid. Many banks or other financial institutions have their own standard power of attorney forms. To avoid problems, you may want to execute the forms offered by the institutions with which you have accounts. According to a MarketWatch.com article, you need to be careful that you don’t sign a bank’s document that inadvertently restricts a power of attorney’s ability to deal with other assets, and you should check that any documents you sign with a bank match the original power of attorney.

For more information on the subject, visit this section on our website.

Regards, Brian A. Raphan, PC