Guardianships

September 12, 2012

New York Guardianship Proceedings Concern Guardianship for Personal Needs and Property Management

New York Guardianship Lawyers are often asked by clients as to the type of Guardianship that is needed concerning an alleged incapacitated person (“AIP”). The New York Probate Lawyer Blog has discussed many instances where the Court has appointed a guardian for both the person and property of the AIP. In fact, in a Manhattan Guardianship, Queens Guardianship, Brooklyn Guardianship or any other county, the Court typically appoints the same person as both property management and personal needs guardian. New York Mental Hygiene Law (MHL) Section 81.22 concerns personal needs powers and Section 81.21 concerns property management.

While most Guardianship proceedings are initiated by a petition filed by a family member such as a spouse or child, many times the guardianship case is started by a hospital or nursing home. Sometimes, the local social services department starts the case after it receives information from Adult Protective Services that a person may be at risk.

A nursing home or hospital may file a Guardianship petition with the Court because a family member fails or refuses to do so and the institution needs to be paid. Payment may require a Guardian to either access the AIP’s assets or make an application for Medicaid.

The situation described above presented some interesting issues in a Long Island Guardianship case recently. In Matter of Restaino, decided by Justice Arthur M. Diamond (Supreme Court, Nassau County), on August 29, 2012 and reported in the New York Law Journal on September 7, 2012, an extended care facility filed a Nassau County Guardianship case seeking to be appointed only as property management special guardian for property so it could apply for Medicaid for the AIP to pay for the AIP’s care. It was the facilities’ view that it did not need to ask the Court for the appointment of a personal needs Guardian since the Family Healthcare Decisions Act would provide a mechanism for the AIP’s son or the facility to make health care decisions for the AIP.

The FHCDA came into existence in 2010 and provides a priority list of persons who would have authority to make health care decisions for incapacitated patients.

After reviewing the FHCDA the Court determined that the appointment of a personal needs Guardian was necessary since the act did not provide the extensive authority for the decision maker and protection for the AIP that was given to a personal needs Guardian. The Court ultimately appointed the extended care facility as special Guardian of the property and the AIP’s son as Guardian of the person.

As a Guardianship attorney, I work closely with my clients who are family members or friends of an AIP to determine the best course for having the Court appoint a Guardian. While sometimes there is a contested Guardianship, most often, families and friends pursue Guardianship so that the AIP’s personal and property affairs can be kept in order and decisions can be made in the best interest of the person who is incapacitated.

August 1, 2012

A New York Alleged Incapacitated Person Cannot Be Forced to Testify

by Jules M. Haas

A New York Guardianship proceeding requires a hearing before the Court. Mental Hygiene Law (MHL) section 81.11 states, in part, that “a determination that the appointment of a guardian is necessary for a person alleged to be incapacitated shall be made only after a hearing.”

MHL Section 81.02 provides that the appointment of a Guardian must be based upon “clear and convincing evidence.” Typically, at such hearings, individuals who have had personal contact with the alleged incapacitated person (“AIP”) can testify as to their observations as to the AIP’s ability to engage in activities of daily living. Such testimony can also relate to various events that have occurred concerning the AIP such as the AIP forgetting where he or she lived or experiencing hallucinations. These types of events may indicate a loss of capacity.

The guardianship attorney for the petitioner usually calls these witnesses to testify in Court and can present other evidence in the form of documents that may show incapacity such as unusual transfer of assets. Of course the AIP has a right to oppose the petitioner’s request for Guardianship. As provided in MHL 81.11 the AIP can call his or her own witnesses, be represented by an attorney and cross examine witnesses.

In some cases, especially where there are few third party witnesses to the AIP’s activities, a petitioner may want to have the AIP testify to demonstrate to the Court that the AIP lacks capacity. By using in-court testimony, the petitioner can try and show that the AIP lacks the ability to understand or appreciate his or her medical or personal needs or is unable to demonstrate the ability to recall or handle finances. These situations have resulted in a controversy as to whether the AIP, like a criminal defendant, has the right to refuse to testify against him or herself.

The recent case of Matter of G.P., decided by Judge James D. Pagones of the New York State Supreme Court, Dutchess County on July 26, 2012, involved this issue. Judge Pagones determined that since the appointment of a Guardian resulted in the loss of certain individual freedoms and liberties, such as making medical decisions and determining where to live, an AIP cannot be “compelled to testify as a witness for the petitioner….”

