Guardianships

March 5, 2014

New York Guardianship Cases Involve the Payment of Fees

A New York Guardianship proceeding involves the determination of the capacity of an individual. In order for a Court to appoint a property management Guardian or a personal needs Guardian there must be a finding of incapacity.

Article 81 of the Mental Hygiene Law (“MHL”) provides the statutory provisions for these proceedings. As discussed in previous posts in the New York Probate Lawyer Blog, the case is commenced by the filing of a petition with the Court along with a paper known as an Order to Show Cause. After the Court reviews the petition and finds it to be sufficient to start the case, the Order is then signed. The signed Order contains the date and place for the hearing and the names of persons appointed by the Court as Court Evaluator or attorney for the alleged incapacitated person.

There are a number of fees that are generally associated with Guardianship matters. After a Guardian is appointed, he may be entitled to receive a fee or commissions for carrying out his guardianship obligations. The judgment appointing the Guardian typically sets forth the manner by which such fees are to be computed. The judgment usually provides for fees that are to be paid to other individuals such as the attorney who represented the petitioner and the Court Evaluator or the attorney who represented the incapacitated person. It is common for the Court to direct that these fees be paid out of the assets owned by the incapacitated person.

There are some occasions when the petition for guardianship is denied by the Court or the matter may be discontinued by the agreement of the parties. In these situations the Court has the authority under MHL Section 81.09(f) to direct that the petitioner pay for these fees in addition to the alleged incapacitated person. In a recent Brooklyn Guardianship case entitled “Matter of Brice v. Wilks“, decided by Judge Kathy J. King on February 4, 2014, the Court directed that the petitioner pay the Court Evaluator’s fees after the petition was denied.

It is important for a person considering starting a Guardianship case to consult with a knowledgeable Guardianship attorney who can review the issues that are involved and explain the various fees and costs that may be incurred. Sometimes the facts of a matter may involve a risk that the petitioner could be held responsible for fees that are not otherwise expected.

February 5, 2014

New York Guardianship Cases Often Involve Allegations of Elder Abuse

by Jules M. Haas

Taking advantage of older persons for economic gain is not uncommon. New York Guardianship Lawyers are familiar with many cases where a person who is incapacitated due to a physical or psychological condition is misled and mistreated in order to obtain control of their finances.

Guardianship proceedings under Article 81 of the New York Mental Hygiene Law (“MHL”) often involve situations where a caretaker or close relative or friend misuses their authority through a durable power of attorney or other paper to obtain control or the transfer of a person’s assets. Sometimes these papers include a Last Will that is all of a sudden changed and disinherits the incapacitated person’s family in favor of the wrongdoer. A number of recent blog posts provide examples of this all too frequent occurrence. In a post by Liz Schumer on January 27, 2014 at SpringvilleJournal.com entitled “Elder fraud: one woman’s story, a nationwide epidemic“, the tragic story is told about a Chicago woman who suffered from Alzheimer’s disease. In this case various persons conspired to get a power of attorney and guardianship over the woman and estrange her from her daughter. The post describes how the wrongdoers manipulated the woman and provides an excellent set of circumstances that are indicators of the existence of elder abuse such as large withdrawals from bank accounts, changes in the person’s legal documents such as a Will or Power of Attorney and unusual financial activity that the person would not ordinarily engage in.

Another recent post appearing at OrlandoSentinel.com on February 8, 2014 by Rene Stutzman entitled “Jeno Paulucci heirs fight over $150 million“, describes a recent Court filing that alleges that a multi-millionaire businessman who was 93 years old, legally blind and in intensive care transferred control over most of his $150 million estate from his longtime attorneys to other confidants.

Both the New York Guardianship Courts and the Surrogate’s Courts review cases where relatives claim that they were wrongfully deprived of their inheritance or assets which were improperly taken from their incapacitated next of kin. These Courts have the ability under numerous statutes and case-law to undue the abuse that has occurred by voiding powers of attorney or deeds and bank account transfers or denying probate to a Last Will.

