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Final Accounts and Discharge Applications in MHL Art. 81 Guardianship Proceedings

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Final Accounts and Discharge Applications in MHL Art. 81 Guardianship Proceedings

This program will review the process of settling a final account and discharging a guardian in a Mental Hygiene Law Article 81 proceeding in New York– i.e., ending the guardianship completely or facilitating the appointment of a successor guardian. The course will give a practical overview of how to prepare a motion to settle a final account a/k/a discharge application, governing law, step-by-step procedure, procedural intricacies, how the process differs from county to county (and sometimes from judge to judge), and other court customs. The course will review the many reasons a guardian (or their ward) may seek discharge of the guardian, including regaining mental capacity, death of the incapacitated person, the transfer of a ward to a nursing home when the guardian is a community guardian program, discharge for wrongdoing, and other purposes.

Transcript

Hi, I'm Daniel Reiter, and this is Final Reports and Discharge Applications in Mental Hygiene Law Article 81 Guardianship Proceedings. In this course, we're going to cover what a final report is and what a discharge application is in an Article 81 guardianship proceeding. This is really one way to think of as the end of the guardianship, or the termination of the guardian. So a quick overview, we'll discuss what is a motion to settle a final report, which is often also called a final account. I'll use the words interchangeably. It's also sometimes called a discharge application. I'll use the three of these interchangeably. The discharge application will be used, well, we will use the term discharge application, but a motion to settle a final report or a final account is the term that you'll hear most often. One thing to think of too is settling the final account is different than discharging the guardian. So the discharge application is the term I like to use because it's a little bit broader. So a guardian, as we'll see later in the presentation, will move to settle their final account to be discharged as guardian. They want their final report or final account to be approved by the court. That way, they can be discharged from any and all liability for the acts and activities that are incorporated in that final account. So the reasons for a discharge in Article 81 guardianship proceeding in New York, there are a number of reasons that a discharge of the guardian might be necessary. One very common is the death of an incapacitated person. If the IP has died, then the continuation of the guardianship, for obvious reasons is completely unnecessary. The guardianship may also have been intended to be a limited duration. The order and judgment may have said that the guardianship was limited to a year, or two years, five years for whatever reason, and the guardianship has come to an end. A guardian may want to resign. So the guardianship itself may not need to come to an end, but the guardian theirself may no longer wish to serve as guardian or may no longer be able to serve as guardian. The incapacitated person might regain capacity. So when the guardian was appointed, there were issues with their mental capacity, but now we may find that those issues have been resolved. Perhaps there are other alternatives in place that makes the guardianship unnecessary. And the guardian can be removed. This could be for wrongdoing or for other reasons. We'll also discuss the appointment of a successor guardian. So if the guardianship itself isn't coming to an end, if the guardian is either being removed, resigning, or discharged, a successor guardian, a new guardian may need to be appointed. We'll go over the procedure step by step, and we're gonna do that early on. And we'll do it again later in the presentation. I think going over it twice will make sense. The first is to give you somewhat of an overview, and then on the second occasion is going to sort of tie everything together, and it'll hopefully make more sense. Then we'll go over some takeaways, and as a bonus, I'll give you a few tips regarding how fees work in these types of proceedings. Okay, so the discharge statute begins at Mental Hygiene Law, which I'll just call MHL, Article 81.36. So pursuant to that statute, "The court appointing the guardian shall," so they must discharge the guardian where it's appropriate "if it appears to the satisfaction of the court that", and then the statute goes on to list a number of circumstances. So one circumstance is "the incapacitated has become able to exercise some or all of the powers necessary to provide for their personal need or property management, which the guardian is authorized to exercise. The incapacitated person may have died, or for some other reason, the appointment of a guardian is no longer necessary." So that four, well, that third reason, which is number four in the statute, is really a catchall. So the application for relief, for discharge of the guardian can be made by the guardian, it can be made by the incapacitated person, or it can be made by any person that's entitled to commence a proceeding under MHL Article 81.36. Note that we are talking using the term incapacitated person, which is abbreviated to IP. I think most people watching this who are familiar with guardianship proceedings in New York will be familiar with a person in need of a guardian, or a PING. This is someone who consents to a guardianship or a guardian being appointed for them, and there's no judicial finding or there's no necessity for a judicial finding of incapacity. Really, if I say incapacitated person, you should really think of PING as well. Although there might be some differences and minor nuances, for the most part, if it applies to the IP, it will generally apply to a PING, a person in need of a guardian. So the statute requires a hearing generally before the discharge. I practice mainly in New York City. Hearings, although required by statute, they don't always occur. So that's something to be aware of. It's just because the statute requires a hearing. Sometimes there's just no hearing at all. Sometimes the court will have a hearing that's very informal. It'll just be a court conference in front of a court attorney. It