Beware the Contested Guardianship!

Guardianship proceedings exist to create protection for people who are no longer capable of making decisions for themselves. Often, a relative, such as an adult child, will bring a guardian petition when the mental abilities of an elderly person has started to deteriorate. Sometimes, a guardian petition is brought by a concerned family member to protect the elderly person from the exploitation of another.

In my experience, most guardianship petitions are uncontested and well-intentioned. But sometimes, a guardianship petition becomes just another phase in a bigger dispute among adult children. Far too often, disputes between adult siblings get heated because there is a belief that mom has money.

A contested guardianship case can become a problem quickly. In Virginia, if a guardianship petition is successful, and the elderly person's estate has the funds, all of the costs, including lawyers' fees, are paid from the elderly person's estate. If the adult children cannot agree on what is best for the elderly parent, and litigation ensues, this means that money that should be used for mom's care winds up getting eaten away by lawyers' fees.

Morally, adult children should give serious thought to just how hard they want to fight in a contested guardianship case. In fighting to control what happens to mom and her assets, the children could wind up throwing her money away.

Do I Need a Special Needs Trust for My Child’s Litigation Award?

Parents of a disabled child may spend long hours fighting insurance companies in a lawsuit. Finally, they may come to a point where an acceptable settlement is offered, or a verdict rendered. This is it, right? This is the end of it?

Perhaps not. Many times, trial attorneys and well-meaning parents caught up in the heat of a lawsuit focus on winning the case, and do not consider how the child will receive health insurance as the child gets older.

A child cannot stay on a parent’s health insurance forever. At some point, a child who has become and adult is no longer eligible for coverage in most employer-provided health insurance policies. If the child is unable to work, then that child will most likely need to rely on public benefits, such as Supplemental Security Income or Medicaid.

These public benefits programs, however, are means tested. That means, a person must only have a minimum amount of income and assets available to them in order to qualify. A large litigation award, if not structured properly, can prevent a child from qualifying for Medicaid.

The answer to this dilemma could be a special needs trust. A special needs trust is a legal arrangement where one person, a trustee, holds and manages some assets for the benefit of another, called the beneficiary. The beneficiary of the special needs trust does not own the assets, and can never direct how the assets are to be used. However, the trust agreement provides that the assets are to be used for the benefit of the disabled child, at the discretion of the trustee. By arranging the assets in this way, they are not “available resources,” and will not disqualify the beneficiary for the public benefits program. But, they do remain available to be used to supplement the beneficiary’s benefits.

Talk to your lawyer to see if a special needs trust is the right solution for you and our disabled child.