Winter 2010 Newsletter

January 2010
Inside This Issue
Guardianship Concerns in New York State – Part 2
Winter 2010 Newsletter

NOTE: The names and locations below have been changed to protect their privacy.

The Mental Hygiene Laws

In 1992, the Mental Hygiene Laws were enacted by the New York State Legislature. The laws were designed to outline the framework for the entire guardianship process, start to finish; this type of case is called an “Article 81.” The legislature intended to create the least restrictive, most customized and respectful intervention possible, based on all the facts and circumstances of a particular case.

While it would appear that a family member of an alleged incapacitated person should receive preferential consideration in an Article 81 case, they are still subjected to scrutiny by the court. There is no guarantee that a child or sibling will be appointed guardian for a family member, just by virtue of the family relationship. On occasion, I have observed that a family member can be subjected to even greater scrutiny than a stranger.

Powers of Attorney and Health Care Proxies

Of course, there are no guarantees that the authority of a health 
care or property management agent, designated by written proxy or power of attorney, will not be revoked and an entirely different guardian appointed, if the court decides that such a choice is in an alleged incapacitated person’s best interests. Where the court determines that a health care agent and attorney in fact have been properly appointed, it shall refrain from appointing guardians, however. The Public Health Law provides, in part, that health care decisions by health care agents have priority over decisions made by anyone else, save for a competent patient.

The Bernini Family

Now, let us presume for a moment, that the baby-boomer’s mother has been placed in a facility by a hospital. Then, the facility institutes a proceeding to have a guardian for the personal needs and property management appointed for the incapacitated mother who resides in its facility. The boomer stands by stoically, in a vain attempt to comprehend what has happened. That is what happened to the Bernini family, who made quite a lot of money in the real estate market in the 1970’s and 1980’s. When Mr. Bernini died, both his widow and adult son struggled. They were extremely secretive, so that no one in the extended family realized that Mrs. Bernini had Alzheimer’s and that her son was not capable of taking care of either one of them. When Mrs. Bernini broke her hip at 91 years of age, it became apparent that she could not return home, so she was placed in a facility, and the facility instituted a guardianship proceeding.

The son was incapable of objecting or cross-moving for relief, so an agency was appointed, and shortly thereafter, in marshalling Mrs. Bernini’s assets, the guardian re-titled Mrs. Bernini’s only resource, an annuity, from Mrs. Bernini’s name, to the agency’s name AS BENEFICIARY. Then Mrs. Bernini died. It is elementary that the re-titling of guardianship assets should show the guardian’s name as “guardian,” and not as “beneficiary.”

Once we realized what had happened, it required letters, telephone calls and threats of filing a complaint with the local District Attorney-over the course of many months-before the appropriate corrections were made, and the money released to the son, the rightful beneficiary. Unfortunately, there is abuse and fraud, and we practitioners must be vigilant in watching for such abuse.

Occasionally, an errant guardian appears in newspaper headlines, buy that is rare when one considers how many applications are granted each year. In addition, guardians must post a bond to insure the incapacitated person’s assets, so that in the event of malfeasance, the incapacitated person’s assets are protected. It is a shame that the failure to execute a health care proxy and durable power of attorney results in such needless costs and inconvenience. Moreover, the result achieved at the hearing may not remedy the issues adequately.

And after the Smoke Clears?

How well does the guardianship system work? I believe that unless one has absolutely no option, the commencement of a guardianship proceeding should be avoided, if possible, due to the difficulty, unpredictability and expense. Clients are frequently unhappy, but there is little option for the individual who fails to adequately plan, especially where the incapacitated person has assets. Therefore, we strongly recommend that clients include comprehensive durable powers of attorney and health care proxies in their estate plans. 

Excerpted from Kordes, Guardianship Concerns in New York State, Springer Publishing Co. New York, New York, 2009.

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The above list is for general information purposes only. It is not intended to constitute individual legal advice or a specific recommendation to any particular client.


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