really depends. Other parts of the state, I'm not sure if that hearing requirement is abided by strictly. But in New York City you'll see that sometimes you'll find that there really is no formal hearing. So "To the extent that relief sought under this section would terminate the guardianship, the burden of proof shall be on the person objecting to such relief." And "If the guardian is discharged because the person becomes fully able to care for his or her property, the court shall order that there be restored to such person the property remaining in the hands of the guardian." So if somebody is restored to capacity, they don't need a guardian anymore, the guardian will need to return the property to them. The statute also says if the person dies, "the guardian shall provide for the person's burial or other disposition, and the cost shall be borne by the estate of the incapacitated person." In reality, what usually happens is there's a court or there's an order and judgment that gives the guardian the power to pay for the funeral from the incapacitated person's funds if necessary. So the statute basically says a discharge shall, well, the court shall discharge if the IP has become able. And in those circumstances, again, the guardian must return the property to the IP. Or the IP has died, and if the guardian provides for burial or their disposition of the IP, that cost by statute is borne by the IP's estate. But the reality is, is that often, well, let me back up. It would be borne by the IP's guardianship estate. It could also technically, if the guardian doesn't have money, it might be paid from the IP's estate, decedent's estate. So the application for discharge could be made by the guardian, the incapacitated person, or any person that's entitled to commence a guardianship proceeding. And the hearing shall be on notice. And as I stated, the hearing really is just a return date before a court attorney. Sometimes there is no return date, at least in New York City. And during COVID, a lot of this is done on submission. I guess arguably a referee's report under oath, maybe some would consider that a hearing, but that's not that common. Well, I wouldn't consider that a full in-person hearing. Okay, so let's go over discharge applications step by step. So the first step is generally, at least in New York City, and this procedure does vary between judge and judge, courthouse and courthouse, county and county. But generally this is done by order to show cause with a supporting affidavit. It can be done in certain cases with a verified petition, although usually it's by affidavit. All right? It can be done with a notice of motion. Some judges require a notice of motion. Now, sometimes you don't need to commence this proceeding by order to show cause or notice of motion. What'll happen is, we'll talk about this in a minute, but if the IP or PING has died, a statement of death will be filed with the court. And we're gonna talk about what that document is in a moment. But when that statement of death is filed with the court, some courts will just automatically generate an order directing the parties to settle their final account. So there might be an order that says that a party should take their final report or final account and submit it to a court-appointed referee. We'll get into that in a second. But for purposes of this presentation, I'm going to assume that the discharge application was commenced by order to show cause with an affidavit or an attorney's affirmation attached. Okay? And the court will sign the order to show cause. And usually the court will appoint a referee, and that referee is the court examiner usually. Okay? Now the court won't always appoint a referee. Well, let me go back. The court will appoint a referee and the referee's job is going to be to examine the final report. Their primary job is if there are funds and the person has passed away. Well, let me step back again. The primary purpose is to make sure that the accounting portion of the final report, the money, is in line with any bank statements or canceled checks. They wanna make sure the account is correct, that the account is supported by bank statements, canceled checks, receipts, any other backup documentation so that the handling of the incapacitated person's money, they can confirm everything was done properly. So they'll appoint a referee to review the final account. They'll set a time to file the final account or report if it hasn't already been done. So generally I will, depending on the case, file or serve the final account with the affidavit and order to show cause, but it depends on the circumstance. The guardian will then prepare the final report, all right, after the order to show cause or the order is issued, and they'll send that final report to the referee. The referee will review the final report and make either a recommendation to approve or they'll object to the final report. Again, an annual accounting or an initial report usually is going to encompass personal needs issues. If the person is also the personal needs guardian or the organization's personal needs guardian. And there'll be other information aside from financial information. Generally at the end of a guardianship, the primary focus, or the end of the guardian's time as guardian, the primary focus is the money, that it's been properly accounted for, the numbers add up, the veracity of the account can be confirmed with other paperwork. Once the referee approves the account, the court will generally direct the guardian to settle an order approving the final report on notice. And you can learn about submitting and settling orders from the New York Court's website, the difference between those. But the order approving the final report, generally there'll be a notice of settlement, and the order will contain a bunch of provisions. It will contain a summary schedule, all right, what money was brought in, what money goes out, a very broad overview of the accounting. It will talk about fees. Usually the referee will be entitled to a fee for their services. If the person is still alive, the incapacitated person is still alive and the guardianship is ending, the court will usually direct that the money on hand being held by the guardian be sent to the incapacitated person or the former incapacitated person. If the person has died, the money would generally go to an executor