Articles Posted in Guardianships

The Times Herald recently published an article on caring for a child with special needs after your death.

Parents or guardians of special-needs children, or adult children living at home, need to plan for the eventuality of the child’s care after their passing. A New York City probate lawyer or guardianship attorney can assist you by outlining the various options. Among the variables and factors for consideration are the size of the estate left behind and the person’s needs.

An Article 81 Guardianship can permit you or someone else to care for an adult with special needs and empower you to make the decisions necessary to assist with day-to-day life, including medical and health care needs.

Estate planning becomes particularly important, both to make sure that available assets are left to care for a loved one with special needs and to make sure the appropriate safeguards are in place for the management of those funds for the best interest of the child.

In many cases, you must also concern yourself with not making a person with special needs ineligible for federal medical care and other benefits. Failure to establish a Special Needs Trust or other vehicle for life insurance proceeds and other inheritance can have devastating consequences. A Special Needs Trust is a legal entity, which can manage and disburse money to a child with disabilities, without making the child ineligible for federal benefits, such as Medicaid.

Continue reading

A New York Health Care Proxy can be a valuable part of an estate plan. It provides the means by which someone can appoint an agent to make health care decisions on their behalf in the event they are not able to make these decisions for themselves.

New York Public Health Law sections §2980 through 2994 provide the statutory guidelines for the New York Health Care Proxy. The law defines a “health care proxy” as “a document delegating the authority to make health care decisions, executed in accordance with the statutory requirements.” The statute further provides that “a competent adult may appoint a health care agent…”

The Health Care Proxy form must be “signed and dated by the adult in the presence of two adult witnesses” and “the witnesses must also sign the proxy”.

While the designation of a health care agent seems fairly straight forward, the actual appointment and utilization of the proxy can involve many complications. For example, the statute requires that the person creating the proxy be competent. Quite often, the issue of a person’s competency regarding the execution of a health care proxy is raised in an Article 81 Guardianship Proceeding where questions can arise concerning the validity of the appointment made by the alleged incapacitated person. Section 81.29 of the Mental Hygiene Law allows a Court to “modify, amend or revoke” a previously signed Health Care Proxy if the Court finds that it was made when the person was incapacitated or if there has been a breach of fiduciary duty by the agent. Public Health Law Section 2992 also provides a procedure for the commencement of a Court proceeding to determine issues such as the validity of the proxy or to have the agent removed or to override the agent’s health care decisions.

Complications may also appear when the health care agent attempts to exercise his or her authority on behalf of the appointing person. In Stein v. County of Nassau, 642 F. Supp.2d 135 (E.D. 7/23/09), a Federal District Court was called upon to review various aspects of the proxy statute. As reviewed by Daniel G. Fish in the New York Law Journal on August 20, 2010, Mr. Stein signed a Health Care Proxy and appointed his wife as his agent. When he became ill at home, his wife called for emergency assistance and she instructed that the ambulance to transport Mr. Stein to the hospital where he had been previously treated. Despite Mrs. Stein’s presentation of the signed proxy, the emergency personnel refused her request to go to the hospital she designated and claimed that the Health Care Proxy was not valid outside of a hospital-like setting. The Court found, as part of its decision, that the Health Care Proxy was valid everywhere and not just in a hospital-like setting.

Continue reading

New York Administrators and Executors, also known as fiduciaries, have many responsibilities with regard to administering an estate and their relationship with estate beneficiaries. Very often, due to a fiduciary’s acts or failure to act or a conflict of interest, beneficiaries ask the Court to disqualify a fiduciary or to revoke their Letters of Administration or Letters Testamentary. However, such a request to the Court requires specific allegations for the Court to actually disqualify a fiduciary.

Such was the case in a recent decision by Bronx County Surrogate Holzman in Estate of Maria Minelli, New York Law Journal August 31, 2010. In Minelli, one of the decedent’s sons asked the Court to revoke the Letters of Administration that had been issued to his sister. The son claimed that his sister had fraudulently transferred real estate that had been the subject of an Article 81 Guardianship proceeding regarding the decedent. The son also claimed that his sister was involved with a fraudulent application to the New York City Department of Social Services.

After reviewing the evidence, the Court denied the son’s application to revoke his sister’s Letters of Administration and found that there was “no evidence to support the bald, conclusory allegations …” Since removal of a fiduciary is a significant act, the Court will always require very specific and clear evidence upon which to base its decision. While the removal of an Administrator or Executor may occur, the Court needs to have a strong foundation to support such relief.

