Much of my practice involves caring for individuals when they become incapacitated. My previous articles have repeatedly emphasized the importance of having certain documents in place, particularly a health care proxy and power of attorney. However, many people do not put these documents in place until it is too late, and they no longer have the mental capacity or competency to execute (sign) those documents; indeed, many people live well into their 80s and 90s without having ever signed those documents. Some of the examples of the questions that come my way:
Q. My aging grandmother is having difficulty taking care of herself. She is unable to manage her own finances, and she really should not be living alone anymore.
Q. My 75-year-old mother is suffering from Alzheimer’s and is struggling with dementia. She has lost the ability to take care of herself or her house, and has not been managing her finances.
Q. My 82-year-old father is a widower and lives alone. Yesterday, he forgot that he had the stove on and nearly burned down his house. His dementia is getting worse.
Q. My 79-year-old father was the victim of a con man at the supermarket yesterday. The person told him he needed $1,500 … and my father gave it to him!
All of these questions end with: He or she does not have a health care proxy or power of attorney and definitely does not have the mental capacity to understand or sign one now. What do I do?
This is, unfortunately, a common scenario. In order to execute the documents necessary to appoint someone to act for you, you need to have the requisite mental capacity to do so, meaning you have to understand what you are signing. A lawyer can assess a person’s mental capacity and decide whether or not he feels comfortable having someone execute the documents. In the absence of these documents, the recourse is a guardianship proceeding. In other words, if you do not appoint a health care agent, the court will appoint one for you if it finds you incapacitated or in need of a guardian.
Article 81 of the Mental Hygiene Law allows for an application to the Supreme Court to have a guardian appointed for an incapacitated person (referred to as an “allegedly incapacitated person” or “AIP”). Under Article 81, you can seek the appointment of a guardian of the person, a guardian of the property, or both.
This requires the preparation and filing with the court a petition setting forth — under penalties of perjury — that the person is incapacitated, does not understand or appreciate his lack of capacity or the consequences of his actions or inactions, and therefore is likely to suffer harm if a guardian is not appointed to protect him.
A family member or a person concerned about his welfare (such as a neighbor) can bring the petition and ask that the petitioner or someone else be appointed guardian. The allegedly incapacitated person’s next of kin — spouse, children, parents, siblings, and in some cases nieces and nephews — will receive notice of the proceeding and have an opportunity to object. They will have the opportunity to come to court to object to the proceeding or to object to the requested guardian, and perhaps advocate for someone else to be appointed as guardian.
Once commenced, the court appoints a Court Evaluator, usually an attorney who is certified by the court to act as the “eyes and ears” of the court. The Court Evaluator interviews the relevant parties and the allegedly incapacitated person. The Court Evaluator is charged with explaining the proceeding to the person, ascertaining whether he would consent to the guardianship, and who he would like to serve as guardian, and recommending whether the person needs independent counsel. The Court Evaluator can review the person’s finances and often his medical records. Oftentimes the Mental Hygiene Legal Services is appointed to represent the person. The Court Evaluator presents a written report on her findings and recommendations, and testifies in court.
The Court Evaluator fee is set by the judge presiding over the guardianship and is paid for out of the person’s funds, if a guardian is appointed, or potentially will be paid by the petitioner himself if the petition is denied and a guardian is not appointed.
The court will only order a guardian and extent of powers that is specifically tailored to meet the needs of the incapacitated person in the least restrictive manner possible, so that his freedom is infringed upon in the least restrictive way. For example, if the person is unable to manage finances but is fully capable of making his own medical decisions, the court’s order will reflect that.
After hearing all the evidence, the court determines whether or not a guardian is needed and the extent of the powers the guardian will have. The court might appoint the person requested in the petition, or a court-appointed guardian from a list of certified guardians, or a combination of both.
The guardian may only do the things that the court expressly provides for in the order. Unless specifically ordered by the court, the guardian cannot make end-of-life decisions, consent to psychotropic medications, arrange for admission into a nursing home or other facility, or sell or transfer assets.
Once the guardian is appointed, the person is required to undergo a court-approved training program. The training includes instruction on the guardian’s legal duties and responsibilities, the rights of the allegedly incapacitated person, a guide to useful resources, and instructions on preparing annual accounts. The guardian cannot begin acting until she is issued a “Commission” signed by the County Clerk, which evidences her appointment and authority to act as guardian. The Commission will not issue until a certificate of training is produced and the guardian signs a designation and consent to act.
The guardian must maintain financial records (and records of doctors visits for the personal-needs guardian), and is required to submit an accounting each and every calendar year of all assets received, all income collected, and all disbursements made. The court also appoints a Court Examiner whose responsibility is to review the guardian’s annual account, identify any discrepancies, and advise the court if the guardian needs to be removed for inaction or breach of fiduciary duty, such as stealing the incapacitated person’s money. The Court Examiner’s fee is also paid out of the incapacitated person’s assets or, if there are no assets, by the State or City.
The costs of a guardianship far exceed the cost of a basic estate planning package that includes advance directives such as a health care proxy and power of attorney.
Isn’t executing a health care proxy and power of attorney so much simpler?
Alison Arden Besunder is the founding attorney of the law firm of Arden Besunder P.C., where she assists new and not-so-new parents with their estate planning needs. Her firm assists clients in Manhattan, Brooklyn, Queens, Nassau, and Suffolk Counties. You can find Besunder on Twitter @estatetrustplan and on her website at www.besunderlaw.com.