When representing a petitioner in a Guardianship proceeding, particularly where the Guardianship is contested, I work closely with the client to determine the witnesses who can best tell the Court, based upon personal knowledge, about the AIP’s ability to handle their personal affairs and property management. The decision in Matter of G.P. demonstrates that a petitioner cannot rely on just presenting the AIP to the Court, but must have competent independent witnesses to meet the “clear and convincing” proof required for a Guardianship appointment.

July 26, 2012

New York Guardianship Proceedings Also Involve Payments from a Supplemental Needs Trust

by Jules M. Haas

The New York Probate Lawyer Blog has had many posts regarding issues and requirements of an Article 81 Guardianship Proceeding. These proceedings involve a determination as to whether an individual is incapacitated and, if so, the appointment of an appropriate Guardian.

The determinations that are made by the Court involve many different persons which may include the alleged incapacitated person; a petitioner (usually a family member); and a Court Evaluator. In some cases third parties are involved such as a Nursing Home, Adult Protective Services, New York State Mental Hygiene Legal Service and Medicaid.

A Supplemental Needs Trust (“SNT”) is often a critical component of the Guardianship process. In a typical situation a person who is incapacitated may be entitled to a large monetary award due to a personal injury action. Since the incapacitated person would also qualify for government benefits such as Medicaid and SSI, the SNT provides a means by which the monetary funds can be set aside for extra benefits without the loss of the governmental entitlements. In the Guardianship proceeding, the Court authorizes the Guardian to establish the SNT and to transfer the funds into the Trust thus avoiding any loss of benefits. The SNT trustees, who are also designated by the Court, then administer the trust for the benefit of the disabled person. The trustees selected are commonly the family members who are the Guardians.

Once the SNT is established, the trustees can make expenditures for such things as computers, vacations, extra care and other items which the governmental benefits do not pay for without losing the governmental coverage for other items such as medical care. A good explanation of this process is provided in a recent case decided by Justice Howard H. Sherman on April 19, 2012 and reported in the New York Law Journal on May 14, 2012 entitled Matter of Geraldine R. In this case the Department of Social Services (Medicaid) claimed that the Supplemental Needs Trust trustees did not need to obtain prior Court approval to pay for items such as a vacation, purchase of a computer, printer and television, and educational programs. The Court found that it had authority to approve these items prior to the expenditure.

In fact, it is the usual and appropriate manner for trustees of a SNT to obtain prior Court approval of their expenditures. The trustees can then avoid a later denial by the Court and the requirement that they reimburse the trust for improper expenses.

I have represented many clients in connection with Guardianship proceedings and the establishment of a Supplemental Needs Trust. These cases require a Court hearing and I work closely with my clients and their families to help them through what can be a complex court process.

May 18, 2012

The Commencement of a New York Guardianship Proceeding Can Present Difficult Decisions

by Jules M. Haas

Article 81 of the New York Mental Hygiene Law (MHL) provides the substantive and procedural statutes regarding New York Guardianships. As previously talked about in many past posts in the New York Probate Lawyer Blog, a Guardian can be appointed to handle a person’s property management and personal needs when the person is determined by the Court to be incapacitated. However, the determination of incapacity is not always easy. Certainly, when a person has suffered a severe illness or accident and is completely dependent upon others for assistance with activities of daily living (i.e., the person cannot walk, talk or feed him/herself), the need for a Guardian is clear.

On many occasions though a person may be living alone or have some type of part-time care but is exhibiting the effects and deterioration of daily functioning that puts into question their capacity to adequately handle their property or personal affairs without risk to their well-being.

In these situations difficult questions arise on many levels. The first major hurdle may be the emotional quandary of having to bring a Court proceeding against a parent or other close relative to impose a Guardianship. The alleged incapacitated person often has enough cognitive ability to oppose the appointment and may be offended by the introduction of control over their affairs even though such supervision is needed to prevent future harm that may occur without the appointment.

New York Guardianship Lawyers are frequently asked by family members to help them decide the best course of action to take in these situations. Guardianship attorneys know that there is never a simple or textbook answer to these questions since the individuals and circumstances are unique in every situation. Sometimes family members refuse to get involved. In such instances, Adult Protective Services may be contacted and Guardianship proceedings will be commenced by the New York City Department of Social Services.

