What are Guardianships?
Guardianships provide legal protection for individuals who are incapacitated mentally, physically, or both. Indeed, they are important because they protect people who cannot otherwise protect themselves. Every guardianship begins with a petition to the court. For example, In New York State, it could be the Surrogates court, or the Supreme court, depending upon circumstance.
Three Common Guardianships in New York State
The are many types of guardianship, but we will mention three that are common. Remember, other than for Article 81 guardianship, the earlier you establish the guardianship, the better it is for all parties.
Article 81 guardianship – Guardianship for Incapacitated Persons empowers an individual to can make medical and financial decisions for an incapacitated individual. However, the empowered individual will not have a comprehensive power of attorney. Why is an Article 81 guardianship necessary? When the incapacitated individual did not plan sufficiently, there is no health care proxy in place, and none can be executed, due to the incapacitation. Therefore, it becomes necessary to approach the court and ask that someone be appointed as a guardian.
Remember, this guardianship is a “Plan B”, which would be avoided with sound prior planning. Guardianships mean regular audits and reporting to the court, and possible requests for additional guardianship powers as the incapacity individual’s situation changes.
Article 17-A guardianship – Guardianship of a Developmentally Disabled Person protects a disabled child. The court will award appropriate powers for the ward and applies the most restrictive methods for protecting the child. Therefore, the court only grants necessary powers. Parents of developmentally disabled children should remember, as a parent you have natural guardianship, but once your developmentally disabled child turns 18, you will need an Article 17-A guardianship to continue making decisions for that child.
Guardianship of a Child – When the parents of a minor child decease or are for other reasons unable to exercise parental rights, the court will appoint guardian for the minor child.
Special Needs Planning and Guardianship
Special Needs Planning is closely related to guardianship. It ensures disabled individuals are taken care of without jeopardizing their access to governmental benefits and support. Without special needs planning, a disabled child might receive a large inheritance when parents deceases. The large inheritance might disqualify the child from receiving governmental benefits until that child spends down the inheritance. Could become subject to medical creditors, places assets and child at risk.
Getting Started with Guardianship
With an Article 81 guardianship, you don’t get started. A third party begins the process, which initiates because the incapacitated individual lacked effective estate planning. For example, an Article 81 guardianship is often initiated when an individual with reduced capacity wishes to engage in estate planning and the attorney involved cannot, in good faith, have the reduced capacity individual execute documents.
For an Article 17-A guardianship, it is a good idea to get the process started in the year prior to the developmentally disabled child reaching age 18.
With a guardianship for a minor child, the intentions of the parents are often addressed in the will. That is where suggested guardians and guardian order of succession should be specified. A nominated guardian does not automatically become a guardian. Instead, the court must be petitioned. While the court does give weight to the expressed wishes of the parents, they do not an absolute right to select the guardian. Depending on circumstances, the court may select another individual.
What about Special Needs Planning? This should be part of estate planning. It is important to set up supplemental needs trusts, as needed. These trusts protect a special needs individual from having his or her governmental benefits (e.g. Social Security, Medicaid) denied until an inheritance has been spent.
Reviewing Guardianships and Special Needs Planning
Guardianships do not require reviews, other than for changes in financial circumstances or law. However, guardians must provide annual reporting to the court on their actions as guardian. This means reporting on what monies have been spent. The court can approve or deny the expenditures. If denied, guardian may need to recompense the ward.
Special needs plans should be reviewed during regular reviews of your estate plans. This ensures the special needs remain specifically tailored and relevant to the requirements of you and your beneficiaries.
Three Good Tips About Guardianship and Special Needs
1 – For Article 81 Guardianships, avoid them entirely with advanced planning! With the right planning, there will be no need report to the court and have your expenditures scrutinized.
2 – For Article 17-A Guardianships, begin the conversation before the developmentally disabled child reaches age 18. Don’t wait until the last minute.
3 – If you have a disabled beneficiary or minor child, supplemental needs trusts should be in place so these beneficiaries don’t receive monies outright and lose access to governmental benefits.
Picking the Right Guardianship and Special Needs Attorney
As with many estate-related legal services, it is crucial to find a firm that focuses in this area, understands the law, and has the sensitivity to deal with delicate situations.
You want to find that firm sooner than later. Why? To avoid Article 81 Guardianship. To ensure your developmentally disabled child remains protected, and to ensure that you have nominated appropriate individuals as guardians for your minor children. Make sure your estate planning professionals include special needs planning in your estate plan.
The Risks of Delay are Significant
Don’t wait until a guardianship-triggering event occurs to act. Once a guardianship is invoked, you as guardian, or another individual appointed as your guardian, become subject to the whims of the court and to ongoing oversight as a guardian. In the case of special needs planning, if the situation of the estate changes (e.g. financial, spousal, legal) and the special needs provisions of your estate don’t change to accommodate, you or your dependents may face issues. Contact Sheryll Law, P.C. today and come in for a consultation. It is far better to have a plan in place before an emergency occurs and less desirable actions are forced.
A Recent Case
A married couple came to Sheryll Law, P.C. for an estate plan. Named partner Jay Sheryll determined the husband had reached a point where he could not responsibly sign documents. Therefore, the situation demanded a guardian for the husband. Sheryll Law, P.C. immediately filed a petition for the court to get the wife appointed guardian in an Article 81 Guardianship. Remember, appropriate advanced estate planning would have avoided this situation.
You Cannot Turn Back the Clock
No, there is no way to turn back the clock. The risk of failing to develop a timely estate plan is Article 81 Guardianship itself, with its attendant issues and costs. Without timely Article 17-A Guardianship planning, your developmentally disabled child might be at risk for loss of governmental support programs. Without special needs planning, minors or disabled inheritors must have the courts appoint guardian. This raises needless cost and complication.
Guardianship and Special Needs Planning are classic “Failure to Plan means Plan to Fail” situations. So, act now. Contact Sheryll Law, P.C. and have peace of mind for you and your dependents and beneficiaries.