ADULT GUARDIANSHIP and/or CONSERVATORSHIP is appropriate when an individual lacks the ability to make or communicate significant responsible decisions about his or her health or safety (guardianship) or his or her financial affairs (conservatorship). In Guardianship cases the court removes powers and essentially returns the individual to the status of a minor. This does not mean that the Proposed Ward has made bad decisions; all adults have the right to make good and bad decisions, regardless of age. Instead, the Court focuses on the Proposed Ward’s ability to process information that he or she receives. Are they able to understand and evaluate the facts as presented? Can they weigh the pros and cons of a decision? Do they understand and appreciate the consequences of their decision? If the answer to one or more of these questions is “no”, then some form of Guardianship and/or Conservatorship is likely appropriate.

WHAT IS GUARDIANSHIP FOR AN ADULT?

Guardianship for an adult addresses the ability of the adult (proposed Ward) to make personal decisions. In this situation, the Court looks to “guard” the person. A person under guardianship loses the right to marry, to decide their residence or domicile, and to consent to medical procedures, among other things.

The Guardianship process is actually fairly straight-forward. Each of the three steps in the process is designed to protect the Proposed Ward’s rights. First, the Probate Court reviews the Guardianship petition to ensure that the parties seeking Guardianship have sufficient facts to show why a Guardianship is needed. Second, the Probate Court orders an evaluation of the Proposed Ward by a professional such as a psychologist or social worker. If the evaluation supports that a Proposed Ward needs a Guardian, then the matter proceeds to the third step – a hearing, where testimony is heard both in support of the Guardianship and in contest of the Guardianship, if there be any. The Court then makes a decision to dismiss the petition or appoint a legal Guardian for the Ward.

WHAT IS CONSERVATORSHIP FOR AN ADULT?

Conservatorship addresses the ability of the adult (the proposed Ward) to make financial decisions. As the name suggests, the Court seeks to “conserve” the individual’s assets. A person under a conservatorship loses a wide variety of rights including the right to make, modify or terminate contracts, to buy or sell property, to bring or defend a lawsuit, and to conduct business transactions. Essentially, the Proposed Ward forfeits all financial decisions to the Conservator. The court process for Conservatorship is similar to that described for Guardianship

Guardianship and Conservatorship are distinct processes, but the Probate Court takes both very seriously as both involve removing rights from an individual. The Probate Court offers a series of protections for the Proposed Ward throughout and after the Guardianship process. Quite often Guardianship and Conservatorship petitions are combined in a single court proceeding.

Guardianship also has its limits. While Guardianship may be an option for incapacity planning, it is by no means a solution to every problem. The Proposed Ward retains certain fundamental rights. Guardianship cannot force medical treatment of the Proposed Ward, remove voting rights, remove the ability to write a Will, or interfere with the Proposed Ward’s relationships with family and friends.

The best way to find out if guardianship and/or conservatorship is appropriate for your circumstance is to talk with us about it. Sometimes, establishing Guardianship and/or Conservatorship is the right course of action, and other times another kind of estate planning will suffice. We help our clients plan for the challenges that aging and incapacity can bring.

MEDICAID is a need-based program primarily designed to pay for the medical care for people with limited assets. In very plain terms, Medicaid is a “welfare” benefit not available to persons who have the means and ability to care for themselves. The program contains both federal and state components. The federal government creates the laws and regulations that provide the framework for Medicaid, and the states implement those regulations through their own sets of laws and regulations. Funding for Medicaid comes from both the federal and state governments.