I have represented many individuals in proceedings where elder abuse has occurred and the Court is requested to remedy the situation. Guardianship courts such as the Queens Guardianship Court and Manhattan Guardianship Court are vigilant in protecting senior’s rights and providing a remedy for financial manipulation of a person’s assets.

January 15, 2014

New York Guardianships May Be Recognized In Other States Under New Law

by Jules M. Haas

The New York Mental Hygiene Law (“MHL”) provides in Article 81 for the appointment of Guardians for personal needs and for property management. MHL Section 81.04 entitled “Jurisdiction” provides that the Court will have the authority to provide relief for someone who is a state resident, or a non-resident that is located in the state or to assist a foreign guardian. MHL Section 81.05 provides that the guardianship proceeding shall be commenced in the county where the alleged incapacitated person resides or is actually present.

Under the present statutes, confusion and controversy often arose when an alleged incapacitated person moved or was taken out of New York to a different state since New York would lose its jurisdiction to determine the need for a Guardian even through the person had lived in New York during his or her life.

Additionally, while New York has its rules regarding Guardianship, other states have their own separate requirements and standards. The appointment of a Guardian in New York would not result in the Guardian having any authority to act in any other state. Therefore, a new guardianship proceeding would need to be commenced if the Guardian wanted to relocate the incapacitated person to another state.

Recently, New York changed its statute to adopt the Uniform Guardianship and Protective Proceedings Jurisdiction Act (“UAGPPJA”). This new law becomes effective in April 2014. The law provides a mechanism by which a state with a priority of contacts with an alleged incapacitated person would have the primary right to determine the need for a guardianship. Guardianship proceedings could be transferred between cooperating states. Also, states that have enacted this law would be able to recognize out-of-state guardianship determinations. This would eliminate the need to bring new proceedings if it was necessary to relocate an incapacitated person for family or health care needs.

Petitions for guardianship can be a complicated process. In many cases assets and family members are located in different states. If there is a dispute among those seeking a guardianship, the simple act of transporting an alleged incapacitated person from one state to another can disrupt the entire process and put the welfare of the disabled person at risk. The enactment of the UAGPPJA should help alleviate these problems.

December 25, 2013

New York Guardianship Proceedings Can Involve a Supplemental Needs Trust

by Jules M. Haas

The New York Probate Lawyer Blog contains previous posts concerning the benefits of a Supplemental Needs Trust. Briefly, a Supplemental Needs Trust (“SNT”) is a trust that allows assets to be held for the benefit of a person who is receiving governmental benefits such as Medicaid or social security disability. The maintenance of the trust fund will not interfere with or cause these benefits to be discontinued. The SNT trustee can use the trust to provide additional services or care for the SNT beneficiary over and above those provided by Medicaid or Social Security payments. New York Estates, Powers and Trust Law (“EPTL”) Section 7-1.12 provides the statutory provisions required for a trust to be qualified as a SNT.

As discussed previously, there are many situations in which a SNT can be established. For example, a person can establish a SNT in a Last Will to be funded upon death with the trust assets to be utilized for a person who is incapacitated or otherwise receiving governmental benefits. Another situation where a SNT is common is in connection with an Article 81 Guardianship. Instead of holding a person’s funds under the guardianship where the funds may cause Medicaid or other benefits to be discontinued or where the funds may be required to repay Medicaid claims, the assets can be placed in a Court approved SNT. Recently, in a decision by Nassau County Surrogate Edward McCarty III in Property of Alan Frederick Silverman decided on October 29, 2013 and reported in the New York Law Journal on December 16, 2013, the Court allowed the establishment of a SNT. In this case an incapacitated person for whom a guardian was appointed was the recipient of funds from the estate of his father. The guardian was allowed by the Court to create a SNT and to place the estate assets into the trust thus preserving them for the benefit for the incapacitated person.

I have represented numerous clients where a SNT was established in conjuction with the client’s appointment as the guardian of a person’s property and personal needs. Generally, the Courts are very receptive to creating these trusts since they afford incapacitated and disabled individuals the ability to afford services and care above those provided by governmental benefits.