or administrator or other fiduciary of the estate if there is one, if not, usually the public administrator. There are cases where there's no money and the referee and the person has died, and there might not be a need for a referee. And so once that proposed order, oh, and the proposed order settling the final report will also have a clause generally that says once all of these monies have been remitted, and once everything we've told you to do in the order to settle the final report is done, you will submit, so you don't have to do this on notice, a proposed discharge order. So the guardian will give money or property to the IP, the referee, could be creditors or others, and they'll submit their proposed order to the court with canceled checks or bank statements, their proposed order discharging the guardian to the court with canceled checks, bank statements, et cetera. And then a final order will be issued discharging the guardian, and if there was a surety, from all liability. Well, that's what the final discharge order will do. Okay, so we're gonna go over that again later. But let's go over a general overview of what happens when the person dies. So let's talk now, we're in the area of concern that deals with the death of the incapacitated person or PING. If the incapacitated person or the PING has died, Mental Hygiene Law Article 81.44 is probably going to be the beginning of your journey. And this tells you what you need to do. There are usually similar provisions laid out in the order and judgment, and you will want to review the order and judgment because the order and judgment technically could modify, all right, 81.44 requirements. Usually it will just repeat what's in 81.44. But there could be something in the order and judgment, a particular idiosyncrasy or a particular rule or something that differs from the statute, a special requirement in a particular case. So you'll wanna review the order and judgment as well about what that says to do when the IP dies. So within 28 days of the death of the IP, the guardian must serve a statement of death. We'll go over what that as in a moment. Then within 150 days, they must serve a statement of assets and notice of claim, and the final report. To calculate these time periods, I use the general construction law section 25-a. And there is a good way to make sure you get it to the day. If you have a busy law practice, sometimes you may have to do these things closer in time to the deadline than you'd like. And I like to use this timeanddate.com calculator. It helps me just calculate an exact due date, the on or before date that I need to have this completed and submitted, filed, served, et cetera. So a statement of death is just a statement in writing and acknowledged, meaning notarized. But there'll be an acknowledgement. So it's like a deed. It'll contain the caption and index number of the guardianship proceeding. It needs to contain the name and address of the last residence of the deceased incapacitated person. The statement of death has to give the date and place of the death, and it has to list the names and last known residence of all persons entitled to notice of further guardianship proceedings pursuant to 81.16 , including the named or appointed personal representative of the incapacitated person's estate, if any. So 81.16 , usually in the order and judgment there will be a list of persons that are entitled to notice of further proceedings. And that comes from that statute. And so you will want to make sure that in that order and judgment, if it says someone's entitled to notice of a further proceeding, that they're served with that statement of death. So service of the statement of death has to be done on the court examinator within 20 days of the death of the IP, on the personal representative, like an executor of the estate, the local Department of Social Services, well, also I'm sorry, also on the public administrator or the chief fiscal officer of the county the guardian was appointed. And it has to be filed. The original has to be filed with proof of service with the court that issued letters of guardianship, meaning the commission and order and judgment. All right, so the statement of assets and notice of claim is due within 150 days. So this is very similar to the statement of death in its form, but not really in its contents. So it's gonna be a written statement under oath. It's gonna contain like the statement of death, the caption and index number of the proceeding, the name and address of the incapacitated at the time of death. And it's gonna go into detail about the property. So this is going to give information that you'd find in an accounting or a final account, but it is a different document. So you're gonna give a description of the nature and the approximate value of guardianship property at the time of the IP's death, and the approximate amount of any claims, debts or liens against the guardianship property, including Medicaid leans, tax liens and administrative costs, with an itemization and approximate amount of such costs and claims or liens. So the final account or final report is going to give a very precise, not a precise to the cent report on what the IP owned at their death, money that the guardian had expended, any administrative costs from the time of the previous final account. This is going to give an approximation and it's going to also set forth any liens or credits or debts that might be owed, administrative costs. If the guardian spent money from the IP's estate or advanced their own funds, they're gonna wanna put that in there if they wanna be reimbursed. And they have to serve this within 150 days, all right, upon the personal representative decedent's estate, or if there is none, on the public administrator or chief fiscal officer. So within 150 days, except for the property retained for a known claim or administrative costs, the property shall, meaning they must deliver all guardianship property to the personal representative of the estate or the public administrator. So the statute says that if there's property on hand, it should be delivered to the executor, administrator, fiduciary, personal representative, whoever may be appointed, and if none, the public administrator or chief fiscal officer. That doesn't always happen. They don't always ask for this money right away, and the guardian doesn't always remit it