GANJI 12TH ANNUAL CONFERENCE ON GUARDIANSHIP:“Guardianship and Human Rights: Knowledge is

Protection” 

Workshop 2C: Fiduciary Responsibility: Property vs. Person:

How Property Decisions Can Diminish Rights

Presented by Donald D. Vanarelli, Esq.

Certified Elder Law AttorneyRegistered Guardian

Accredited Professional Mediator

The Ward’s “Common-Law Right of Self-Determination”

A guardian is a surrogate decision-maker entrusted with protecting the ward’s fundamental personal rights of self-determination.

“Property” Decisions That Affect Personal Rights

• Placement of the ward in a long-term care facility

• Selling the ward’s home

• Making gifts to charity or to 3rd parties

• Using the ward’s funds for incidentals, vacations, entertainment

Standards Used to Protect the Ward’s Fundamental Rights:

• Statutes

• Case law

Common themes: the “best interests” standard and the doctrine of “substituted judgment.”

The “Best Interests” Standard

Objective standard: What would a reasonable outsider, looking in at a particular situation, decide is appropriate?

The Doctrine of Substituted Judgment

Subjective standard: The guardian acts as the guardian believes the ward would act.

The Substituted Judgment/Best Interests Standards

Incapacitated persons possess a “right of self-determination, the same as that of competent persons, except that the right of self-determination … must be balanced … with concern for their best interests.”

 

In re Roche, 296 N.J. Super. 583 (Ch. Div. 1996).

The Substituted Judgment/Best Interests Continuum

Start with the substituted judgment standard, resort to the best interests standard as fallback.

 

In re Conroy, 98 N.J. 321 (1985).  

The Substituted Judgment/Best Interests Continuum

Preferences articulated Pure substituted judgment approach(apply the ward’s clear wishes)

 Inconclusive indication of wishes Limited best interests approach.

(ward’s best interests aredetermined consistent with indicia of wishes).

 No indication of personal preference Pure best interests approach

(analyze relevant facts, other thanward’s wishes).

 

New Jersey Statutes

A guardian may, in his/her own discretion, use the ward’s income and principal for the ward’s “support, maintenance, education, general use and benefit.”

N.J.S.A. 3B:12-43.

New Jersey Statutes (cont’d)

The guardian should consider (a) the size of the estate; (b) the probable duration of the guardianship; (c) the ward’s accustomed standard of living.

N.J.S.A. 3B:12-45.

New Jersey Statutes (cont’d)

The guardian may apply to the court for authority to “make gifts to charity and other objects as the ward might have been expected to make.”

N.J.S.A. 3B:12-58.

New Jersey Statutes (cont’d)

The court may approve gifts or other actions in the “best interests of the ward.”

N.J.S.A. 3B:12-50.

New Jersey Statutes (cont’d)

The guardian should take into account any known estate plan of the ward.

N.J.S.A. 3B:12-62.

New Jersey Case Law

The guardian may act as “a reasonable and prudent man … unless there is evidence of any settled intention of the incompetent … to the contrary.”

In re Trott, 118 N.J.Super. 436 (Ch. Div. 1972).

New Jersey Case Law (cont’d)

Determining whether to permit gifts:

(1) the mental and physical condition of the [ward] are such that the possibility of her restoration to competency is virtually nonexistent;

 

(2) the [remaining] assets …, in the light of her life expectancy and her present condition of health, … are more than adequate to meet all of her needs….;

New Jersey Case Law (cont’d)

Determining whether to permit gifts (cont’d):

(3) the donees constitute the natural objects of the bounty of the [ward] by any standard….;

 

(4) the transfer will benefit and advantage the estate…;

New Jersey Case Law (cont’d)

Determining whether to permit gifts (cont’d):

(5) There is no substantial evidence that the [ward], as a reasonably prudent person, would, if competent, not make the gifts proposed….

In re Keri, 181 N.J. 50 (2004) (quoting In re Trott)).

Applying the Standards

When faced with a difficult decision regarding the property management of the ward, seek direction from the Court.

Property Management Decisions:

How would these situations be addressed under a Best Interests or Substituted Judgment standard? Is there a “right” decision?….

Example #1:

The ward wishes to remain at home but needs a higher level of care than that available at home.

Example #2:

The ward wishes to remain living at home but lacks the resources to maintain the home and its expenses.

Example #3:

The ward had a pattern of making gifts to charity before she was declared incapacitated, but continuing those gifts would jeopardize Medicaid eligibility.

Example #4:

The ward’s sole hobby has been watching the shopping network and buying items that others might consider frivolous.

Example #5:

The ward is a candidate for long-term nursing care and the guardian wishes to conduct Medicaid planning. However, the ward has happily spent years in a certain facility that does not accept Medicaid.

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