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Important Information Regarding New York Guardianships and Supplemental Needs Trusts

Article 81 of the New York Mental Hygiene Law (MHL) is entitled “Proceedings For Appointment of a Guardian for Personal Needs or Property Management”.   Under this statute, a Guardian can be appointed for a person who is found to be incapacitated.

A determination regarding incapacity must be based upon clear and convincing evidence (MHL § 81.02).   In most Guardianship cases, the Court will review the functionality of the alleged incapacitated person (AIP). This means that there will be an examination of the AIP’s ability to handle activities of daily living such as the ability to handle finances, shop, cook, take care of personal hygiene and other ordinary daily activities.A Guardianship case requires that a petition for the appointment of a Guardian be filed. Thereafter, once the Court accepts the case, it is scheduled for a hearing. The Court needs to hear testimony from witnesses and the petitioner and also wants to see the AIP, if possible, before determining whether there is incapacity and the selection of a Guardian.

In many Guardianship cases, the incapacitated person may be entitled to receive assets that have a substantial value. This may be problematic if the person is receiving governmental benefits such as Medicaid or social security disability benefits. The acceptance of these assets, such as a recovery from a personal injury lawsuit, may cause the governmental benefits to stop being paid until the assets are expended. The New York Probate Lawyer Blog has discussed this situation in earlier posts.

In order to retain governmental benefits while at the same time have the personal injury or other assets available for an incapacitated person’s use, it may be possible to create a Supplemental Needs Trust to hold the assets. When a Supplemental Needs Trust (SNT) is created the personal injury recovery or other assets can be placed into the SNT. This will prevent benefits such as Medicaid from being cut-off. The SNT Trustee can use the SNT funds to provide additional care for the person who lacks capacity and may need these extra services.

In James v. W. Sterling Realty, decided by Brooklyn Supreme Court Justice Francois Rivera on May 8, 2018, the Court directed that an SNT be created by a Guardian to hold the monetary damages from a personal injury lawsuit that were to be received by the incapacitated individual.   The Brooklyn Guardian had been appointed and was required by the Court to establish the SNT as part of the approval of the personal injury settlement.

I have represented many persons in Guardianship cases and the establishment of a Supplemental Needs Trust. Call me now for a free review if you have a question regarding a New York City Guardianship case or a SNT.

New York Guardianship attorney, Jules Martin Haas, has helped many clients over the past 30 years resolve issues relating to Guardianship in New York, including Queens and Nassau Counties. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.

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