Once appointed, Guardian should inform third parties

The entry of a Judgment appointing a legal Guardian for an incapacitated person may be the end of the court process, but it marks the start of a new process in which the Guardian has many obligations and responsibilities. After all, the Guardian’s primary obligation is to protect the personal and financial interests of the ward. One of these responsibilities is to “let the world know” that the individual has been declared by the Court to lack capacity to govern him/herself [in full or in part] and that another person has been vested by the Court with authority to make major decisions for that person. The Guardian should send a copy of the Judgment or Surrogate Certificates to every person or entity who is delivering services or holding money for the incapacitated person and should direct the necessary communications accordingly. This could include health care providers, financial advisors, banks, retirement fund administrators, etc.

There is a legal concept referred to as “actual notice” and “constructive notice.”  Legal ramifications flow from whether another party had actual notice, constructive notice or no notice. For example, when a Will is admitted to probate, the estate’s Executor/administrator is obligated to give notice of the probate to each person who is an heir at law and each person who is a named beneficiary (and there are court rules and case law specifying how notice can be given if it isn’t certain just where the person resides). N.J.R. 4:80-6. It is the giving of the notice of probate that then triggers a limited time period for a person to file a challenge to the Will. N.J.R. 4:85-1.

A sad case in another State illustrates what can happen if actual notice of the incapacity and guardianship aren’t given. In this case, M.B. had been working and had accumulated an ESOP stock plan benefit. He was declared to be incapacitated, and a guardian (conservator) was appointed. He was working in a grocery store at that time. The guardian gave a copy of the judgment to a person at the store and instructed them to direct-deposit his pay to a certain account. Some time later, M.B. retired at age 56. He requested and received his $78,509 of ESOP stock benefits. The Plan Administrator did not know that a guardian had been appointed over his property, and did not know about the interactions involving the direct-deposit of the paycheck. The plan administrator granted his request and turned over the money to him. He was a vulnerable adult, and unfortunately quickly lost all his money to an internet scammer.


The Guardian asked the company to reinstate the benefit. The request was denied, and suit was filed under ERISA. The federal district court for the Northern District of Georgia granted summary judgment in favor of the company (Publix Markets), and the Eleventh Circuit U.S. Court of Appeals affirmed. The court held that “actual knowledge” of M.B.’s incapacity had to have been received by the  Publix Retirement Department. The Guardian’s communication with a Publix employee regarding payroll issues did not satisfy this requirement. Bauman v. Publix Supermarkets Inc.,, 2017 WL 4510322 (11th Cir. Oct. 10, 2017) (unpublished).

Call us for legal advice concerning the duties of a guardian and carrying out the responsibilities of guardianship, and for legal actions such as sale of property that  a guardian may need to file …. 732-382-6070

A happy day in Guardianship Court: Restoration

Today I had the great fortune to participate in a case in which a person who has been under guardianship for six years had their capacity restored in full.  This kind of situation doesn’t often happen, but it’s really fabulous.

This case started in 2010 when the parent and sibling came to me in an emergency to report that their loved one who I’ll call “X” had suffered a burst aneurysm and a stroke, and was in a coma in the hospital. The hospital advised that they seek guardianship, as there was no power of attorney or health care proxy in place. We filed the necessary papers, and the parent was appointed Guardian. The “ward” — a former executive with huge responsibilities at a major New Jersey corporation —  required extensive hospitalization, but eventually arose from the coma and was released. “X” had a very slow improvement in high level intellectual ability. Also, “X” had various lower body physical handicaps including partial paralysis and required a lot of hands-on assistance.

The family was utterly devoted, and with each year, “X” got stronger and more of “X’s” intellectual processing returned. At one point, “X” asked us to go back to Court, as “X” wanted to revoke “X’s” prior Will and make a new plan. That was accomplished, with the help of the “ward’s” court-appointed attorney. The Guardian and family continued to assist the “ward” with challenging exercises and tasks to help “bring the brain back.”

Finally, the Guardian contacted me and basically said “we think that “X” is ready to regain control of all decisions about their life. “X” has physical handicaps, but “X” can handle those with amazing specialized equipment which “X” knows how to use, and “X” will ask for help when necessary.” So we filed the necessary Verified Complaint with supportive medical reports, and today, following a hearing, the Judge granted “X” restoration of full capacity.

Pursuant to N.J.S.A. 3B:12-57.g.,  Guardians are required to encourage the ward to participate in decision-making “in order to encourage the ward to act on his/her own behalf whenever s/he is able to do so, and to develop or regain higher capacity to make decisions in those areas in which s/he is in need of guardianship services, to the maximum extent possible.” The incapacitated person has the right to petition the court for modification or termination of the guardianship, R. 4:86-7(a)(6),  and the Guardians have the duty under N.J.S.A. 3B:12-57f(10) to institute such legal actions as the “ward” could institute. How is that done? By filing a formal Verified Complaint and order to Show Cause with the court who has jurisdiction over the guardianship, supported by medical proofs and other relevant evidence.