but that is what the statute requires. So the guardian can feel safe remitting those funds. Now, there might be other costs or claims that the guardian might need to pay. The guardian can withhold that money. They don't have to send it right away. So if the guardians advanced their own funds or during the decedent's life, perhaps there is a claim that they feel as guardians should be paid back from the guardianship estate, they can hold that money back. Usually we're talking administrative costs. There might be attorneys' fees in the future. There might be filing fees in the future. That's usually what you hold back. If there's a dispute as to the size of the property retained, it shall be determined by the surrogate court having jurisdiction of the estate. So that can make things a little complicated if you're not going to be in front of the same court necessarily that is reviewing the discharge application. Okay? The final report will be due within 150 days. So the guardian shall file his or her final report with the clerk within 150 days, and thereupon proceed to judicially settle the final report upon such notice as required by subdivision of 81.33. And the notice of the filing of the report needs to be on all persons entitled to notice of further proceedings. And the appointment, the order of appointment shall identify, well, the order of appointment's gonna identify all those persons who are entitled to notice of further proceedings. So that's the list you're gonna find. Now, the statute doesn't say you need to serve the final report on the public administrator, okay? If there is no fiduciary appointed, they'll get the statement of assets and notice of claim, but not necessarily the final report. In some counties, for instance, in Queens, it's customary that you serve the public administrator. So you'll wanna keep that in mind. Okay. So the death of the IP is one reason a guardianship may end, but there are other reasons. And one is the guardianship may be of a limited duration. So Mental Hygiene Law Article 81.15 talks about this. And pursuant to that statute "where the court determines that the person agrees to the appointment and the appointment is necessary, the court shall make a finding, will make a finding on the record of the duration of the appointment," okay? And "Where the petition requests the appointment of a guardian for property management" for the AIP, the alleged incapacitated person, "and the court determines that the person is incapacitated, the court shall make the following findings on the record: the duration of the appointment." So basically this statute requires either a PING or an IP, in either case when the order and judgment is issued, to make a finding as to the duration of the appointment. So per this statute, every order and judgment is gonna have the duration of the appointment. Most guardianship proceedings, certainly in my experience, are of an unlimited duration. Of course, someone can always go back and terminate the guardianship or get the guardianship terminated by the judge if circumstances change or someone convinced the court that there's no longer a need for a guardian. But in some cases, as we're gonna discuss right now, it's specifically at the beginning set for a limited duration. So this case, the matter of BH is a really good example of why you would have a limited duration guardianship. I think that this is probably a textbook example of a case where you would have this type of arrangement. So in this case, the PING, which is a person in need of a guardian, somebody who consented to the guardianship was in an accident while he was working and fell off a scaffold. He hit his head, all right, when he fell. He suffered a brain injury. All right? He had a court action pending. It was, I'm gonna presume, a personal injury action. He stated that he wanted a guardian to help him because he had memory problems and needed someone to make decisions for him. Now the court evaluator went out, investigated and stated that even though the person indicated that he was having difficulty managing his finances, he admitted that he has not had any problems with paying bills. So he was able to do some stuff but he was not able to do other things. And the court found that the person is a person in need of a guardian, a PING, of his property for a limited duration. And the guardian's powers were limited to assisting the person with the personal injury litigation and limited to the duration of that litigation. Okay? Of course, well, not of course, but the court found that the guardianship could be extended beyond the duration of the personal injury litigation upon good cause. And they found that this was the least restrictive form of intervention consistent with the person's functional limitations, as the statute requires. So this was somebody who had impairments that did not affect all aspects of their life, but made it very difficult for them to manage a personal injury litigation that resulted from the accident that caused those impairments. So we had a limited duration, limited guardianship. And so at the end of this guardianship, the guardian is going to really account probably for the proceeds of the personal injury action, whether it's a settlement, whether there was an award or a judgment. When that is over, that's what's likely gonna be in their final account. Probably the only thing will be monies that were either expended or costs in accordance with the litigation or the proceeds from a settlement or an award, if any. So another reason the guardianship could end is resignation. So the court may allow a guardian to resign or they may suspend the powers of a guardian. There's also a specific provision about when a guardian is engaged in more service. So a Article 81 guardianship may be terminated only upon application of a guardian, the IP or the other persons who are entitled to commence a proceeding, just a reminder. And I wanna tell you, I've heard stories of courts denying an application when a guardian resigns. These are not firsthand accounts, but I have heard stories. So it is something to be aware of. If you wanna be appointed a guardian or you're accepting a guardianship, you could have trouble having that, having a resignation if at some point you decide you no longer wanna serve. Generally though, the court is not going to want and really will not have somebody serve as