MEDICAID PROGRAMS:

AGED, BLIND & DISABLED: These programs provide medical benefits to individuals who are over age 65, blind or disabled under the Social Security Administration regulations. The program most often seen in an Elder Law practice is Nursing Home Medicaid. In Nursing Home Medicaid, the Medicaid recipient pays her monthly income to the Nursing Home, and Medicaid pays the portion that she cannot afford. Once the recipient dies or no longer needs nursing home care, Medicaid can recover the money it spent on that person’s care from the beneficiary’s estate through a process known as Estate Recovery.
QUALIFIED MEDICARE BENEFICIARY (QMB): Individuals in this program are eligible to receive Medicare benefits but have such a low income that they have difficulty making the monthly Medicare premiums. The QMB program pays the individual’s monthly Medicare premium, giving these individuals additional access to medical care.
FAMILY MEDICAID: This program provides health care benefits for children and their families. The popular PeachCare for Kids program, a program that provides health insurance for children in Georgia, is a form of Family Medicaid.
WAIVER PROGRAMS: In the past, Medicaid benefits favored individuals in institutions. For example, it provided benefits for people in hospitals, nursing homes and in hospice. But what about those individuals who needed the same level of care of someone in a hospital or nursing home but who could receive care at home or in a group facility? In recognition that not all care must be provided in an institution and that it can be less expensive to care for someone at home, Medicaid created a series of waiver programs. These programs frequently provide more than medical care. They also provide services that help individuals maintain their independence, such as housing services, home health care, respite care, and even home delivered meals.

SPECIAL NEEDS PLANNING

As a country, we have decided that we will not allow our elderly and disabled to live on the streets. We recognize the value of their lives, and we decided to create programs to assist these classes of individuals to allow them to live with dignity. These programs are known as Public Benefits.

PUBLIC BENEFITS are “means” tested programs, meaning that the individual who receives these benefits has income and resources that are inadequate to meet his basic needs. People who satisfy this requirement can receive a host of benefits, including a monthly Supplemental Security Income payment, Medicaid, food stamps, and subsidized housing (such as section 8 housing).

The challenge arises when a family has a disabled child who probably will never be able to support himself. The family would like to be able to provide financially for this child, but any money the family gives the child will disqualify the child from his public benefits. This can leave the child without access to medical care, housing, or other programs that the child uses. Short of never giving the child money and disinheriting him altogether, what can a family do to give this child comfort beyond the minimum standard of living provided by public benefits?

Special Needs Trusts: In order to encourage families to assist their loved ones without putting their loved ones at risk for losing their benefits for a short term gain, Medicaid drafters created Special Need Trusts, a type of trust that can hold both income and assets for the benefit of the disabled child. As long as the trust is used to supplement and not supplant the child’s benefits, Medicaid will allow that the items in the trust do not exist for purposes of Medicaid eligibility. A Special Needs Trust can be created by a third party for the benefit of the individual, or they can be created with the individual’s funds. These trusts can be created as a Stand-Alone Trust or as a Testamentary Trust (to be established after a person’s death). They can be individual trusts or part of a larger “pooled” trust account. The source of the funds for the trust help determines the type of trust created as well as who can create the trust.

The rules governing the trust and distributions from the trust are particular. A non-compliant trust can disqualify someone from their public benefits retroactively. In other words, if the trust is not properly drafted, a person can lose their benefits going back in time until the date the trust became effective.

The MILLER TRUST is an IRREVOCABLE TRUST that may be established individually or jointly, and may be established by an Attorney-in-Fact on behalf of someone else. This trust is desgined to receive and hold all INCOME of the Grantor(s) when such income is over the threshold allowed to qualify for Medicaid/TennCare benefits, but such income is insufficient to pay for nursing home care. All income sources are assigned to the Miller Trust, all deposits are paid monthly to the nursing home, and any balance remaining undistributed after the death of the Grantor(s) is distributed to Medicaid/TennCare toward recovery claims.

The ASSET PROTECTION TRUST is an IRREVOCABLE TRUST that may be made individually or jointly. This trust is designed to hold the ASSETS (property and/or accounts) of the Grantor(s), typically with the Grantors’ children named as the beneficiaries/trustee(s), in order to exclude such assets when calculating eligibility for VA and/or Medicaid benefits. Transfers to this trust are subject to a “look-back” period. The Grantor(s) cannot retain nor receive any direct benefit from the assets held in this trust, EXCEPT the continued use of a primary residence. This trust has a separate tax ID number (EIN) and careful management and accounting is required to preserve the asset protection benefits of this trust.