The Landscape has changed for Guardianship in New Jersey

Procedures for filing for Guardianship are changing in New Jersey as a result of amendments to the Court rules that were effective 9-1-2016. The Rules are at N.J.R. 4:86-1 to 4:86-10. Guardianship petitions now must be initiated using a specific set of forms that have been prepared by the Administrative Office of the Courts.  A Guardianship Monitoring Program is being established in each county. After the pleadings are filed, the petitioner must complete a mandatory guardianship training program before the court hearing date, which includes watching a certain video about the Guardian’s many duties and responsibilities.  The alleged incapacitated person must attend the hearing unless his/her court appointed attorney and the petitioner’s attorney both certify  that s/he would be unable to attend due to physical or mental incapacity. Once the Judgment is entered, the Guardian must qualify as Guardian within thirty days. The physicians’ reports must specifically delineate the areas of functional decision-making in which the individual retains capacity.

There continue to be thorny legal issues that will come up in these cases.  Whether planning the care for a senior or a young person with disabilities, The law is bending towards limited guardianship, and sometimes it isn’t patently obvious that the individual lacks capacity in all respects. If the person who seeks to become guardian cannot be bonded due to their own prior financial difficulties or lack of personal resources, there may be a need to find somebody else to serve as guardian. The petitioner may need to obtain court permission for sale of real estate, or for placement of a mortgage on the property to pay off debt or support the individual in his/her home. The petitioner may wish to get court authorization for Medicaid eligibility planning including transfer of assets to spouse or other family members. The Verified Complaint, Order for Hearing, Physicians’ Certifications and Judgment are in a format that requires careful reading and additional legal drafting, in order to be sure that everything the petitioner knows and everything the petitioner seeks can be reflected in the forms that are submitted to the County Surrogate.

Call us for advice and representation in guardianship matters …732-382-6070

What if the Medicaid home care services aren’t provided? part II

Previously I blogged about the problems faced by Medicaid-eligible people living in home and community-based settings when there isn’t a sufficient provider network to provide the services needed to maintain them in their residences, or there is substantial delay in getting the services started. The issue is that the government is obligated to provide the services in the least-restrictive setting under the Olmstead decision and the Americans with Disabilities Act (“ADA”) Now there are developments in Ohio which deal with that problem. In Ball, Burba et al. v. Kasich, Governor of Ohio, the  plaintiffs alleged that “ the failure of defendants, Ohio’s governor and several state agencies, to provide them with home- and community-based services forces plaintiffs to rely on volunteer family caregivers to remain at home and places them at serious risk of institutionalization in a large Intermediate Care Facility (“ICF”).” The State moved to dismiss, saying that being ‘at risk” doesn’t give them standing to sue. The U.S. Department of Justice has now filed a Statement of Interest, asking to intervene (i.e., participate) in the case.

The USA wrote to the Judge that “The United States files this Statement of Interest to clarify that non-institutionalized individuals with disabilities who are not currently receiving state-funded home- and community-based services may bring a claim that a public entity has placed them at risk of institutionalization or segregation in violation of the “integration mandate” of Title II of the Americans with Disabilities Act. See 28 U.S.C. § 517. “

To me, this is an exciting development. Eligible people who aren’t receiving services to which they are entitled are clearly being injured by such governmental delay. People who need 24/7 care and lack sufficient care services in their homes are clearly at risk of nursing home placement. The injury could be irreparable.

Call us for advice and assistance with Medicaid applications and advocacy for services … 732-382-6070

Some trust assets may disqualify a Medicaid applicant

One friend tells another, “Put your assets in a trust so the nursing home won’t take them.” But this technique isn’t necessarily the “magic bullet.” The concept of countable assets and resources is broader under Medicaid law  than it is under some other bodies of law. Placing your assets into a trust structure might avoid some problems — like probate in a state where probate estate administration requires ongoing aggravating  interaction with the probate court, or help with Veterans Pension eligibility, or to preserve them for your children while protecting them against the kids’ future creditors. Doing so doesn’t necessarily insulate the assets in the event you apply for Medicaid.

A “resource” is an asset other than income to which the Medicaid applicant or his/her spouse has the right, title and interest, and power to convert the asset to cash. If the applicant’s assets are in a trust, the trust can be counted as a resource if there are any circumstances under which the trust assets can be paid to/spent on the Medicaid applicant. So whether the assets that are sitting in a trust can be counted as resources is a crucial issue. Medicaid is a means-tested program with strict resource limits, and it can take a very long time to receive the Agency’s decision about the application. So it can be a nasty surprise to find out  months down the road that you never were eligible because the assets in the trust are countable resources.