guardian if they don't want to. Really another very good example of a reason a guardian might resign is a conflict. So there's a number of reasons. Here's reason one, a conflict. So this is for a Matter of Foster where a Catholic family center, a non-for-profit organization presumably, was a court-appointed guardian of Ms. Foster who was an incapacitated Catholic. They used the termed incompetent. This is not really what they should be using. It should be incapacitated. They requested to be removed as guardian of a person due to a potential conflict and the possibility of being required to remove food and water in violation of both its and Ms. Foster's religious and moral values. So they said this was not something they could do, and the court granted their request. A hearing was disposed of because there was no objection by any party. And the court found they cannot force the guardian not to resign or voluntarily withdraw. Now that last rule obviously flies in the face of what I just told you, stories of people trying to step down as guardian and being rejected by the court. The second to last issue is the hearing was disposed of. Not sure in my view the statute allows these things, but I often don't see a hearing. There are other cases similar where the guardian or the IP just doesn't like the guardian. They'll be removed. But for purposes of this, we're talking resignation. So one's a conflict. Here there was something, a power that the guardian could not exercise due to its religious and moral values. So the court needed to appoint someone else. Another common reason is the health of the guardian. There might be a health reason the guardian can't serve. Perhaps they have a very serious disease, they've been diagnosed with something, or they're having health problems and it's affecting their capabilities in life. Another reason of a resignation might be the guardianship is no longer necessary. So in this case, the Matter of Yehuda C is just an example of the circumstances giving rise to the necessity of a guardian were satisfied, well, it's a guardian of the property were satisfied with the creations of an SNT. So the IP in this matter was incapacitated. A guardian of the property was appointed, but a guardianship of his person had been issued in Israel and that's the jurisdiction where the family was now. And there was also an SNT in place. So it wasn't really necessary for the guardianship to continue. A move is another reason. Somebody might move out of state. The guardian might move out of state. So the IP may end up going to another state for whatever reason, either because the court approved it or the IP may have just picked up and left. The guardian might end up moving to another state. If you are a attorney on the part 36 list and you're an independent guardian and you live in New York state, perhaps you've decided to move to another state, you have a spouse that just got a great job, you are sick of New York, whatever the reason might be, you probably aren't gonna be serving as guardian in New York. It would be impractical to make those four visits a year. Okay, so another reason a guardian may resign is that they're a community guardian program and the IP moves to a facility. So just to give you a general overview before we go into more detail, the Department of Social Services in, I believe, every county of New York state, or at least in many counties have a contract with non-for-profit corporations that serve as community guardian programs. So if DSS petitions, well, let's think about it like this. DSS APS in New York City is a subdivision of the New York City Human Resources Administration, Department of Social Services or DSS. APS, Adult Protective Services, may go out and find that a person needs a guardian appointed for them. Client of theirs at APS is in such a position that the Adult Protective Services program in and of itself they feel isn't enough or whatever other supports in the community out there aren't enough, and a guardian needs to be appointed. They will petition the court to have a guardian appointed and they'll nominate in their petition a community guardian program that they have a contract with. These community guardian programs by law, which we'll go into more detail in a second, can only serve for people in the community. So for instance, if a community guardian program that has a contract with DSS in any given county in New York state is serving as guardian, and that person ends up needing to be in a nursing home for a long period of time or perhaps the rest of their life, they can't serve as guardian. And they will have to make a motion to be removed or to resign as guardian. So let's talk about this in detail. So Social Services Law Section 473-d defines community guardian program, hospital and residential facility. So Community Guardian Program is a non-for-profit corporation incorporated under New York law, or say local government agency, which is contracted with or has an agreement with the local social services official, the Department of Social Services, usually in any given county, to provide conservatorship or committeeship. This is old statute. Clearly now it would be guardianship, conservatorship and committeeship have been replaced by guardianship in New York, services to eligible persons as provided in this title. Okay? Hospital means a hospital is defined in the public health law or the mental hygiene law. But this just means hospital. You can think of any hospital as the definition is hospital, what you would think of, you would think it is. There's no surprise. And residential facility means a facility licensed pursuant to such and such a statute. Generally you would think of a nursing home as a residential facility. So the same statute, subsection d , now define, talks about community guardian programs need to petition the court to relinquish their duties as a conservator or committee as a guardian if a person for whom the community guardian program is appointed regains capacity, or a capable friend or relative becomes available to serve, or the person must enter a hospital or residential facility on a long-term basis. So that's the key, what I'm talking about here at the end is they have to enter a facility or a hospital, residential facility on a long-term basis. Now the regulations start defining what this long-term basis means and they go into a little bit more