George is 79 years old. He has always been the sole wage earner for his household. The home, investments, and most of the bank accounts are in his name alone. George was diagnosed with early onset dementia several years ago and it has progressed to the point where he is now completely incapacitated. George’s wife of 45 years needs to pay his mounting medical bills, as well as the property taxes and monthly household expenses.  The bank has told her that they cannot allow her to access the bank accounts or any information because she is not an owner of the accounts.

Now what?

If George had done some advance-planning and executed a Durable Power of Attorney appointing his wife as his agent, the wife would have no problem accessing his accounts and handling his day-to-day affairs for years to come. A Durable Power of Attorney is a legal document in which you appoint an agent to make financial decisions on your behalf during your lifetime for convenience or in the event you become incompetent or disabled. However, a Power of Attorney needs to be legally executed when the individual is fully competent and of sound mind. Once the individual becomes incapacitated, it is too late to sign that Power of Attorney document.

Like many people, George did not realize how important a Power of Attorney document is or he just never found the time to do his own estate planning. The lack of planning now requires his wife to hire an attorney to pursue legal Guardianship for George.

The type of Guardianship that would be required in George’s situation is governed by Article 81 of the Mental Hygiene Law of New York State, often referred to as an “Article 81 Guardianship.”

The family’s first step would be to sit down with their own attorney to go over all of the family demographics and history, the medical history, current care and diagnosis, and all of the finances.  The attorney will draft the Petition paperwork as a comprehensive narrative with all the facts and allegations.

An emergency type of motion is filed in NYS Supreme Court, along with the court filing fees. If the Court agrees to hear the case, they will set a court date and require that all of the necessary parties be served with legal process, notifying them of the court date and location. The alleged incapacitated person must also be served in person by a disinterested individual or process server. The court will assign a trained Court Evaluator (which is often times an attorney) to investigate the claims in the Petition. The Court Evaluator will contact all of the family members and conduct interviews. They will also review all medical records and finances. They may request that the Petitioner and/or other family members provide additional documentation and/or information and background for their review and reference. The Court Evaluator is then charged with submitting a Report and Recommendation to the court detailing all of their findings and their ultimate opinion and recommendation on the case. The Court Evaluator is essentially acting as the ‘eyes and ears’ of the court. They are paid an hourly rate for their services.

Oftentimes, the court will assign the alleged incapacitated person an attorney of their own. If the alleged incapacitated person has a known attorney, the court will do their best to appoint that individual. If no previous attorney-client relationship exists, the court will assign an attorney of their own choice. This attorney is charged with representing the position of the alleged incapacitated person throughout the proceeding. If the alleged incapacitated person is completely incapacitated and/or unconscious, this attorney will use their best judgment to advocate for the best interests of their client. It is important to note that this attorney will be paid an hourly rate for their services, as well.

In the event any other family members either choose to participate or want to contest the proceeding, they too would be wise to hire their own counsel. When there is an objection to the relief requested in the Petition, formal litigation will likely ensue.

If the case has not settled and after a period of investigation and/or various court dates, the court will hold a hearing to determine if the Guardianship is necessary.  Additional service of process of the final Court Order upon all interested parties will be required. Once appointed, the Guardian(s) will need to complete a series of initial paperwork (including an accounting) for filing with the County Clerk, as well as completing a Guardianship training course. The Guardianship will be maintained with constant Court oversight. The Guardian will be required to file annual accountings that are submitted to the assigned Court Examiner every May (not the same as the Court Evaluator, but also paid for their services). The Guardian will ultimately have to file a final accounting and Petition the Court to be formally discharged after the incapacitated person has passed away.

It is clear to see, taking the time to sign a Durable Power of Attorney is certainly easier, less-costly and more private than going through with an Article 81 Guardianship proceeding through the courts. This holds true not only for the principal but more so for the family and agents that would be tasked with this labor-intensive proceeding. An Article 81 Guardianship proceeding can certainly be a blessing to many, as it gives them the ability to help a loved one in a dire situation.  Yet, it should remain the absolute last resort. One can avoid unnecessary court involvement and oversight and save the family time and thousands of dollars while still giving them the full legal ability to handle a loved one’s affairs, simply by planning ahead and executing a General Durable Power of Attorney document.

If you have any questions about the above material or wish to speak to an attorney, please contact us at (716) 204-1055.

Pfalzgraf, Beinhauer & Menzies, LLP is located at 455 Cayuga Road, Suite 600, Buffalo, NY 14225.

Elder Abuse, Financial Abuse