This happened in a recent New Hampshire case. The applicant, Ms. Braiterman,  had transferred some of her assets to an irrevocable trust in 1994. Her children were the beneficiaries.She was not a beneficiary, and she had resigned as Trustee, but she had the retained  power to appoint herself as trustee. She also had the power to impose conditions on the trustee’s appointment of income or principal to the beneficiaries. Now this may have been a great plan with reference to estate tax/cost basis planning. But when she applied for Medicaid years later, the assets in the trust were counted,  so she had excess resources and her application was denied. Why? Because as a condition for the trustee to make a payment to her children, she could have required the trustee to obligate the children to spend the funds on her..

A similar result occurred in Washington State.  Margaret  Berto applied for Medicaid. She and her husband, who died before her, had transferred  their assets into a revocable living trust. In his Will he created a trust for her, so at his death, some of  the revocable trust’s assets were transferred to the testamentary trust. She was the co-trustee and she was the sole beneficiary. Presumably the assets in the revocable trust were spent down prior to the time she applied for Medicaid. The Trust was counted as an available resource, and eligibility for Medicaid was denied.

What makes the excess-resource cases even worse is that by the time the applicant receives the bad news, s/he and her spouse  may have amassed an enormous debt to  the nursing home.

 Careful planning can prevent a crisis. Medicaid planning requires careful evaluation of the specific Medicaid rules, which often compel a different plan than estate and tax

Call us for advice and representation on Medicaid eligibility planning, applications and  appeals…. 732 – 382-6070

There are some limits on what Guardians in NJ can do without court approval

A Legal Guardian is a person appointed by a court to be the decision-maker for a person who is incapacitated as defined by law, and unable to manage all or some of his/her affairs. The court rules provide the complex procedures (N.J. R. 4:86-1 et seq), but the powers and duties of the guardian, as well as further details about how the court has to handle the case, are found in the statutes, such as N.J.S.A. 3B:12-48, 12-49 and  12-50.

The Guardian “steps into the shoes” of the “ward” (incapacitated person), which means that unless the Judgment of Incapacity and Letters of Guardianship issued by the court have specific limitations in them, the Guardian of the Estate (Property) may take care of banking, contracts, insurance claims, applications for benefits and insurances, securities transactions, hiring and firing of persons to work for the ward, and so on. The Guardian of the Person may decide where the ward will live, obtain and consent to any kind of medical treatment, and may decline consent to some medical treatment, without obtaining further court approval. However, certain transactions do require court approval.

For example, the Guardian may not make gifts to other people with the ward’s assets or make changes to the form of ownership or titling of a ward’s assets without court permission. See N.J.S.A. 3B:12-49 (Court can authorize Guardian to do so); 3B:12-58 (gifts) and 3B:12-50 and 3B:12-62. Several cases in New Jersey have confirmed the authority of the Court to allows guardians to transfer assets: In re Trott (Estate Tax reduction planning – 1972); Matter of Manuel Labis (Medicaid planning transfers to spouse – 1998), and In re Keri ( Medicaid planning, transfers to adult children – NJ Supreme Court, 2004). Based on these precedents,  we have also obtained court authorization to transfer assets to disabled children or to trusts for family members. The plaintiff needs to include this request in the initial Complaint for Guardianship, or the Guardian will later need to file a Verified Complaint and Order to Show Cause, serve it on all the interested parties, and go back to court.

Also, the ward’s real estate may not be sold or mortgaged without court authorization. Again, a Verified Complaint is required, with service on all interested parties.The Court rules and specific procedures are at N.J. R. 4:94-1 to 7. The Court may authorize a sale if satisfied that it is in the ward’s best interest.See N.J.S.A. 3B:12-49. The guardian needs to provide the Court with proof of value and in some cases the actual proposed contract for approval.

I must say, we  have repeatedly encountered situations over the years in which guardians thought they could “make annual exclusion gifts” or sign contracts for sale of property without going back to court. Most situations have legal remedies, but complications can ensue if the guardian doesn’t have authorization, not the least of which is a cloud on the title of the property.

Call us if you are filing for guardianship or need  post-judgment court orders … 732-382-6070