of these definitions. So alright, the community guardian program must petition the court to relinquish its duties if the person enters a hospital or residential facility with the expectation of a long-term stay, which will exceed six months, and there is no anticipation of return to the community. So the person's not going home and their stay is expected to exceed six months. So that's really important. If the community guardian program has a person in the hospital, many community guardian programs are gonna have wards that go into the hospital. And boy, the courts, at least in New York City, are already inundated with discharge applications that have full dockets. I can't imagine if a short-term stay required a guardian to resign. But this is really intended to be a long-term stay in a hospital, in a residential facility or residential facilities. Now, I do wanna talk about why would somebody be in a hospital for more than six months. I have not read, I don't know what the intent was of the department when they made these regulations. But I'll take a guess that either the person's in a hospital for so long that they're permanently there, but I would think they might have had state hospitals or state facilities for the mentally ill in mind. I'm not sure, but I think they may have. And there's no anticipation to return to the community. But really I think what I've seen in my practice most common is someone enters a nursing home, and that checks off the residential facility definition. So somebody who is otherwise in the community now can't be in the community. And so the regulations also state that when the community guardian program intends to petition the court to relinquish its responsibilities, they must notify the social services district in writing for its approval. And they need to tell them the reasons of the proposed relinquishment of responsibility, their proposed plan to meet the adult's continuing service needs. And so they're gonna write to the social services district, they're gonna say the person's in a nursing home and they're gonna be there for a while. What do they need to do? What's their plan? Well, their plan might be that they're receiving SSI right now, but maybe they need to work with the nursing home to become representative paid for SSI. Maybe they need to notify the nursing home, a family member, remit information to them, maybe medical records, something else. So that might be part of their proposed plan. Maybe what's very common is the proposed plan is to surrender an apartment that the person rented. And so maybe the person rented an apartment and that will need to be surrendered. So when DSS or the local services, social services district gives the approval to the guardian, they must present their proposed plan to the court along with their petition to relinquish their responsibilities. So part of their motion to settle their final report or to be discharged is going to be sending their plan to the court. And the court may agree or not agree with the plan. They may impose other conditions. It really depends on the circumstances, the judge, the court, whatever. So one thing I just wanna speak about for a second, just an interesting little tidbit, the regulations and the statute speak of petitioning the court to relinquish the duties. Now, I have in the past for quite a while when I represent a community guardian program, actually had the guardian draft a verified petition in support of their order to show cause to settle their final report and to be discharged as guardian when somebody moves to a facility from the community, usually a nursing home. At some point, I'm not sure what happened, two separate clerks said no petitions. It has to be an affidavit because a petition's a pleading. And so I would just file a petition as an affidavit and e-filing and that was fine. It said petition but it was e-filed as an affidavit. But it's quite interesting because I don't think that it was the legislature's intent for there to be confusion in that regard. Did the legislature mean that it needs to be a verified petition, that it should be a pleading? Did they just mean you must move the court? I'm not sure, but as a matter of practice, at least in New York City, I'm now doing affidavits. I'm not doing a petition. So I will have my clients sign affidavits. And also in many cases I represent the community guardian program. I'll just prepare an affirmation in support of the order to show cause. I'm familiar with the file. I feel able to do it. So another reason aside from resignation and the other reasons we went over was the person might regain capacity. So this is all part of a change in circumstances. So one example is in this case Matter of Banks, where a person in need of a guardian moved to terminate the guardianship and the guardian opposed. But the person who was a PING withdrew their consent. And for a number of reasons, the court, as you can see in these facts, didn't feel that the continuation of the guardian was necessary or perhaps even permitted. But you'll see this in situations where somebody has functional limitations. Their circumstances have improved. Perhaps they had a serious mental illness and they're taking a new medication. Perhaps they received other services and supports. Perhaps the ailment was a temporary ailment to begin with. For all different reasons, someone could regain capacity, or their capacity can increase substantially where the necessity of a guardianship isn't necessary. A guardian can be removed, and it's usually done upon motion. Now, a guardian can be removed for a number of reasons. They might fail to comply with an order, they might be guilty of misconduct, or the statute 81.35 says "any other cause which to the court shall appear just." So the court really has broad discretion here. The motion to remove the guardian can be made by the person examining the initial and annual reports. In other words, the court examiner will make a motion. And you can only imagine the court examiner might be going through a annual report and notice that perhaps there's some financial shenanigans going on here, or within the context of their duties, the person's not submitting the annual report, even though requests are being made. The IP can ask that the guardian be removed, and any person entitled to commence a proceeding under Article 81. So I think the classic case in New York