November 20, 2013

A New York Guardianship May Be Allowed To Pay For Extraordinary Expenses For An Incapacitated Person

by Jules M. Haas

New York Guardianship for an incapacitated person is controlled by Article 81 of the Mental Hygiene Law (“MHL”). As discussed in previous posts, this statute contains the procedure for the appointment of a guardian as well as the powers that may be given to a personal needs guardian and a property management guardian.

Many of the guardian’s powers are clear and routine. For example, MHL Section 81.21 (Powers of a guardian; property management) provides that a guardian can marshall assets, pay bills that are reasonably necessary for maintenance of the incapacitated person and invest guardianship funds. The guardian’s powers are typically delineated in the Order or Judgment appointing the guardian and can vary from case to case depending upon the particular situation.

Guardianship cases may involve either old or young incapacitated persons. In many instances, a Guardianship is utilized for the benefit of an infant or younger individual who has suffered an injury that results in incapacity and has recovered a substantial sum of money in a lawsuit stemming from the events causing the injury. These events include automobile accidents or medical malpractice.

It is rather common that when an infant or child is injured and receives a large money award due to incapacitating injuries, the child continues to reside at home with his parents. Issues then arise as to what extent, if any, the guardianship funds may be utilized for the infant notwithstanding that a parent has a duty to support a minor child. Another issue that appears is to what extent can expenditures for the incapacitated child also result in a benefit for the child’s parents and other members of his household.

In a recent case entitled Matter of Sigal, decided by Judge Gary F. Knobel of the Nassau County Court on November 12, 2013 and reported in the New York Law Journal on November 22, 2013, the Court was faced with some of these issues. The co-guardians – parents of their incapacitated daughter sought reimbursement from guardianship funds for the costs of a bat mitzvah party and authorization to expend guardianship money for the cost of a vacation for their entire family and an aide. The Court reviewed the many applicable factors including a consideration of the preservation of guardianship funds, the financial ability of the parents to personally pay for these expenses and whether the costs were for necessities, treatment or for education. Based upon these factors and others the Court denied the request for reimbursement of the bat mitzvah party expenses but allowed some funds for the vacation. The Court was concerned that the guardians recognize that the guardianship funds were not for family use but must be preserved for the incapacitated person’s needs throughout her life.

I have represented many petitioners and parents in venues such as Manhattan Guardianship and Brooklyn Guardianship. The Courts routinely inquire as to the proper use of guardianship funds so that the interests of the incapacitated person is protected to the maximum extent possible. While some of these types of cases require the establishment of a Supplemental Needs Trust, the Courts will still require that the trustees exercise their fiduciary powers in accordance with these principals.

September 18, 2013

New York Guardianship Can Be Avoided by Using Advance Directives

by Jules M. Haas

A New York Guardianship proceeding under Article 81 of the Mental Hygiene Law (“MHL”) can be a very complex and sometimes lengthy process. The New York Probate Lawyer Blog has discussed in many posts the Guardianship process. The essence of the proceeding is a determination as to whether the alleged incapacitated person (“AIP”) is “incapacitated”. As provided in MHL 81.02 a finding of incapacity requires clear and convincing evidence that the AIP will be harmed because he cannot provide for his personal or property management needs and cannot adequately appreciate and understand the nature and consequence of his disability.

The Guardianship Court will be presented with a Petition and a Court Evaluator usually will provide the Court with a report and recommendations. A hearing will be held at which time testimony from parties and witnesses will be given and other evidence introduced. A decision and judgment issued by the Court finally determines whether a Guardian is appointed, and if so, the Court selects the Guardian and delineates the Guardianship Powers.

It is preferable, however, and if possible, for a person to prepare and finalize documents identified as advance directives that might obviate the need for a Guardianship. A Health Care Proxy is a perfect example as to advance planning whereby a person is named as an agent to make health care decisions if the principal or creator of the proxy is unable to do so. Similarly, a Power of Attorney allows a person to select other individuals to make property management decisions regarding many specified items such as real estate or business transactions or tax matters. These two documents, a Health Care Proxy and Power of Attorney, might avoid a long and costly Guardianship court case.