Once a New York City Guardianship proceeding is started, the next concern may be to actually show by “clear and convincing evidence” (MHL Section 81.02) that the person is, in fact, incapacitated. This may require an actual hearing or trial during which witnesses can testify as to the alleged incapacitated person’s ability to handle activities of daily living and his or her recent actions that reflect capacity. For example, the fact that a person leaves home and gets lost or cannot recall the names of relatives or the location of the banks where his accounts are held all tend to indicate the level of a person’s cognitive abilities.

Manhattan Guardianship proceedings, like those in all other New York Counties, involve the story of an alleged incapacitated person and their ability to attend to their present life’s activities while confronting the possible effects of disease or injury. It is typically the final decision of the Guardianship Court as to what extent, if any, such person needs assistance and, if so, who should be appointed as Guardian to provide the proper supervision.

May 3, 2012

New York Guardianship Proceedings Protect the Assets of the Incapacitated Person

by Jules M. Haas

A New York Guardianship Lawyer can advise a client with regard to the Guardian’s duties to protect the assets of the incapacitated person. Mental Hygiene Law (MHL) Section 81.21 is entitled “Powers of guardian; property management” and provides the various property management powers that are given to the Guardian. These powers are to be used to collect, preserve and apply the Guardianship property for the benefit of the person who is incapacitated.

The Mental Hygiene Law provides that the Guardian must file an Annual Report with the Court (MHL Section 81.31). The filing of the Report provides a means by which the Court can review whether the Guardian is acting in a proper manner on a year to year basis. These Annual Reports are typically reviewed by a Court appointed Court Examiner who provides a report to the Judge who is supervising the Guardianship case. The Judge then reviews the report and if the account is satisfactory, signs an Order approving the Report.

The Guardianship accounting process is somewhat different than the Accounting Proceedings that occur in the Surrogate’s Court regarding a decedent’s estate. It is very common that when settling an estate the final Estate Accounting is approved informally by the interested parties. In other words, the parties simply review the Executor’s Accounting or the Administrator’s Accounting and sign a Release form. There are no formal proceedings or accounting that is filed with the Surrogate’s Court. The process of probating a New York Will and settling a New York Estate does not require that an annual or a final account be approved by the Court. However, formal accounting proceedings requiring the Surrogate’s Court approval are sometimes required. In a Guardianship matter such as a Manhattan Guardianship, Nassau Guardianship, Queens Guardianship or other Court proceedings, annual and final Accountings must be filed and approved by the Court.

Probate and Guardianship Attorneys in New York can assist their clients when preparing the accounts that are needed to report the actions taken by them as fiduciaries. The best advise is to maintain complete records and copies of all papers showing all the financial transactions that were entered into. Also, hiring a fiduciary accountant can simplify the preparation of the accounting schedules that are required by the Court for reporting all information. Acting as a fiduciary such as a Guardian, Executor, Administrator or Trustee involves accepting the responsibility to protect and manage someone else’s assets. Proper guidance from a good Estate lawyer or Guardianship lawyer is essential to performing fiduciary duties properly and having the Court approve of the actions taken. Legal representation and diligence regarding property management is especially important where family members are fighting amongst themselves concerning the affairs of the person who is incapacitated. As recently reported in the Beverly Hills Courier on May 2, 2012, there is an ongoing dispute between Zsa Zsa Gabor’s husband and daughter concerning the management of her affairs. Although the article reports that the parties are attempting to settle the matter, each side will need to have a complete record of financial transactions concerning Ms. Gabor in order to fully access the situation and to present their case to the Court, if necessary.

April 25, 2012

New York Estate Planning Provides Protection Both Before and After Death

by Jules M. Haas

A New York Estate Planning Attorney can advise a client regarding the preparation of documents such as a Last Will, Living Will, Health Care Proxy, Power of Attorney and Living Trust. By preparing these documents an individual can provide protection to him or herself and their family during life and after death and avoid protracted Guardianship proceedings and Estate Litigation.