is a gentleman named Robert B. Kress. Well gentleman, I guess, according to the court might be the incorrect word, but he was a guardian who stole approximately $2.1 million total from 17 different people. So I think it was probably necessary to remove him. How he got away with that. I don't recall the facts. I reviewed these cases some time ago, but it was really a very large case and it's quite a bit of money to steal. So taking funds or disobeying a court order, and this this case I think is really In re Joshua. So the guardian is removed for taking funds or disobeying a court order. This is a really great example. I would urge anyone to read this case who's doing guardianship work. The person, there was no order that allowed this guardian to pay themselves or compensate themselves from the IP's funds without a further court order. They did anyway. Now if you read the decision, you'll note that the court kept telling them to put the money back, put the money back, and they never did. They refused to return the funds. So actually this was in a trust account, this money. And this person was also the guardian trustee. And the court removed them. And if you read this case, and I think about this case in the context of my own experience, let's say there's somebody who's new to guardianship, they've never served as guardian before. And they're a lay person and they don't understand how they're supposed to get paid and they take money out. Well, if they put the money back in or they show the court mercy, the court's probably likely to forgive them if there's no harm. But in this case, the person took the money out of the trust and didn't pay it back like they were supposed to. Well, then they're gonna get terminated and there's probably going to be other consequences as well. So I think the moral of the story is you can make mistakes as guardian, but own up to the mistake and rectify the mistake, act in good faith, but also try not to make the mistake obviously in the first place. Look at the order. Make sure that you're allowed to take funds from the trust or the guardian's funds. There could be a deterioration between the IP and the guardian. There might be a terrible relationship between them as you can see in the Matter of Helen S. Those are the facts in that case. And in some cases it's not the guardian's fault. The person may just not like the guardian for no good reason. And that's part of their functional limitations is paranoia or they just don't like the guardianship, and it just becomes impossible for the guardian to work with the person and the person to work with the guardian. And that deterioration may or may not be the guardian's fault. Some cases it is, some cases it isn't. But in that case, the court can remove the guardian. And if you're being removed as guardian, you'd hope the case, this is probably the fact scenario you'd like is you have an incapacitated person, a ward who's doesn't like you and there's not really a reason not to like you, except that they don't want a guardian appointed in the first place. And they're uncooperative and you just can't do your job as guardian in a practical sense because of the lack of their cooperation. So you wouldn't want it to be for theft or something else. So let's talk about successor guardians. On what occasions will the court appoint a successor guardian? Well, generally when one is needed. So depending on the circumstances from case to case, a successor guardian might be needed. If there's a guardian of the property and person and they're resigning because of serious health issues or they're moving out of the state, the circumstances haven't changed regarding the guardianship itself, just the guardian's ability to do their job. So yeah, the court's gonna appoint a successor guardian. I had one case where originally the court appointed my client, the wife of the person as the guardian. She was later removed. We went back; there was a temporary guardian. We went back; temporary guardian had no objection. The court revisited. There was either a change in circumstances or it seemed fair for my client to continue resuming the guardianship, and she was appointed guardian again. So there's no real clean, one-size-fits-all reason a court will appoint a successor guardian. But usually it's because another person who would probably be more appropriate to serve as guardian is available and the court deems them fit to serve, or the current guardian has to go and the person still needs a guardian. So let's review this again, step-by-step discharge application. And let's think about it in the context, all right, of what we just saw. So I wanna do though is think about it specifically in the context of the death of an incapacitated person because I think that's the easiest way to think about this proceeding or these steps. So let's say the IP has died and you make a motion by order to show cause an affidavit to settle your final account. The court appoints a referee, and the order to show cause itself sets a time for you to file your final report. Okay? The guardian then prepares the final report. Obviously they're gonna wanna have it done in 150 days. They'll send it to the referee. Now let's say the person didn't have any money; the final report might be waived. The necessity of a referee might be waived, and that order to settle final account might have a summary schedule of zero and there's no one to be paid any money. And the court says they're going to discharge the guardian at the same time as they settle the final account. And then there's one clean order. Maybe that's not the case. Maybe there is $600,000 in the guardian's estate. Well now, they're gonna have to remit the funds to the public administrator or the fiduciary of the estate within a certain amount of time. They might wanna withhold some funds because they've hired an attorney and there might be court costs. The order and judgment may allow them to pay certain bills that they were allowed to pay during the life of the incapacitated person. And maybe some of those bills weren't paid and they still want to pay them. Maybe they're negotiating some of those bills. Usually there's not a negotiation element, but it's possible. Okay? And so the order to settle final report would look different in that circumstance than the previous. They'll serve the order to settle a final report with a notice of the settlement. The