Another document that a New York Estate Planning Lawyer can assist with is a Living Trust. These trusts allow the creator to place all assets under the trust while maintaining full control as the Trustee over their disposition. However, provisions in the Trust can provide for a substitute Trustee if the creator becomes disabled or incapacitated. A Living Trust can also act as a substitute for a Last Will and typically provides very similar provisions for the disposition of the trust promptly upon the death of the creator.

While advance directives can be very helpful and may avoid the Guardianship process, all such documents may still be the subject of controversy and court proceedings. Just recently, Dutchess County Supreme Court Justice James D. Pagones decided a case entitled Matter of IMRE B.R. In IMRE a person had executed a power of attorney and Merrill Lynch refused to accept or honor the power. Merrill Lynch claimed that the principal might have lacked capacity to sign the power. A petition was then brought under the New York General Obligations Law Sec. 5-1510(2)(i) to compel Merrill to accept the power of attorney. After reviewing the allegations, the Court granted the petition to compel.

Estate and lifetime planning requires a consideration of a persons assets, desires and intentions and the effect these decisions may have on intended beneficiaries. The implementation of advance directives can provide an efficient and expeditious way to deal with circumstances such as incapacity and even a short-term disability. By expending the time and effort to provide these papers, the more cumbersome and lengthy Guardianship process may be avoided.

August 28, 2013

A New York Guardianship Court Evaluator is Entitled to Be Paid a Fee

by Jules M. Haas

Article 81 of the New York Mental Hygiene Law (“MHL”) contains the provisions regarding the appointment of a Guardian for a person who is incapacitated. The New York Probate Lawyer Blog has previously discussed that the statute provides powers for a Guardian for property management (MHL 81.21) and for personal needs (MHL 81.22).

In most Guardianship proceedings the Court will appoint a Court Evaluator (MHL 81.09). A Court Evaluator is named in the Order to Show Cause that is signed by the Court when the Guardianship case is commenced. The Court Evaluator’s job is essentially to perform an investigation of the case and prepare a written report and recommendation for the Court. This investigation and report concerns such issues as the incapacity of the person alleged to be in need of a Guardian, the nature of such person’s property and assets and who is the most appropriate person to be appointed as Guardian.

In many instances the time expenditures for a Court Evaluator to perform a full investigation, prepare a report, and attend all Court hearings can be quite extensive. This is especially so when the Guardianship proceeding is contested. A Contested Guardianship Proceeding can involve issues regarding whether the alleged incapacitated person actually needs a Guardian or there may be intra-family fighting as to which family member is most appropriate to be appointed as Guardian.

Regardless of the complexity of the case, the Court Evaluator is usually entitled to be paid a fee for the services incurred in performing the job. MHL 81.09(f) states that when the Court appoints a Guardian and grants the petition, the Court can award a reasonable fee to be paid from the incapacitated person’s assets. However, when the Guardianship application is denied, the Court may direct that a Court Evaluator’s fee be paid from the alleged incapacitated person’s assets and/or directly by the person who commenced the proceeding.

Sometimes, the alleged incapacitated person dies during the Guardianship case. In this circumstance, the statute provides that the Court may award a fee to be paid by the person’s estate and/or the petitioner. A recent case decided by Justice Alexander W. Hunter, Jr. (Supreme Court, Bronx County) entitled Matter of Soto, decided on August 2, 2013 and reported in the New York Law Journal on August 29, 2013, concerned this latter situation. In Soto, the Court had issued an Order and Judgment appointing a Guardian and had awarded a fee to the Court Evaluator. However, before the Guardianship actually commenced the incapacitated person died. Therefore, the Guardian could not pay the Court Evaluator’s fee. Thereafter, when the Court Evaluator made an application to the Court to have the petitioner personally pay the fee, the Court denied the application and directed the Court Evaluator to file a claim in the Surrogate’s Court against the incapacitated person’s estate for payment of the fees.

Guardianship cases can be very complicated and require the assistance of an experienced New York Guardianship Attorney. I have represented clients who have filed petitions to be appointed as Guardians for family members and friends. All aspects of these matters need to be considered including the necessary proof of incapacity and the manner in which expenses such as Court Evaluator’s fees are to be paid.