The Minelli case also points to the interaction between Article 81 Guardianship proceedings and the administration of a decedent’s estate. It is common for many issues relating to property transfers and asset ownership to be investigated and determined in a Guardianship proceeding which may occur many years prior to the death of the incapacitated person. Therefore, it is important to fully examine and resolve these matters in the Guardianship case. If property is wrongfully transferred or disposed of at the time of the Guardianship proceeding, it may be too late to resolve these issues years later when the incapacitated person dies.

Continue reading

There are many situations where a person who is disabled has assets available for his or her present use or may be in the position to receive assets at a later date such as a beneficiary under a Last Will or Trust.

While owning assets is usually beneficial, persons suffering from disabilities are often recipients of, or are qualified to receive, government benefits such as Medicaid or Supplemental Security Income. As a result, a conflict arises because the ownership of assets typically disqualifies a person from receiving the governmental benefits that would otherwise pay for the services that the private funds would be expended on.

In a perfect world a planner would want the disabled person to receive the maximum benefit from governmental resources and preserve or reserve the private and personal assets to spend on extras items and services that the government does not provide.

A Supplemental Needs Trust (SNT) can provide a mechanism whereby someone who is disabled can be the recipient of both government benefits and private assets. Truly the best of both worlds.

New York Estates, Powers and Trusts Law Section 7-1.12 provides the statutory requirements for the creation of these trust fund agreements. Paragraph (a)(5) of the statute defines a Supplemental Needs Trust as “a discretionary trust established for the benefit of a person with a severe and chronic or persistent disability (the “beneficiary”) which conforms to” the statute’s guidelines.

The rules and intricacies for the establishment and use of a Supplemental Needs Trust can be complex. For example, the trust can be set up in the Last Will of a parent or other individual who wants to benefit the disabled person without interfering with the payment of governmental benefits. Another example of the use of a SNT is in a situation when the person who is disabled is the recipient of funds from a personal injury action or inheritance. A Court, in the context of the settlement of the action or within an Article 81 Guardianship Proceeding, may allow the establishment of the SNT so that the assets can be available during the person’s lifetime to provide added benefits and improve his or her quality of life and the activities of daily living. In these Court created trust situations, the assets remaining in the trust following the death of the disabled person may be subject to a lien to reimburse the government for benefits it had previously paid.

Depending upon your situation, a Supplemental Needs Trust can be very useful in any plan for the care and benefit of a person with disabilities. It is important to carefully examine each situation so as to avoid trust disputes at a later date such as government claims that the assets are not protected.

Continue reading

Issues concerning the title and ownership of assets will appear time and again in the areas of estate planning, estate settlement and guardianship.

When evaluating and planning an estate or Last Will, it is essential not only to know the assets that an individual may own, but also the manner in which they are owned or titled. A Last Will essentially controls the disposition of assets that are held by a person in his or her name alone. However, there are numerous alternative types of ownership such as joint tenancies and “In Trust For” accounts also known as Totten Trusts. Other assets such as life insurance policies or retirement accounts (IRA’s, 401K’s) may have designated beneficiaries. These alternative ownership types of assets pass upon death to the other named owner or designated beneficiary. This alternative transfer is typically referred to as having the asset pass by “Operation of Law”. These assets are not controlled by the Last Will.

A person’s estate plan must reflect the actual ownership of the assets. If a provision in a Last Will provides for the disposition of an asset in a certain way and that asset is transferred in a different manner by operation of law, the decedent’s estate plan will be disrupted and estate settlement can be complicated by conflict and litigation. Such was the result in In Re Estate of Flaherty, a case decided by the 3rd Dept Appellate Division (883 NYS2d 812, 2009). In Flaherty, the decedent purchased property and had the deed recite that a one-half interest of the property was owned by one of her daughters and her son-in-law and the other one-half was in the name of the decedent, as joint tenants with rights of survivorship. Upon the death of the decedent the daughter and the son-in-law contended that the decedent’s half interest in the property passed to them by operation of law as the surviving joint tenant. The decedent’s estate contended that the decedent’s one-half interest was not jointly owned with the daughter and son-in-law, but passed separately to the decedent’s estate to be paid to a different beneficiary. Ultimately, the Court found that the property interests were joint and passed to the daughter and son-in-law and not under the decedent’s Last Will.

Property rights and interests are also an important consideration in Article 81 Guardianship Proceedings. A property management Guardian may be faced with issues such as the validity of a joint owner’s interest in property or a beneficiary designation on a life insurance policy or retirement plan. Additionally, in the event joint assets or other assets that would pass upon death by operation of law need to be liquidated during the Guardianship to pay debts or transferred for Medicaid planning purposes, the property interests of the joint owners or beneficiaries need to be considered and accounted for.

Continue reading