courts will sign it. They'll make the distributions at the OSFA, order to settle the final account or final report requires. And then they'll submit their proposed discharge order to the court with receipts, canceled checks. And then the court will issue the final order. And again, every judge and every court has their own idiosyncrasies. So if you're in Bronx County or you are in Nassau County, it might be different. If you're in Kings County, it might differ from judge to judge. It all really depends. So just a couple takeaways. All right? The procedure, as I just said, varies from court to court. Customs, laws, practices will vary from court to court and judge to judge. All right, remember your timelines and deadlines, all right? And make sure you calendar them so you can meet them. Experienced attorneys will know statements of death, motions to settle final accounts, final reports, serving these things timely is not least in my practice, doesn't always occur in New York City. And the courts generally don't enforce these things extremely, in an extremely strict manner. If you're a little late, it doesn't really matter. But in other counties, for instance, when I practice in Long Island, the courts do hold guardians much more accountable for meeting those deadlines. So you'll wanna meet them. That's always something you'll wanna do. All right, we spoke about the reasons for discharge, and there's a whole host of reasons the guardian might need to be discharged. Maybe there's health reasons. Maybe there's no longer a need for a guardian because the person regained capacity. Maybe the circumstances have changed. Maybe the guardian acted improperly. You'll wanna think about who needs to be served. You'll wanna look at the order and judgment and the statute. Make sure anybody that needs to be served with a statement of death, notice of statement assets of claim, with a final report, they'll be served. Will there be a hearing and do you need to prepare for one? Right. So if there's a hearing, the court might have certain expectations. Maybe there's an apartment that needs to be surrendered by the guardian before the court will approve the discharge. Sometimes it happens in cases where the person's alive. There might be all sorts of steps that the court wants the guardian to go through. And maybe there'll be some sort of objection to the discharge and they'll need to be a hearing. Whatever the case, you wanna prepare for it. So last thing I wanna talk about is just a tip regarding fees. So I just wanna go over two points here. So one is a case called Matter of Garcia, where a person was appointed guardian and they collected a very large sum of money. A few months after they were appointed, the incapacitated person died. And if you looked at the order and judgment and you calculated their commission, it was extraordinary. And it probably wasn't equitable to give them that amount of money from the incapacitated person's estate given the amount of work that they did. So the court in quantum meruit reduced the fee. So the moral of that story is if your order and judgment says you can be paid pursuant to SCPA 2307 or SCPA 2309, or it says at a later date the guardian's compensation will be determined, remember that the court can change this. So you might have an arrangement where the court says the fee arrangement is that the guardian gets paid a stipend of $300 a month. If circumstances change and the guardian finds that the IP owns more money than the court originally knew, and at the same time finds that the person needs more support and the guardian needs to spend more time, the guardian can always go back to court and ask for more. In that same light, if the person doesn't have money and the court originally finds that there's going to be a large monthly stipend, perhaps, the court may need to reduce the guardian's commission and compensation. So you'll wanna pay attention to that. Another thing I find interesting is when a guardian is either represented by a counsel or represents themself as counsel. So this really applies to attorneys who also serve as independent guardians. And from Part 36.2 says that no guardian shall be appointed as his or her own counsel, and no person associated with their law firm or guardian shall be appointed as counsel, unless there is a compelling reason to do so. Now in most counties that I practice in outside of New York City, the guardian, whether they're an attorney or not, will generally have the court appoint another attorney for them when they need to do lawyer stuff. That seems pretty clear to me, the reason being 'cause Part 36 says they can't unless there's a compelling reason to do so. My experience in New York City, in the five boroughs of New York City is that this rule is all but ignored. If you are an attorney guardian, you will just informally do attorney things as a guardian, and then you can ask the court to pay you attorney's fees for that attorney thing that you did. So for instance, you might be serving as guardian and you may also be an attorney, and you find you need to change where the person lives. You're making change of abode application. They're deteriorating, they can't afford to be at home, the support at home is no longer practical and they really need to be in a nursing home because of a level of support, is just an example. You might wanna make an application to move that person to a nursing home. Well, doing the work to determine that is really the guardian's job. And they might be paid at an hourly rate of maybe $200 an hour, or they may be paid an annual rate of a flat sum, whatever the arrangement is. But as an attorney, if they're making a actual motion in court, they should be getting attorney's fees for that. So they might be paid from the incapacitated person's funds at their hourly rate as an attorney, not the lower guardian rate. So in New York City, you don't really need to usually make a formal application at that point. The court will just allow you at the end of the application to submit your affirmation of services and they'll award you a fee in the final order. So it's something to know that it differs from county to county and state to state. Okay, so that concludes our presentation and thank you so much.

Presenter(s)

DRJ
Daniel Reiter, JD
Attorney
Law Firm of Daniel J. Reiter, Esq.

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