August 7, 2013

A New York Supplemental Needs Trust Can Preserve Estate Assets for an Incapacitated Person

by Jules M. Haas

A New York Supplemental Needs Trust (“SNT”) is a trust that allows trust funds to be available for a person who is receiving government benefits such as Medicaid or Social Security Disability (“SSD”). The governmental payments continue and are not reduced or terminated despite the existence of the trust fund. While the government sometimes may be entitled to claim a re-payment upon the death of the beneficiary, the beneficiary can utilize both the government and trust resources during life in furtherance of their quality of life.

A SNT is typically needed where a person is disabled or incapacitated and is the recipient of governmental assistance. New York Estates, Powers and Trusts Law (“EPTL”) Section 7-1.12 provides the statutory details as to the trust requirements. New York Estate and Guardianship Lawyers generally become aware that there are many different situations where a SNT can preserve assets to be used for incapacitated individuals. For example, there are situations where a person may be injured due to an accident or medical procedure and ultimately receive a large monetary award for the injuries they suffer. Sometimes the injuries also result in an incapacity that would allow the person to qualify for benefits such as Medicaid or SSD if they did not have any personal assets. In order to prevent the monetary settlement from disqualifying the person from receiving the benefits, the settlement proceeds can be placed into a SNT. The SNT trustee can then use the SNT funds in his discretion to provide additional care and benefits which are not provided through the government payments.

Many situations where a SNT is needed may involve Court proceedings such as Article 81 Guardianships in the Supreme Court or Estate Administration in the Surrogate’s Court. In these matters, the Court is asked to authorize and allow the creation of the SNT and the transfer of the funds to the SNT trustee. Court authorization allows the funds to pass directly to the trust and avoid having the incapacitated person receive these monies which would otherwise result in the disqualification or termination of the governmental benefits.

A recent case in the Nassau Surrogate’s Court is a typical example of the use and benefit of a SNT. Matter of Krushnauckas, decided by Surrogate Edward McCarty III on June 28, 2013, and reported in the New York Law Journal on August 8, 2013, concerned the estate of an individual, Adrienne, who died intestate leaving a daughter named, Michele. Michele was 56 years of age and was mentally retarded and was receiving governmental benefits in the form of Medicaid and Supplemental Security Income. Michele’s Property Management Guardian was the Public Administrator who requested that the Court approve a SNT for the approximately $400,000 estate distribution that Michele was entitled to receive. By placing the inheritance into the SNT, Michele’s Medicaid and SSI would not be affected. After reviewing the general benefits and reasons for establishing a SNT along with some issues regarding payback of benefits, the Court authorized the establishment of the trust.

The effective planning and use of a SNT in Article 81 Guardianship proceedings and Estate Settlement matters can create tremendous benefits and promote the quality of life for persons suffering from disabilities and incapacity.

May 22, 2013

New York Guardianship Can Be Contested or Based Upon Consent

by Jules M. Haas

New York Guardianship proceedings are controlled by Article 81 of the New York Mental Hygiene Law (“MHL”). The New York Probate Lawyer Blog has provided numerous posts regarding issues concerning this type of court proceeding.

The essence of a Guardianship proceeding is to determine whether the appointment is needed to assist a person with personal needs or property management. MHL Section 81.02(a)(2) provides that a Guardian can be appointed when the alleged incapacitated person (“AIP”) either “agrees to the appointment” or if the AIP is found to be “incapacitated”. In most proceedings, the determination of incapacity is the central focus of the Court hearing. The statute requires “clear and convincing” evidence to find incapacity. A court hearing involves many different participants which may include the petitioner (the person who commences the Court case), the AIP, a Court Evaluator, a Court-appointed attorney who represents the AIP, New York State Mental Hygiene Legal Service and the local Medicaid office such as the New York City Human Resources Administration. Also, family members and friends of the AIP may become participants if they intervene in the proceeding.

If the AIP opposes the appointment of a Guardian, the Court may hear the testimony of many witnesses and may review numerous documents with regard to its consideration of the necessity of an appointment. All of the aforementioned participants play an important role in the Court case and in providing the Court with all the information needed to make a final determination. In Contested Guardianship Proceedings, the Court wants to fully understand the situation and circumstances concerning the AIP so that it can assess whether the statutory mandate of “incapacity” has been shown.