The New York Probate Lawyer Blog has discussed many issues regarding Article 81 Guardianship Proceedings. New York Guardianship proceedings are usually necessary when a person becomes incapacitated and does not have a Living Will, Health Care Proxy, Power of Attorney or Living Trust. These documents are advance directives that allow designated agents to make health care, end of life and property management decisions without the delay and complications of seeking court appointments. Unfortunately, in many instances such directives are not prepared and the assistance of a New York Guardianship Attorney will be required to prepare the Court petition and process the Guardianship proceeding. Guardianship proceedings are filed in the County where the incapacitated person resides or is physically present (MHL §81.05) I have represented many clients in Queens Guardianships, Manhattan Guardianships, Brooklyn Guardianships and proceedings in other counties as well.

The creation and signing of other types of documents are also important in both the pre and post death setting. For example, individuals who own businesses should prepare documents such as Shareholder and Partnership Agreements that define the rights and interests of the respective owners and provide specific instructions regarding the transfer of an owner’s interest upon death or disability. The failure to seek guidance from a New York Estate Planning Attorney with regard to succession planning can result in disputes and litigation after the death of one or more of the business owners. Such was the case with regard to the founders of the company that created the Archie comics book character. As reported in Estate of Denial on April 26, 2012 the disputes that arise between successors can transform a once peaceful company setting into disarray.

Certainly, having a Last Will which provides for a clear disposition of assets and takes into account those assets that pass by operation of law such as joint accounts, is a fundamental necessity for post death security.

A recent article by Rob Clarfield in Forbes on April 25, 2012 entitled, “7 Major Errors in Estate Planning” provides a short-hand guide to some current considerations. The 7 “errors” discussed in the article are:

1. Not having a plan
2. Online or DIY rather than professionals
3. Failure to Review Beneficiary Designations and Titling of Assets
4. Failure to Consider the Estate and Gift Tax Consequences of Life Insurance
5. Maximizing annual gifts
6. Failure to Take Advantage of the Estate Tax Exemption in 2012
7. Leaving assets outright to Adult Children
As is true in every estate plan, a comprehensive analysis of a person’s desires and intentions and family and assets is needed to determine the proper course to follow for their personal plan. Putting the proper documents into place not only provides lifetime stability and protection, but also prevents Estate Litigation in Probate Courts that be destructive to family harmony and costly to the estate beneficiaries.

January 25, 2012

New York Guardianship May Involve Many Family Members with Contentious Relationships

by Jules M. Haas

The appointment of a Guardian under Article 81 of the Mental Hygiene Law (“MHL”) is subject to the procedures set forth in the statute. The proceeding is commenced by filing an Order to Show Cause and Verified Petition with the New York Supreme Court. The petitioner contains a significant amount of information concerning the alleged incapacitated person (“AIP”) including a designation of the AIP’s ability to manage activities of daily living (MHL Section 81.08).

Manhattan Guardianships, as well as Guardianship proceedings in other New York counties, require that notice of the proceeding be given to the AIP’s spouse, parents, adult children, adult siblings and the persons with whom the AIP resides (MHL Section 81.07).

Information regarding the AIP’s family may not always be readily available. This is particularly so where the Guardianship proceeding is commenced by a non-related party such as a New York Department through Adult Protective Services or a medical facility or a nursing home.

It is not uncommon for a group of relatives to be at odds concerning the appointment of a Guardian. Different individuals may have competing views as to whether a Guardian should be appointed and, if so, who the most appropriate person is to act as Guardian of the Person or Property. Sometimes, one of the parties to the Court action has already been exercising control over the AIP’s property and personal affairs, possibly through the use of a Durable Power of Attorney or Health Care Proxy. Such person may resent interference from other family members and try to restrict their access to the AIP or involvement with decision making. In these situations, a full hearing of the competing claims and assertions can be held by the Court in order to ascertain what is in the best interest of the AIP.

A Bronx Guardianship case in which competing family views were presented to the Court was recently decided by the Honorable Alexander W. Hunter, entitled Matter of G.V.S., decided on December 16, 2011 and reported in the New York Law Journal on January 23, 2012.

In G.V.S., the AIP was a 73 year old person who became incapacitated due to a stroke. A Guardianship Petition was filed by the person’s daughter. Testimony at the Court hearing was given by the daughter, two sons, the person’s long-time companion, the person’s son-in-law and brother. Family members had complained that the petitioner-daughter had tried to control the AIP’s affairs and had excluded them from contact with the AIP.

