What Article 81 Guardians Need to Know About Medicaid Planning

Our NYC Attorneys Explain How an Article 81 Guardianship Could Affect Medicaid Eligibility

Article 81 Guardianships make sense for New York families who need to protect loved ones from the consequences of incapacity. However, being a guardian necessitates thinking ahead. By planning and reallocating resources, you could help ensure that your ward remains eligible for critical benefits like Medicaid—a task that is often easier said than done but which can help save tens of thousands of dollars on home care or assisted living.

Here, the experienced elder law and Medicaid planning attorneys at Landskind & Ricaforte Law Group, P.C. explain how an Article 81 Guardianship could impact your Medicaid benefits.

Article 81 Guardianships in New York

Every guardianship arrangement is a relationship between two distinct parties: the guardian and the guardian’s ward. In general, guardians have a legal right to make certain decisions on behalf of their ward, including many decisions related to money, property, and medical care.

Since guardians can exercise significant control over their ward’s assets, most guardianship arrangements are subject to court approval. If a judge agrees to enact a guardianship, the guardian may be subject to oversight or required to meet other conditions.

The 3 Types of Guardianships

The details of a guardianship arrangement are typically determined by the ward’s age and needs.

In New York State, there are several types of guardianships. The most common of these include the following:

• Guardianship of a Child. A parent or another person may request a Guardianship of a Child if one or both parents are unable to care for the child.
• Article 17-A Guardianships. An Article 17-A Guardianship may be approved if an adult has an intellectual or developmental disability that makes it difficult for them to make independent decisions. Under an Article 17-A Guardianship, guardians can exercise significant discretion when making decisions about the ward’s needs.
• Article 81 Guardianships. An Article 81 Guardianship is a more limited form of guardianship. Under most circumstances, guardians are only granted the powers necessary to help the ward meet their needs.

Since Article 81 Guardianships do not have age or disability-related requirements, they are often used to ensure the well-being of older adults, such as aging parents or a close relative diagnosed with Alzheimer’s disease or another neurodegenerative disease.

What to Know About Article 81 Guardianships

Any request to authorize an Article 81 Guardianship must meet or exceed a high legal standard. In New York, this typically means that a court must find that the proposed ward meets all of the following conditions:

• The ward is unable to meet all or some of their personal needs, their financial needs, or both.
• The ward is incapable of making reasonable decisions.
• The ward is incapable of realizing that their condition puts them at risk of harm. 

If the court approves the guardianship request, it may award the guardian limited power over the ward’s personal needs or property needs. Guardians may be able to help their ward pay their bills or enter into contracts, but they are broadly prohibited from making decisions about the ward’s mental health treatment and medication prescriptions.

How Article 81 Guardianships Affects New York Medicaid Planning

Although many wards can live largely independent lives, there may come a time when they can no longer fulfill their basic needs. Unless a guardian has the right combination of time, money, and experience needed to provide around-the-clock assistance, they may need to draw on New York Medicaid to pay for a home care aide or residency in an assisted living facility.

Since services like home care and assisted living can cost thousands of dollars per month, even fairly affluent families sometimes have no choice but to apply for Medicaid benefits. This could present an unexpected challenge—especially if the ward never planned for Medicaid and owns or controls assets in excess of New York’s Medicaid limits.

Guardians can sometimes work to overcome these challenges by:

• Applying for Medicaid benefits on their ward’s behalf
• Renouncing an inheritance on their ward’s behalf to ensure they remain eligible for Medicaid benefits
• Establishing a Medicaid asset protection trust or special needs trust to provide additional resources for the ward without risking their benefits eligibility

Since Article 81 guardians do not have total control over their wards’ assets, they must often request the court’s permission before making these kinds of strategic decisions. Approval is sometimes contingent on a family’s ability to prove that moving assets out of an account or into a trust is in the ward’s best interest—a requirement that could necessitate having a plan that addresses the ward’s physical condition and their long-term financial needs.

You don’t have to take your chances with Medicaid planning. Landskind & Ricaforte Law Group, P.C. could help you and your family obtain the benefits you need without risking a loved one’s access to critical public benefits.