As you prepare your Will and estate plan, you will choose beneficiaries to receive your financial and personal assets. What happens if a beneficiary dies before you do? If you pass away before updating your Will to reflect the beneficiary’s death, how will your assets be divided?Continue Reading...
A recent North Carolina Senate proposal for the ballots in November of 2014 is an amendment to remove the right to vote in North Carolina for individuals who have been determined incompetent by a court of any state. If passed into law, Senate Bill 668 will take the right to vote away from many senior citizens and individuals with disabilities who have been adjudicated incompetent by a court. (An individual’s constitutional right to vote may be granted back if a court restores their competency.)Continue Reading...
Parents of special needs children need to carefully plan for their children’s future. Many families turn to special needs trusts to ensure their child will have access to finances after their deaths, without hindering the child’s ability to qualify for public benefits, such as Social Security and Medicaid.Continue Reading...
Special Needs Law attorneys advise individuals with special needs, disabilities, and their loved ones, on laws concerning their financial comfort and well-being. As National Special Needs Law Month, October is an excellent time to review or implement legal documents such as trusts and powers of attorney and sound financial planning for you and for family members who live with a disability. Meeting with a special needs law attorney will help you create a plan for critical situations you or your loved ones may face as they age with a disability or special need. Guardianship, housing issues, Medicaid benefits, and survivor and pension benefits can all be addressed to give caregivers and disabled individuals peace of mind.
During Special Needs Law Month, parents of children with special needs should revisit their wills and trusts to check that their child has a care plan in place and funds set aside to contribute toward their living and care expenses. Over 1 in 4 of today’s 20-year-olds will develop a disability before they retire, according to the Council of Disability Awareness. Issues with education and care for all stages of life may also arise, and special needs lawyers will help you navigate those as well.
North Carolina legal assistants working with estate lawyers may be interested in a day-long seminar, Estate Planning and Probate Practice for Paralegals, to be held in Chapel Hill on January 25, 2012. I will be presenting the portion on Assisting with Guardianships.
I've been at the North Carolina Guardianship Association conference for the last couple of days. One issue that I never really gave much thought to is that the Veterans Administration, as a federal agency, does not recognize state guardianships. Neither the adjudication of incompetency under state law nor the appointment of a guardian is given credence by the VA.
Thus, a guardian has no authority to deal with VA benefit payments, and must initiate a federal proceeding to attempt to gain that right. The VA will make its own determination of incompetency, based on different standards than state law. Then, if the veteran or spouse is determined to be incompetent, a federal fiduciary is appointed. This may or may not be the same person as the guardian.
The federal fiduciary deals only with the VA payments, and must use the money in accordance with a strict spending plan set by the VA. There is virtually no discretion involved.
This is a basic outline of initial procedures and considerations in an incompetency and guardianship proceeding in North Carolina. Such proceedings are necessary when an adult can no longer care for or make decisions for himself or herself and there are no feasible alternatives in place.
Petition for Adjudication of Incompetence is filed with the Clerk of Court.
- Anyone can file the petition.
- Must be served on the respondent.
- The Clerk appoints a local attorney as guardian ad litem (GAL) for the respondent.
The GAL represents the respondent, investigates and reports to the Clerk about the respondent’s condition.
- The respondent may retain his or her own counsel, in which case the Clerk may then dismiss the GAL.
- Any party can request a multi-disciplinary evaluation.
I'm leaving on vacation tomorrow, so it's a hectic day in the office, but I wanted to share the link to the pamphlet Responsibilities of Guardians in North Carolina, which is published by the NC Administrative Office of the Courts.
It provides a good summary of requirements and prohibited acts for guardians of minors and incompetent persons. However, it should not substitute for the counsel and services of an experienced guardianship attorney. In my view, it is important for ALL guardians to have a lawyer they can turn to to ask questions, prepare petitions and accountings, etc. The consequences of doing the wrong thing, or failing to do the right thing, are too great, and could even result in personal liability for the guardian.
Guardians should also be aware of the North Carolina Guardianship Association, which offers certification as a guardian and a guardianship manual.
Be back the week of October 19th...
Here's a change to North Carolina Guardianship law which took place October 1, 2008 that I didn't report earlier. North Carolina General Statute Section 35A-1251 was modified to allow a guardian of the estate to sell personal property up to $5,000 in value without a court order. The previous limit was $1,500. The limit applies in the aggregate to all personal property sold within an accounting period (generally one year).
Guardians must also get a court order before selling real property or spending principal belong to a ward. Income may be spent without court order, but all transactions must be reported in the accounting due each year.
While guardianship is unavoidable in some cases, the prior establishment of trusts and durable powers of attorney can avoid the time, expense and trouble of guardianship for most minors and incapacitated persons.
Clerks of Court, the ex officio judges of probate and guardianship matters in North Carolina Counties, can now order mediation in those cases. Parties to the proceedings can also request that mediation be ordered. See this memo on the Clerk Mediation Program from the North Carolina Court System website.
While I don't get involved in many contested matters, I have seen mediation work wonders. In many court systems, mediation is mandatory for civil proceedings. It can save time and money for the parties and help ease the crowded court dockets.
Hartford Fire Insurance Company has sued the Wake County, North Carolina Clerk of Court, alleging that the Clerk's office failed to properly oversee funds held in guardianships for three minor children. The court-appointed guardian transferred the funds to her personal account, causing the insurance company to have to make good on the guardians' bonds. See this article in the News and Observer for the full story.
This is a perfect example of why everyone, even young, working class folks, should make sure they have an estate plan in place. If this young woman had a will with a testamentary trust for her children, she could have named a responsible and knowledgeable trustee to handle the insurance money, avoiding the expense and other problems of guardianship. Instead, her children's financial future was left to chance.