Although the Court appointed the daughter as Guardian of the AIP’s person and property, the Court directed that she was not allowed to prevent the other family members from having access to the AIP and that she must keep them informed concerning the AIP’s health and medical condition.
G.V.S. demonstrates that a Guardianship proceeding not only involves matters regarding the AIP’s ability to care for his or her affairs, but also issues concerning the friends and relatives who might be involved in the person’s physical care and property management. Guardianship attorneys and their clients need to review and evaluate all of these aspects when commencing a Guardianship case so that the Court can be presented with all of the relevant information to make a determination that will be for the long-term benefit of the AIP.

January 6, 2012

New York Guardianship and Estate Settlement Often Cross-Paths

by Jules M. Haas

New York Guardianship proceedings for incapacitated persons are governed by Article 81 of the Mental Hygiene Law (MHL). The New York Probate Lawyer Blog has discussed in numerous posts the powers and duties of a Court appointed Guardian.

In many instances, a petition for Guardianship is filed with the Court because the Alleged Incapacitated Person (“AIP”) appears to be the victim of physical or economic abuse. The Guardianship proceeding will require the appointment of a Court Evaluator and/or Attorney for the AIP. These appointees and the Court itself will review whether any wrongdoing is being perpetrated. Sometimes, a government agency called the New York State Mental Hygiene Legal Service is appointed to protect the AIP’s interests. MHL Section 81.29 entitled “Effect of the appointment on the incapacitated person” provides the Court broad powers to remedy situations where the AIP has been taken advantage of. For example, the Court can void a contract or a power of attorney entered into by the AIP if the Court finds that the AIP lacked capacity when such papers were signed.

Even though the statute gives the Guardianship Court broad powers to remedy wrongdoing, MHL Section 81.29(d) specifically provides that the Court cannot “invalidate or revoke a will or a codicil of an incapacitated person during the lifetime of such person.” Thus, if the AIP signs a Last Will at the time he or she is found to be incapacitated while still alive, any objection or Will Contest to the validity of the Will must wait until the AIP is deceased and the Will is offered for probate.

In this regard, it is interesting to note that a finding of incapacity in a Guardianship proceeding does not mean that a person lacked the testamentary capacity to execute a Last Will. MHL Section 81.29(b) specifically provides that “subject to subdivision (a), the appointment of a guardian shall not be conclusive evidence that the person lacks capacity for any other purpose, including the capacity to dispose of property by will”.

Since a Last Will cannot be challenged until a person dies, many issues involving the disposition of the AIP’s estate are fought over only after the AIP dies. Estate settlement and estate administration becomes the new battle ground for problems that could not be settled in the Guardianship.

The Courts clearly recognize that while the overlap of controversies may exist, the paradox of a finding of incapacity for Guardianship cannot forestall an incapacitated person’s ability to sign his or her Will.

This circumstance was clearly shown in a recent case entitled Matter of Biaggi, decided by Justice Alexander W. Hunter, Supreme Court, Bronx County, on November 10, 2011 and reported in the New York Law Journal on November 28, 2011. In Biaggi, objections were filed to the action of the Guardian for retaining an attorney to assist the incapacitated person with drafting and executing a new Last Will. The Court found that the Guardian acted appropriately and noted that “allegations of testamentary capacity and undue influence are matters that should be more appropriately be brought up, if necessary, post-mortem and not at this time before this Court.”

November 16, 2011

New York Guardianship Requires Court Approval to Transfer Assets of Incapacitated Persons

by Jules M. Haas

Incapacity due to sudden illness or the effects of dementia and Alzheimers disease often results in the appointment of a Guardian under New York Mental Hygiene Law (“MHL”) Article 81. The preparation of advanced directives such as a Durable Power of Attorney and Health Care Proxy may avoid such proceedings.

Once a Guardian of a person’s property and/or personal needs is appointed by the Court, the Guardian’s powers are usually set forth in the Court Order/Judgment that makes the appointment. MHL section 81.21 provides for property management powers and MHL section 81.22 provides for personal needs powers.

It is common for an incapacitated person (“IP”) to own a home such as a single family house or a cooperative or condominium apartment. Typically, the Court Order which specifies the Guardian’s fiduciary powers will provide that the Guardian is prohibited from selling the IP’s home without further Court approval. New York Real Property Actions and Proceedings Law article 17 provides a detailed procedure for a Court approved sale of real property which usually involves an appraisal of the property and public advertising. The apparent goal of the law is aimed at insuring that a fair price is obtained for the property.

