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

“Can you just do a quit claim deed?”

“Can you just do a quitclaim deed?” is a common question brought to our office. Sometimes it’s a question by a child, other times by the spouse of the senior citizen homeowner. There’s a concern about “saving the house” when nursing home care is looming on the horizon. Leaving aside the complex question of whether such a transfer will disqualify the senior from receiving Medicaid benefits to pay for their nursing home care, there is still the question of who has the authority to sign the Deed. The fact that it’s a “quitclaim” type deed — as opposed to a Deed that is prepared after a thorough title search with a guarantee that the title is clear — doesn’t change the underlying fundamental of who can sign the Deed.

Of course, the Deed has to be signed by the owner of the property. If that person has advanced dementia and no longer has capacity to understand the nature and purpose of signing a Deed — even if s/he can pick up the pen and sign his or her name — such a deed might be void or voidable on the grounds of incapacity. Cases dealing with that situation go way back and New Jersey and other states have had these cases for at least a hundred years.

Is there someone who has legal authority to sign a Deed making a gift of the property? Many powers of attorney (POA’s) are limited. Some are limited to banking transactions. I had a case in which the POA did not include any real estate powers. Some POAs have broad powers but do not authorize the agent to make gifts or transfer assets. In still other cases, there is no power of attorney at all. Again, the person with dementia would need to understand the nature and purpose and effect of signing a (new) power of attorney; they have to be able to interact with the attorney who is trying to prepare legal documents for him or her.

A guardianship may be required, which is a process that can take several months even if  no one is contesting it. The Courts in New Jersey do have the power to authorize a Guardian to sign a Deed to transfer ownership of the ward’s property, provided that the  five-part “test” of the case of In re Keri is satisfied so that the best interests of the ward are protected.

So yes, we can write a “quit claim deed.” The question is — can it be signed? if so, by whom? And is it smart to do so?

Call for advice before embarking on senior care asset protection planning … 732-382-6070

Homemade Powers of Attorney can create expensive legal problems

I ran into a situation recently that I thought I’d share with my readers since it’s the type of thing that happens over and over again. The Elder person is living in New Jersey but owns real estate in another state that needs to be listed or sold because he is applying for Medicaid to pay for his nursing home. The person has Alzheimers Disease and no longer has capacity to sign legal documents. The person who takes care of everything for him up here in New Jersey holds a power of attorney that they made using an “internet form.” It is titled “General Durable Power of Attorney Effective Upon Execution,” and was signed by the elder a few years ago in front of witnesses and a notary.

It sounds like this document gave authority to the agent right away, right? The problem is that the very first paragraph then says ” I ____ designate ____ to act for me, if I should become disabled or legally incapacitated. This document shall become effective upon the date of my disability or legal incapacity and shall not otherwise be affected by my disability or incapacity.” The first sentence creates a Springing Power of Attorney. The second sentence is a mixture of language from Durable Power of Attorney and Springing Power of Attorney, an obvious conflict.

The named agent found that they had to produce current doctors’ opinion reports attesting to the elder’s incapacity. The agent has lost weeks and weeks of time gathering this evidence and submitting it to insurance companies, banks etc. for legal review.

And there is another problem: in the state where the property is located,  springing powers of attorney are not valid. The agent learned this when they hired the real estate attorney there. So in order to sell the property, it will probably be necessary to file a guardianship action. And generally speaking, you can’t initiate a guardianship action in one state if the individual is permanently residing in another state …. you initiate it where the individual resides and then have to go through a separate set of proceedings in the other state. Needless to say this has all created a complicated and potentially expensive legal tangle that involves two states and two lawyers and substantial delay.

As I like to say, careful planning [with legal advice] can prevent a crisis.

Call us for advice on estate planning and long-term care planning … 732-382-6070.

NJ issues new Guardianship Judgment & Annual Report Form

The Supreme Court of New Jersey recently adopted a new standardized Judgment of Incapacity for Guardianship cases, to be used by the probate courts throughout the state. It’s called the Revised Model Judgment.

The Judgment is the final court order signed by the Judge which generally appoints the Guardian of Person and Property and places an array of obligations and limitations on the Guardian. The purpose of the Model Judgment is to create state-wide uniformity.

Every year on the anniversary date of the guardianship, the Guardian is required to file an Annual Report. New reporting forms have been adopted – Report of Well-Being (for medical/health) and Accounting Reports. 

The forms can be found at: http://www.judiciary.state.nj.us/forms.htm#guardianship. You can also download these forms all at once from this blog: Click here to download.

The annual reports are designed to protect the person under guardianship by improving the guardian’s accountability. Also, they provide the county Surrogate’s Court  with information for the guardianship monitoring activity that is conducted. The new report forms are much more detailed. The report of well-being requires submission of a letter from the doctor reviewing the overall medical condition and treatment of the person under guardianship. These new forms must be used by all Guardians appointed from now on, and must be served on the adult family members as well when they are filed.

We have collected the recommended forms to file for this Report. We have also added “PRINTABLE” versions of those forms which otherwise require Adobe Acrobat Reader software to view. You can download our ZIP archive of Annual Guardianship Report forms by clicking here.
For assistance with your guardianship annual report obligations, or with other guardianship issues, please contact us online, or call us at 732-382-6070.