Needless to say, “X” was grinning from ear to ear to receive the Judgment of restoration. So was the Judge … they rarely have the opportunity to see such a fantastic recovery by a person under guardianship.

Call us for advice on guardianship, conservatorship, power of attorney and elder law …. 732-382-6070



More formality may be better with intergenerational households

As elder law attorneys, our clients have presented us with many difficult situations involving adult children or grandchildren who live in their houses. Sometimes a child has run into some hard times and sees the parent’s home as an economical option; the child may move into his parent’s house along with his spouse and children. Sometimes the child just never became self-sufficient and never made any plan to move out. The adult child may or may not be disabled. Sometimes the expenses are being shared to a degree, but often the parent pays for most of the expenses. The parent may be wrestling with a feeling of obligation, and the child may have a feeling of entitlement. The child may feel that they are “taking care of the parent,” yet the actual need for care or the work being done may be imprecise and doubted by others in the family.

The longer the arrangement lasts, the more difficult it can be for the parent to move on. The dynamic can really change when there are other children who are upset at the arrangement. The parent’s financial security may get on edge. Things can particularly blow up when the parent has to hire a caregiver or wants to sell the house in order to downsize or move to assisted living or nursing home.  How can all of these competing interests be managed? How will the house be sold, and where will the child go?

Aging parents who are still supporting their adult children may want to do some careful planning. They need to consider what will happen to them if they need their funds for care but their child is counting on all of that ongoing financial support. There are many issues to consider. Should they charge actual rent? Should there be a written lease that specifies that occupancy only continues of the occupancy fees are paid? Should they put restrictions on the child’s behavior so that the parent’s peaceful residence isn’t disturbed? A parent may want to put a provision in his or her Will that allocates some extra amount for the dependent child so that at the parent’s death, there are extra funds for relocation. By putting protective provisions into the estate plan, the parent may be able to provide better protections than counting on other family members to honor the parent’s verbal “wishes.” It may not work well to just assume that the whole family will be able to work out an agreement to support the dependent one after mom or dad passes on.

At some point, should the parent insist that the child move out, but agree to pay for the alternate housing for some period of time? What if the house is going to be sold. Does the parent want to give the child written, enforceable rights to remain in the house for a certain amount of time under certain terms & conditions if the parent dies or moves out? How will that impact the parent’s well-being, or the ability of their Executor to wrap up the estate after death? Will the child need a new guardian or life care planner?

Call us for legal advice on developing a family well being plan … 732-382-6070

New SEC rule could protect vulnerable adults from exploitation

There is a fine line to tread when a concerned person observes what appears to be financial exploitation of a person with cognitive impairment. Under the law, an adult is presumed to be “competent” unless and until a Court has entered an Order declaring him or her to be incapacitated. As dementia develops, there can be a long distance between the onset of impaired judgment with impaired resistance to suggestion, and the point of actual incapacity.

Third parties who interact with the customer — such as people working in banks and brokerages,  insurance agents etc. — may observe disturbing behavior. They may observe that their customer is now accompanied by somebody who seems to be telling them what to do or is doing the speaking for the customer. There may be a sudden new pattern of  changing the title or beneficiary of assets. These observations can put the financial professional in a tricky position. Reporting is optional, not mandatory, for such professionals under the New Jersey Adult Protective Services Act, N.J.S.A. 52:27D-409. ” 4.a.(1) A health care professional, law enforcement officer, firefighter, paramedic or emergency medical technician who has reasonable cause to believe that a vulnerable adult is the subject of abuse, neglect or exploitation shall report the information to the county adult protective services provider.      (2) Any other person who has reasonable cause to believe that a vulnerable adult is the subject of abuse, neglect or exploitation may report the information to the county adult protective services provider.”

Recently, the SEC adopted new FINRA rules (Financial Industry Regulatory Authority) designed to give some tools to financial professionals who are seriously concerned about these kinds of problems. The rules will become effective February 5, 2018. FINRA Rule 2165 is called Financial Exploitation of Specified Adults. It allows members to place temporary holds on disbursements of funds or securities from the accounts of specified customers where there is a reasonable belief that financial exploitation of these customers is going on. In addition, two amendments to FINRA Rule 4512 (Customer Account Information) now require members to make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer’s account. Many readers may have received such notices from your investment managers.

We have been involved in cases over the years where the first person to realize that something suspicious was going on was a banker or investment manager. Those alerts let to the placement of court-ordered protective arrangements which safeguarded the assets and protected the individual against further exploitation. The new rules should prove to be a helpful “arrow in the quiver” towards preventing financial exploitation of aged and infirm people in our communities.

Call us to discuss elder care planning and litigation …….. 732-382-6070