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No one wants to see a loved one become unable to make decisions for him or herself.

If this happens, however, a court may appoint a substitute decision maker, called a “guardian” in New York or a “conservator” in Connecticut, to make decisions regarding a person’s personal care, finances, or both. A guardian or conservator is only appointed as a last resort if other, less restrictive alternatives, such as a power of attorney, are not in place or are not working.

Anyone interested in the well-being of an individual who may be incapacitated — called the “proposed ward” or “alleged incapacitated person” — can request a guardianship or conservatorship for that person. The person who files the petition does not have to be the person who acts as the guardian or conservator. An attorney is usually retained to file a petition for a hearing in the court where the proposed ward regularly resides, where he or she is physically present, or where he or she has assets. In New York this is done by filing in the Supreme Court of the appropriate county, and in Connecticut it is done by filing in the Probate Court of the appropriate town.

New York and Connecticut courts require that the proposed ward be present at the hearing unless he or she is unable to meaningfully participate in the hearing. The court will either appoint an attorney for the proposed ward or a court evaluator to make this determination. The attorney represents the proposed ward’s interests, and a court evaluator is a neutral third party who investigates the circumstances of the proposed ward and makes a recommendation to the court as to whether a guardianship or conservatorship is necessary. In some instances, the court appoints both.

At the hearing, the court determines if the proposed ward is in fact incapacitated and, if so, to what extent. A guardianship or conservatorship must have the least restrictions possible while bringing the necessary assistance to the proposed ward, and will be specifically tailored to that person’s individual needs.

If the court determines that the proposed ward is indeed incapacitated, the court then decides who an appropriate person is to act as guardian or conservator.

Who Can Be a Guardian?

A guardian can be any competent adult — a family member, a friend, a neighbor, or a professional guardian (an unrelated person who has received special training, usually an attorney or social worker). In some cases, the proposed ward may have nominated the person they would like to serve as his or her guardian or conservator in advance by executing a durable power of attorney (in New York) or a durable power of attorney for health care (in Connecticut). A court will generally honor these wishes if the proposed ward was competent at the time they signed the document, and as long as the nominee has not rendered himself/herself ineligible for any reason. The proposed ward can also make his or her wishes known during the proceeding, if able. If two individuals wish to share guardianship duties, courts can name co-guardians.

There is a strong preference for the guardian to be a family member or person who has been involved in the proposed ward’s life before the guardianship or conservatorship. However, if a person is found to be incapacitated and a suitable guardian cannot be identified, courts can appoint a professional guardian, as discussed above, or a public guardian, which is a publicly financed agency that serves this purpose.

To learn more about guardianship in New York or Connecticut, speak with the qualified elder law attorneys at Kommer Bave & Ciccone LLP.

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When an individual cannot manage his or her finances, courts can appoint a personal needs guardian, financial guardian, or both. A financial guardianship is for those who need help handling money.

Depending on the jurisdiction, financial guardianship may also be called guardianship of the property or conservatorship of the estate.

What Financial Guardianship Entails

Financial guardianship gives the guardian the authority to oversee the protected person’s finances and access to money to pay bills. In many cases, the terms of the arrangement require the guardian to seek court approval before making certain financial actions on behalf of the ward, such as selling assets.

The ward’s money goes into a guardianship or conservatorship account. The guardian or conservator is required to account for all of his or her actions, and files a full account of transactions each year which is reviewed by the court.

When Do Courts Order Financial Guardianship of an Adult?

Generally, courts appoint a financial guardian when a person is unable to provide for his or her property management and cannot understand or appreciate the consequences of this inability. Examples include:

• Individuals who frequently forget to pay bills, to the point that the bills go into collections or utilities are shut off.
• Individuals who have become vulnerable to financial exploitation. For example, suppose a person makes significant payments to an online scammer. In that case, a loved one might petition the court to become the person’s guardian to protect them from falling victim to future scams.
• Individuals with diseases and disabilities that prevent them from understanding their financial needs. For instance, dementia can cause people to have executive functioning difficulties that impact their ability to handle money.

Just because someone has these issues does not necessarily mean that a financial guardianship is appropriate. For example, if an individual has no assets, and has moved into a nursing home that receives the individual’s income, there is probably no need for a financial guardianship as there are no assets to manage. A court will also not appoint a financial guardian if the person has a valid and effective power of attorney.

Alternatives to Financial Guardianship

While providing protection and support, guardianship also limits an individual’s autonomy. As a guardianship involves having a person declared to be legally incapacitated, it can take away certain rights of the individual such as the ability to enter into contracts, rent a home, and engage in other financial transactions. Many states, like New York, require courts to explore less restrictive alternatives to guardianship before appointing a guardian. Those facing challenges with financial decisions should, along with their loved ones, first consider other options such as powers of attorney, trusts, or representative payees.

Financial Power of Attorney

Suppose an individual is having some difficulties with bill-paying but still can make decisions and understand the consequences of their choices. In that case, the person may have the capacity to execute a power of attorney for property management and a medical directive or health care proxy for personal needs management.

Compared to financial guardianship, a durable power of attorney can protect individuals’ rights while allowing someone to step in and help with monetary decisions. A person does not lose his or her ability to make financial transactions by executing a power of attorney, but rather gives his or her agent the ability to also perform on his or her behalf. The durable power of attorney also survives a person’s incapacity, allowing the agent to continue to act on the individual’s behalf even if the person loses capacity later on.

Under financial guardianship, it is more difficult for the protected person to change the arrangement if disagreements with the guardian arise. The protected person must petition the court to terminate or modify the guardianship, and the court must agree with the reasoning to make such a change.

Revoking a power of attorney is, by comparison, straightforward. As long as the individual who made a power of attorney retains capacity, they can withdraw their power of attorney at any time for any reason. They can also appoint a new agent without judicial oversight.

Those wondering whether they need someone to help with finances should speak with the elder law attorneys at Kommer Bave & Ciccone LLP.

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