It should be recognized that even in a case where “incapacity” is beyond dispute, the Court requires a hearing and the presentation of evidence regarding the need for the appointment. New York Guardianship Attorneys know that in such matters the Court will want to hear testimony from the petitioner and receive evidence of the AIP’s condition from a social worker or doctor or in some other acceptable form to document the basis for the Guardian’s appointment.

As noted earlier, MHL 81.02(a)(2) allows the appointment of a Guardian where a person consents to the appointment. Consentual guardianships appear to be the exception rather than the rule since there is always the issue as to whether the AIP has the capacity to make a knowing consent. However, there are occasions when the Court will find that consent is appropriate. Such was the situation in a recent case decided by Bronx Supreme Court Justice Alexander W. Hunter entitled “Matter of the Guardian for L.J.L.” decided on May 6, 2013 and reported in the New York Law Journal on May 17, 2013. In L.J.L. the Court held a hearing and recognized that Article 81 of the MHL does not provide any statutory guidance to assist the Court in deciding whether a person has the capacity to consent to a Guardian. However, after considering all of the evidence presented, the Court in L.J.L. found that the AIP had capacity to consent and appointed a Special Guardian of the person and property of the AIP for the limited period of one year.

March 13, 2013

A New York Guardianship Based Upon Consent Does Not Constitute Incapacity

by Jules M. Haas

Article 81 of the New York Mental Hygiene Law (“MHL”) is entitled “Proceedings for Appointment of a Guardian for Personal Needs or Property Management”. The New York Probate Lawyer Blog has published numerous posts regarding many different aspects of the Guardianship laws.

One of the main requirements for the appointment of a Guardian is that the Court must find that a person is “incapacitated” (MHL Section 81.02). However, the statute also provides that the Court may appoint a Guardian where a person “agrees to the appointment”. The vast majority of Guardianship cases typically involve a situation where a person is found to be incapacitated rather than just agreeing to such appointment. In fact, there appears to be sort of an inconsistency between having to declare someone to lack capacity while at the same time allowing them to consent or agree to have a Guardian.

Most recently, Justice H. Patrick Leis, III (Supreme Court, Suffolk County) confronted this issue in Matter of Buffalino which was decided on March 6, 2013 and reported in the New York Law Journal on March 15, 2013. In Buffalino, a person identified as “Mr. D.”, who had been suffering with brain cancer, consented to the appointment of a Guardian. At that time, the Court found that Mr. D had the capacity to agree to the appointment. Thereafter, Mental Hygiene Legal Service, on behalf of Mr. D., sought to discharge the Guardian and the Guardian sought to expand his powers and keep the Guardianship in place.

The Court recognized that Article 81 did not clearly define the test to be used to decide whether someone has the capacity to agree to have a Guardian appointed. The Court clearly recognized that determining capacity to consent is not the same as the full review required by a Court hearing to show incapacity and that a finding of capacity to consent does not automatically result in a determination of incapacity.

After reviewing all of the evidence presented, the Court in Buffalino decided that the current Guardian could not demonstrate that Mr. D. required a Guardian and, therefore, discharged the Guardian.

The Buffalino case shows the problems and limitations that may be encountered when a Guardianship is based upon the consent of the person who is disabled. There appears to be an absence of certainty and the long-term ability of the Guardian to act on behalf of the ward. Due to these limitations and the inherent difficulty of determining whether an alleged incapacitated person has at least enough capacity to consent, there are generally few cases where the Guardianship is allowed based upon consent.

Unfortunately, the necessity for a Guardian where a person lacks capacity pervades both the rich and less fortunate. Recent events have been reported concerning Guardianships for film stars Mickey Rooney and Zsa Zsa Gabor. Bill Hetherman reported on March 4, 2013 in the Daily News.com that a probate court judge allowed Mickey Rooney’s Conservator to sell his million dollar home. In an article reported in mydesert.com on February 24, 2013, it was reported that a Court extended the Conservatorship over Zsa Zsa Gabor.