TEN THINGS TO KNOW ABOUT ALTERNATE DECISION MAKING FOR AN ADULT DISABLED CHILD

1. Legal Capacity.  Legal capacity is the ability to understand the nature, consequences, and risks of one’s actions.  If a person lacks legal capacity, they cannot legally enter into contracts, make a Will, or consent to medical treatment.  Individuals over 18 years of age are legally presumed to possess this level of capacity, unless proven otherwise.  Individuals under 18 years of age are considered minors and are presumed not to have this level of capacity.  If a person does not have legal capacity, in addition to financial decisions, medical decisions are extremely important.  Individuals not having capacity may not:
   1. Marry
   1. Enter into a contract
   1. Execute Wills or Trusts
   1. Create of Power of Attorney
   1. Make critical medical decisions
   1. Manage their own finances
   1. Exercise certain civil rights
2. Evaluation of Capacity.  Healthcare professionals evaluate cognitive function to determine if a person can make reasoned decisions.  However, clinical incapacity does not necessarily strip someone of their rights.   Legal capacity is determined by state courts, usually probate courts.
3. Power of Attorney.  A Power of Attorney is an alternate form of decision making.  The Power of Attorney must be signed when the individual is an adult and has capacity.  A Power of Attorney is a legal document where the Principal authorized the Agent or Attorney-in-Fact to act on the Principal’s behalf.  The authority can be broad or narrow.  The Principal has to have legal capacity to sign the Power of Attorney.  It is very important to have the Power of Attorney executed as soon as the Principal obtains adulthood.  A General Durable Power of Attorney gives the Agent the power to do all financial actions on behalf of the Principal.  A Living Will or Advance Directive gives the Health Care Representative (the Agent) the power to make medical decisions.  A Limited Power of Attorney can be designed to give the Agent limited authority, such as:
   1. Banking
   1. Managing public benefit applications
   1. Power to buy or sell real estate
   1. Power to sell, buy or otherwise deal with securities and brokerage accounts

A Power of Attorney could take effect immediately or only after a doctor certifies that the adult child is no longer able to manage his or her affairs.  This is called a springing Power of Attorney.

• Revocable Living Trust.  A Revocable Living Trust can be established by the parents (grantors) with a competent trusted trustee.  The trustee can be given the authority to manage the trust assets and make distributions to designated beneficiaries such as the parent or parents and the child with disabilities.  On the death of the parent or parents, the funds can be distributed to a Third Party Special Needs Trust (TPSNT) for the benefit of the child with disabilities, or the Special Needs Trust language could be included in the original Living Trust document.  The Revocable Living Trust does not become effective until funded.
• Joint Ownership.  With joint ownership, assets can be placed in a joint ownership account among the parents and the child with disabilities.  If the child with disabilities becomes incapacitated, the parent or parents can withdraw the funds and establish a Third Party Special Needs Trust for the child with disabilities.
• Representative Payee.  A representative payee is an individual who acts as receiver of certain public benefits such as Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) for a person who is not fully capable of managing their own assets.  The representative payee assists with money management and protection from financial abuse.
• Supported Decision-Making (SDM).  This document is designed for people with limited capacity and enables them to retain their independence and legal rights by choosing trusted supporters to help them understand, weigh, and communicate choices.  It is a highly favored, less-restrictive alternative to full Guardianship.  The individual chooses a trusted family member or friend or professionals to provide this support.  The supporters help gather information, discuss pros and cons, and communicate their decisions, but they cannot make decisions for the individual with disabilities.  In New Jersey, the “Disability Rights New Jersey” can provide assistance.  The SDM is a written agreement, with a formulized plan outlining exactly which decisions the child with disabilities wants help with.  These include:
  • Healthcare
  • Finances
  • Housing

The SDM defines how the teams will assist the child with disabilities.

• Guardianship.  The New Jersey Superior Court (usually Probate Division) appoints someone to make decisions for an adult who lack capacity due to physical illness, disability, or mental deficiency.  Guardianship can be:
  • Guardian of the Person.  This type of Guardianship makes decisions regarding healthcare, living arrangements, and daily safety. 
  • Guardian of the Estate.  This type of Guardianship manages financial affairs, bank accounts, and property.
  • Guardian of the Person and Estate.

The downside to Guardianship is that the ward loses many rights.  These include:

• The ability to make medical decisions.
  • Control of personal finances
  • The ability to buy or sell property
  • The right to marry
  • The right to vote
• Conservatorship.  Conservatorship in New Jersey is a voluntary court ordered arrangement where the competent individual consents to have someone else manage their financial affairs.  It does not grant authority over personal or daily medical decisions.
• Goal.  The goal in using any of these tools is to grant as much assistance to the child with disabilities as necessary while limiting the loss of rights and loss of control to the extent possible.