Guardianship

Law assumes a person with disabilities lacks the equality or mental capacity to enter into a contract.

By Michael J. Amoruso, Esq.

Have you ever witnessed the distress of dignity being stripped from a person simply due to a physical disability that prevents the person from entering a store because her or his wheelchair cannot go up a step that leads into the building?

All Citizens Deserve Dignity and Equality
With the passage of the Americans with Disabilities Act of 1990 (ADA), Congress made a big leap forward in providing a means for individuals with disabilities to gain access and accommodations to give them the dignity and equality they deserve as citizens. Yet, even to this day, those of us with disabilities must continue to erase the historic, age-old stereotype that a person with a disability is a lesser individual than her or his able-bodied neighbor. Not a day goes by that my routine is not disrupted because I must advocate for my right to allow my Seeing Eye dog to guide me through the corridors of public buildings - and I am a lawyer. Can you imagine how difficult and demoralizing that would be for someone who doesn’t have the legal training and/or assertiveness that I possess?

You are probably wondering why I am sharing with you these daily challenges. Well, I have identified one inequity that can be fixed. Merely one year after the ADA went into effect, Congress made what appears to be a legislative drafting error that has the profound effect of codifying an unimaginable presumption in our country – the presumption that a person with disabilities lacks the equality or mental capacity to enter into a contract. We would not make that presumption about President Franklin D. Roosevelt, Helen Keller, Ray Charles or our wounded veterans!

What Are Supplemental Needs Trusts?
Specifically, in 1993, Congress added a wonderful concept called a “Supplemental Needs Trust” to the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993). This concept permits an individual with disabilities under age 65, who relies on Medicaid for health benefits and/or Supplemental Security Income (SSI) to survive, to have a Supplemental Needs Trust (SNT) established to hold his or her savings.

The benefit of the SNT is that it allows this individual to have supplemental funds to pay for daily living items that such benefits do not cover, such as:

• shampoo and other toiletries,
• haircuts,
• magazine subscriptions,
• tickets to the movie theater,
• clothing,
• hobbies,
• furniture for the home, and
• computers.

These items can make the difference between simply existing and enjoying life. The SNT can also pay for health care not covered by Medicaid, such as experimental or alternative medical treatments. The funds put in the SNT are often provided by a loved one or from a legal settlement.

In order to qualify for Medicaid or SSI, a person must meet financial thresholds. The SNT hedges against the risk of complete impoverishment and the inability to meet what most of us consider to be basic living needs. In exchange for that protection, upon the disabled individual’s death, the state is reimbursed from the trust assets for Medicaid benefits paid to the individual during his or her lifetime. Following in the footsteps of the ADA, this concept has helped advance the quality of life and opportunities for those with disabilities.

There are various kinds of SNTs that disabled individuals can chose from, depending on a variety of factors, such as the disabled individual’s age and the amount of assets that will be placed into the trust. A (d)(4)(C) pooled trust is administered by a nonprofit organization, where each disabled individual has a separate subaccount within the trust and the trust assets are pooled together for investment and management purposes.  Unlike (d)(4)(C) pooled trusts, (d)(4)(A) trusts are not administered by a nonprofit organization but rather the trust is managed by a trustee, sometimes a family member, for the sole benefit of the disabled individual.

In addition to the provisions established by OBRA 1993, USC §1396p(d)(4)(A) further provides that, to have the benefit of the SNT, the trust must be established by a parent, grandparent, legal guardian of the individual, or a court. Let’s revisit that point: The SNT must be established by the parent, grandparent, legal guardian of the individual or a court. Now, can the reader identify who is missing from this list of eligible individuals? That’s correct …the individual. Evidence of this unfortunate oversight can be seen in the very next sentence of the statute that offers protections to a similar SNT known as a “pooled trust.” In particular, that provision authorizes the pooled trust to be established by the parent, grandparent, or legal guardian of such individuals, by such individuals, or by a court.

Denying a Basic Right
Aside from the mistaken presumption that such individuals lack capacity to establish their own SNT, this omission results in inequitable and unnecessary legal costs and time for the individual with disabilities. Imagine the impact on a person who does not have the luxury of a living parent or grandparent and does not lack mental capacity that requires the appointment of a legal guardian. That person’s sole option is to hire a lawyer to petition the court to exercise a fundamental right that the person is born with in our country. Depending on one’s geographic location, this cost could range from $1,500 to more than $6,000.

This dilemma was recently experienced by a 62-year-old client of mine who was the victim of medical malpractice, which rendered her paralyzed and confined to a nursing home that charges over $100,000 per year for her care. She not only has the mental capacity to direct her care in the facility, but she also was the star witness in her lawsuit, testifying in court as to her ordeal. When it came time to set up her SNT, I had to inform her that she could not simply sign the SNT, but instead, since she did not have a parent, grandparent, or legal guardian, she had to petition the court to authorize it. My words cannot convey the shock on her face. My words also cannot convey the shock on the faces of the legislative assistants in Congress when I informed them that I, a blind and moderately deaf attorney who has drafted thousands of SNTs for clients, would not even be able to sign my own SNT in the future.

Congress Must Act
NAELA is working to change this injustice. NAELA will join forces with the Leadership Council of Aging Organizations and theConsortium for Citizens with Disabilities in lobbying efforts, as well as individual members of these coalitions. NAELA members are also taking individual action by calling on their Congressional Representatives and Senators to make this justified and cost neutral change to USC §1396p(d)(4)(A) to insert the phrase by such individuals so that those of us who have disabilities can regain the dignity we deserve and remove the misplaced presumption that we lack capacity due to our disabilities.

