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Guardianship for Alcoholics

Guardianship for Alcoholics

March 3, 2014

Authored by: Luke Lantta

Originally posted on bryancavefiduciarylitigation.com

Knowing when to initiate guardianship proceedings for a loved one can be a difficult and personal decision.  When it comes to substance abuse, those proceedings can enter a grayer area than proceedings involving dementia, injury, or developmental disability.  At what point is an addict or alcoholic incapacitated?  What happens during moments of sobriety?  In In re Guardianship of Esterly (unpublished), the Court of Appeals of Minnesota dealt with some of these difficult questions.

I am the parent of a child with special needs…

Question: As the parent of a child with special needs, I know I need to have a Will, and probably a special needs trust, but do I really need to have a durable power of attorney for financial affairs?

Yes. Your Will is only effective if you die, whereas a power of attorney is effective while you are alive. If you became incapacitated due to an accident, disease or other cause, no one can handle your financial affairs. At that point, someone would have to hire an attorney and go to court to seek guardianship of your assets, so they have the authority to act for you and continue to pay your and your family’s bills.

However, appointing an agent in a financial power of attorney avoids this costly court guardianship proceeding. Your agent can continue to manage your assets and use your funds to meet the financial needs

I am the parent of a child with special needs…

Should my relatives give money directly to my child with special needs?

No.  Family members and friends should be cautioned against gifting money or property, or leaving money or property in their wills directly to your child except in ways that do not result in a loss of eligibility for public benefits or liability for the cost of your child’s care.  If you desire, a special needs trust can be established during your lifetime to accept such gifts.  It would be prudent to have grandparents’ wills reviewed by an attorney familiar with special needs trusts to avoid bequests that will have unintended and unwanted consequences.  Further, neither you nor your relatives should establish any Uniform Transfer to Minors Act (UTMA) accounts for your child, as these accounts may disqualify your child for Supplemental Security Income (SSI) and Medicaid.

I am the parent of a child with special needs…

I am the parent of a child with special needs.  Should I give money to a relative to care for my child with special needs after my death instead of giving the money directly to my child?

No.

Your expressed desires to your relative about the money create only a moral obligation on your relative and are not legally binding obligations that can be enforced. Further, if the relative dies, divorces or has financial problems, your child’s lifestyle could be negatively affected. Specifically, in a divorce, your child’s monies may be considered part of the marital property and part or all may be awarded to your relative’s spouse. If the relative dies, the money passes into the relative’s estate and goes to his or her beneficiaries or heirs, which might not be your child. Also, if your relative has to declare bankruptcy, creditors could put a lien on your child’s monies.

I am the parent of a child with special needs. Why is it so important for me to have a Will?

To ensure your estate is distributed according to your wishes.

If you die without a will and have assets in your own name, your assets will pass by your state’s law of “intestate succession,” which sets forth who in your family will receive your estate and in what order. This distribution may be contrary to your wishes and may result in your child being denied eligibility for public benefits (generally, an individual may not receive SSI or Medicaid if they have more than $2,000 in assets). For example, if you die without a will in some jurisdictions, the law requires your assets be divided between your spouse and your child, even though you may want your assets to go to your child only if your spouse is not alive. In addition, a court would have to appoint a legal guardian that is accountable to the court to invest and manage your minor

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