I have represented many clients in connection with Petitions for the Appointment of a Guardian and the Guardian’s obtaining Court approval for the sale of real estate.

A recent case decided by the Honorable Alexander W. Hunter in Bronx Supreme Court on September 27, 2011 and reported in the New York Law Journal on October 14, 2011 entitled Matter of the Petition of M.H., shows some of the problems that can arise in these proceedings.

In M.H., title to a residential house was in the name of the IP’s granddaughter (M.R.) subject to a life estate interest owned by the IP. The IP was 91 years of age and lived in a nursing home. The granddaughter wanted to sell the house and it was proposed to the Court that the life estate interest be transferred to the granddaughter who would then sell the house and give the Guardian an amount equal to the value of the IP’s life estate interest.

The Court, however, did not approve the transaction for a number of reasons, including that there was no explanation as to why the life estate needed to be transferred to the granddaughter rather than sold by the Guardian as part of the transaction. The Court was also concerned about whether the granddaughter would pay the IP’s share of the proceeds over to the Guardian after the sale.

M.H. is interesting because it shows the necessity of consulting with a good New York Guardianship attorney concerning the many complex issues that can arise in Guardianship cases. Although M.H. involved a Bronx Guardianship, the need to review all aspects of Guardianship Court proceedings is imperative no matter where the proceedings are held in New York.

November 10, 2011

Inheritance in New York Can Be Forfeited Where the Beneficiary Causes the Decedent’s Death

by Jules M. Haas

Estate beneficiaries in New York can have rights to receive a share of a decedent’s assets in a variety of circumstances. The beneficiary can be named in the decedent’s Last Will or, if no Will exists (“intestacy”), the beneficiary may be one of the decedent’s next of kin (a “distributee”). As provided in New York Estates, Powers and Trusts Law (EPTL) section 4-1.1 a distributee receives a share of the estate.

There are some situations, however, where the estate share may be forfeited by the beneficiary. For instance, EPTL 5-1.2 provides that interests of a surviving spouse may be lost under certain circumstances including the “abandonment of the deceased spouse” (EPTL 5-1.2(a)(6).

Another example of forfeiture that is recognized by the New York Surrogate’s Court provides that a person who murders another forfeits his or her right to inherit from the victim’s estate. This doctrine, which prevents a person from profiting from a wrongful act, seem fairly easy to apply where the murderer is convicted by the crime. The recent case of People v. Borukhova, a Queens, New York doctor who was convicted of hiring her cousin to kill her husband, would seem to satisfy the forfeiture criteria. However, all situations are not as clear. What if a person’s death was due to alleged neglect or mistreatment and no criminal proceedings were instituted against the alleged wrongdoer. Such a situation occurred in Matter of Karp which was decided by New York County Surrogate Kristin Booth Glenn on September 22, 2011 and reported in the New York Law Journal on October 4, 2011.

In Karp the sister and nephews of the decedent claimed that the “decedent’s wife of more than 15 years, intentionally or recklessly caused decedent’s death and should therefore forfeit her interest in [his] multi-million dollar estate.”

After reviewing the extensive evidence, the Surrogate found that the decedent died due to causes directly related to his own requests for termination of certain medical procedures and that no action on the part of his wife caused his death. Therefore, the Surrogate granted summary judgment dismissing the sister and nephews claim.

Although the claims in Karp were dismissed, the case does raise some interesting concerns for both pre-death care and post-death estate settlement. In Karp the decedent was very ill prior to his passing away. Issues may arise as to what responsibility a beneficiary may have to institute Article 81 Guardianship proceedings to have a guardian appointed to assist a person with health care and other personal needs decisions. When a person appears incapacitated can the failure by a beneficiary to assist him or her result in a forfeiture of an inheritance? Also, if a beneficiary is a health care agent under a Health Care Proxy, can he or she lose an inheritance in the event the health care decisions result in the decedent’s death?

Finally, after a person has died, Executors, Administrators and estate beneficiaries may examine the circumstances leading up to death in order to consider whether a proceeding for forfeiture is a viable consideration. Bronx probate attorneys, as well as probate lawyers throughout New York, can review these matters and advise clients as to their rights.