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Articles Posted in Mental Incapacity

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.

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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.

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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.

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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.

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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.

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