Guardianship
A Guardianship is a formal legal arrangement, in which a court gives a person the legal rights to act on behalf of an incapacitated adult, or child whose parents are dead or missing, or otherwise not able to care for the child. The guardian is responsible for ensuring that the needs of a child or incapacitated adult are met. In New York, adults who can no longer manage their personal or financial affairs due to mental or physical impairment are considered legally incapacitated. Article 81 of New York’s Mental Hygiene Law provides courts with the authority to appoint guardians to assist such individuals.
In a 2010 report, the U.S. Government Accountability Office (GAO) found hundreds of allegations of physical abuse, neglect and financial exploitation by guardians in 45 states and the District of Columbia between 1990 and 2010. Guardians also stole $5.4 million in assets from their wards in that period, the GAO said.
The American Bar Association published the statement that “an unknown number of adults languish under guardianship” even if they no longer have the need for someone to make decisions for them (or never did).Another danger is that while court-appointed guardianship could be terminated through a court hearing if it can be proved the need no longer exists, the ABA study also asserted the guardianship situation is typically permanent, leaving few ways out for the adults under care. Those who do try to fight against a court-appointed guardian often end up paying excessive amounts of money in attorney and court fees—some even going bankrupt in the process.
Guardians require a high level of oversight but there is very little data on whether adequate oversight is occurring because the courts typically don’t keep track when guardians are found to financially abuse their wards. Thus, unscrupulous court-appointed guardians can more easily slip through the cracks and continue to abuse the system and their wards’ assets.
How to Protect Against the Potential of Abuse
I would not want a court-appointed guardian — particularly a stranger — to exert control over my life, and I can’t imagine anyone would want to give up autonomy and control, especially when the system can’t guarantee adequate oversight against financial exploitation of the person under the guardian’s care. Court-appointed guardians are given the power to wield extreme control. They could legally:
- Change your permanent residence to a more restrictive location.
- Decide how your money will be spent for your needs, and remove your autonomy regarding financial decision making.
- Place restrictions on communications, visit, or interactions with another person.
- Make decisions contrary to your wishes regarding general life in areas like recreational activities, clothing, and food choices.
The following legal and estate planning tools are proactive measures you can take today to avoid the potential of being subject to a guardianship.
IN NEW YORK: THE HEALTH CARE PROXY
Health Care Proxy
It allows you to choose a person to make decisions on your behalf in the event you become incapacitated either temporarily (such as under anesthesia) or permanently. If you cannot express your medical treatment wishes clearly and coherently, a healthy care proxy gives your agent authority to make such wishes be known on your behalf. The decisions are stipulated in the proxy. This way you can make sure your health care providers follow your wishes. The designated agent also retains the right to receive your medical record information that would otherwise be inaccessible as it is protected under HIPAA laws. If you want to limit Your Health Care Proxy’s authority, you can limit it by writing the limitations in the Health Care Proxy. You and two (2) witnesses must sign your NY Health Care Proxy form for it to be considered valid.
According to the New York State Department of Health, there are several situations that may require a proxy:
- You are in a coma from an accident or illness.
- You are terminally ill and not expected to recover.
- You have Alzheimer’s or another form of dementia.
- You are under general anesthesia, when something unexpected occurs.
- You are in a persistent vegetative state.
- You suffered from an illness that left you unable to communicate.
The New York State Department of Health also warns that appointing the right person to be your healthcare proxy can be difficult. Here are some steps the NY State Dept. of Health says can guide you:
Have an honest conversation.
Talk to family members and friends about what you want. During those conversations, look for someone who is most likely to represent your wishes.
Clarify your values and beliefs.
Consider what’s important to you. What contributes to the quality of life you want? How do you want to spend your final years, weeks or days? What activities are essential to having a quality life? What role does your faith play in making these decisions?
Frame your medical wishes around these values and priorities. Determine which treatments you are willing to accept. Figure out which treatments you would never want. How much medical care are you willing to have to stay alive? What kind of medical risks are you willing to take? When would you want to shift from treatment to comfort care?
With the Health Care Proxy form, you are not giving up your authority just by signing it, according to the N.Y. Dept. of Health which states: “Even though you have signed this form, you have the right to make health care decisions for yourself as long as you are able to do so, and treatment cannot be given to you or stopped if you object, nor will your agent have any power to object.” See link: https://www.health.ny.gov/professionals/patients/health_care_proxy/
You do not need a lawyer to fill out this form. You can obtain a New York Health Care Proxy at the following link: https://www.health.ny.gov/professionals/patients/health_care_proxy/
POWER OF ATTORNEY
A Power Of Attorney is a legal document that gives a person authority to handle your financial decisions and take actions like pay bills, settle debts, and sell property on your behalf if you become incapacitated and are unable to do this yourself. Under a Power of Attorney, you can give the person limited or expanded power. You can revoke the Power of Attorney at any time, unless you no longer have mental capacity to make decisions. Because the Power of Attorney is so vulnerable to abuse, states such as New York, require that the POA contains explicit disclosure of your rights as “the Principal.”
For example, here is how the New York’s Power of Attorney document provides this warning on the first page:
(a) CAUTION TO THE PRINCIPAL: Your Power of Attorney is an important document. As the “principal,” you give the person whom you choose (your “agent”) authority to spend your money and sell or dispose of your property during your lifetime without telling you. You do not lose your authority to act even though you have given your agent similar authority.
When your agent exercises this authority, he or she must act according to any instructions you have provided or, where there are no specific instructions, in your best interest. “Important Information for the Agent” at the end of this document describes your agent’s responsibilities.
Your agent can act on your behalf only after signing the Power of Attorney before a notary public.
You can request information from your agent at any time. If you are revoking a prior Power of Attorney, you should provide written notice of the revocation to your prior agent(s) and to any third parties who may have acted upon it, including the financial institutions where your accounts are located.
You can revoke or terminate your Power of Attorney at any time for any reason as long as you are of sound mind. If you are no longer of sound mind, a court can remove an agent for acting improperly.
The Power of Attorney automatically terminates upon the death of the principal.
A REVOCABLE TRUST
A Grantor Revocable Trust can protect you, and keeps you in control of your assets as long as you have capacity to make decisions. A trustee and successor trustee could be named and the document could be used as a safeguard for financial protection. If you don’t want to give up your authority you want a Grantor Revocable Trust that you can revoke at any time, if you so choose — as long as you have the capacity to make decisions. People can name their own Guardian in a Trust. The Guardian you name will act on your behalf if you are disabled. Only after death does your property transfer to the beneficiaries.
YOU NEED TO BE PROACTIVE
By being proactive, you can opt for a Power of Attorney and a Grantor Revocable Trust and be certain that someone you trust will be responsible for carrying out your wishes and acting in your best interests, and not rely on the courts to appoint a stranger to control your finances and your life. You can revoke the Power of Attorney and Grantor Revocable Trust at any time (unless you become incapacitated). You do not need the court’s permission to revoke a Power of Attorney or Grantor’s Trust, whereas once a court-appointed guardian is appointed you have to go through an elaborate, expensive court process to prove it is not necessary and should be revoked.
New York and other states need substantial policy change to better protect people from exploitation by court-appointed guardians. Until reforms are enacted, it’s best to have your own legal safeguards in place just in case: a Health Care Proxy, Grantor Revocable Trust and/or Power of Attorney. The key to protecting your interests is to make sure the person you are designating to be your agent has earned your trust. Do your homework to satisfy yourself that the person to whom you give this enormous power will be loyal to your interests, trustworthy and act in good faith, on your behalf.