About the Author
Michael J. Amoruso, Esq., is managing partner of Amoruso & Amoruso, LLP, Rye Brook, N.Y. He is a member of the National Academy of Elder Law Attorneys Board of Directors. Mr. Amoruso has had hearing loss since he was young. As a young adult, he learned he was going blind. When he was a newly admitted attorney, one of his first assignments was to draft a Supplemental Needs Trust. This experience helped him decide to focus on Elder and Special Needs Law.

Day 8: Free Power of Attorney and Declaration of Preneed Guardian¹

The first 4 individuals who contact the LegalJourney Law Firm using the "Contact the Firm" option on www.legaljourney.com will receive a free Florida Power of Attorney and a free Florida Declaration of Preneed Guardian.

The LegalJourney Law Firm’s Day 8 offer includes: an interview with an attorney, a customized power of attorney, a customized declaration of preneed guardian and notarization² of your documents.

To find out additional details, please contact the LegalJourney Law Firm PLLC

¹This offer is available until close of business January 11, 2013.

²Notarization is only available to residents of the Tampa Bay Area

Day 4: Free Declaration of Preneed Guardian¹

The first 4 individuals who contact the LegalJourney Law Firm using the "Contact the Firm" option on www.legaljourney.com will receive a free Florida Declaration of Preneed Guardian.

When included as part of your Estate Plan, the declaration of a preneed guardianship can alleviate the stress involved with determining who will become guardian of a loved ones person and property during incapacity.

The LegalJourney Law Firm’s Declaration of Preneed Guardian free offer includes: an interview with an attorney and a customized Declaration of Preneed Guardian.

To find out additional details, please contact the LegalJourney Law Firm PLLC

Florida Statute Section 744.3045 Preneed Guardian States that “a competent adult may name a preneed guardian by making a written declaration that names such guardian to serve in the event of the declarant’s incapacity… ”

¹This offer is available until close of business January 7th, 2013.

Sometimes, bad things happen to good people. A tragic accident. A sudden, devastating illness. Have you ever wondered what would happen if a loved one became incapacitated and unable to take care of himself? While many associate incapacity with a comatose state, an individual, while technically functioning, may be considered incapacitated if he cannot communicate through speech or gestures and is unable sign a document, even with a mark. In some cases, an individual may have no trouble communicating, but may not be able to fully appreciate the consequences of their decisions and hence may be deemed to lack capacity. With proper incapacity planning which includes important legal documents such as a durable power of attorney, healthcare proxy and living will, the individuals named in such documents are empowered to make necessary financial and medial decisions on behalf of the incapacitated person without obtaining additional legal authorization. Without proper incapacity planning documents, even a spouse or adult child cannot make financial and healthcare decisions on behalf of an incapacitated individual. In such cases, a guardianship (or conservatorship) proceeding is necessary so that loved ones are able to provide for their financial and medical healthcare needs.

A guardianship is a court proceeding where a judge appoints a responsible individual to take care of the adult in question and manage his or her finances and make medical decisions. Once appointed by the court, the guardian will take over the care of the ward (disabled adult). When appropriate, the court may designate an individual “guardian of the assets” to handle the disabled person’s financial needs and another person “guardian of the person” to manage his healthcare needs. One person can also serve as both. If you are planning to serve as someone’s financial guardian, be prepared to possibly post a bond that serves as a safeguard for the ward’s estate.

To minimize the incidence of mismanagement or fraud, the court holds the guardian legally responsible for providing it with regular reports, called an accounting. Additionally, the guardian may not be able to make any major life or medical decisions without the court’s approval and consent. For example, if you have been named the guardian for a relative, you may not be able to sell his or her house without the approval of the court.

The best safeguard to avoid going through court to get a guardianship would be to establish a durable power of attorney over your finances and healthcare, authorizing a family member or trusted individual to act on your behalf in case of incapacity. While your agents have a legal obligation to act in your best interest they won’t have to post an expensive bond either. Make sure the power of attorney clearly states that it will be effective even if the principal becomes incapacitated.

Contact the LegalJourney Law Firm to schedule a consultation with an Attorney to discuss establishing your durable power of attorney today.

Day 8: Free Power of Attorney and Declaration of Preneed Guardian¹

The first 3 individuals who contact the LegalJourney Law Firm using the "Contact the Firm" option on www.legaljourney.com will receive a free Florida Power of Attorney and a free Florida Declaration of Preneed Guardian.

The LegalJourney Law Firm’s Day 8 offer includes: an interview with an attorney, a customized power of attorney, a customized declaration of preneed guardian and notarization of your documents.

To find out additional details, please contact the LegalJourney Law Firm PLLC

¹This offer is available until close of business January 11, 2012.

Day 4: Free Declaration of Preneed Guardian¹

The first 3 individuals who contact the LegalJourney Law Firm using the "Contact the Firm" option on www.legaljourney.com will receive a free Florida Declaration of Preneed Guardian.

When included as part of your Estate Plan, the declaration of a preneed guardianship can alleviate the stress involved with determining who will become guardian of a loved ones person and property during incapacity.

The LegalJourney Law Firm’s Declaration of Preneed Guardian free offer includes: an interview with an attorney and a customized Declaration of Preneed Guardian.

To find out additional details, please contact the LegalJourney Law Firm PLLC

Florida Statute Section 744.3045 Preneed Guardian States that “a competent adult may name a preneed guardian by making a written declaration that names such guardian to serve in the event of the declarant’s incapacity… ”

¹This offer is available until close of business January 5th, 2012.