Many people with developmental disabilities have sufficient mental capacity to execute wills, revocable trusts, durable powers of attorney, and beneficiary designations. A person has sufficient mental capacity if they have the ability to know the nature and extent of their property, understand that they are providing for the disposition of their property, know the natural objects of their bounty and understand in a reasonable manner the general nature and effect of their act in signing the document.
Guardianship is a formal court process through which a person is declared to be legally incapacitated. The rights and decision-making powers granted to the guardian are simultaneously stripped from the person with a disability. This status is reported to and maintained in the records of the Michigan State Police.
The law regarding guardianships of individuals with developmental disabilities states,
Guardianship for individuals with developmental disability shall be utilized only as is necessary to promote and protect the well-being of the individual, including protection from neglect, exploitation, and abuse; shall take into account the individual’s abilities; shall be designed to encourage the development of maximum self-reliance and independence in the individual; and shall be ordered only to the extent necessitated by the individual’s actual mental and adaptive limitations. MCL 330.1602(1).
Therefore, there is no automatic need to appoint a guardian for a person with a developmental disability, and guardianship is not mandatory when the child turns 18. The decision to pursue a guardianship should always be justified by need and should only occur after less restrictive alternatives have been considered such as:
- Representative Payee – controls only those funds paid out by the Social Security Administration (SSA) such as Supplemental Security Income or Social Security Disability. Similar to a guardian, the Representative Payee manages, and spends the funds and must account to the SSA for the funds. The SSA considers court determinations, medical and other evidence to determine whether the interests of the beneficiary would be served by such an appointment. The appointment of a Representative Payee is not a determination of legal incompetence.
- Powers of Attorney
a. Financial – A person appoints an agent to handle their finances. A durable power of attorney is preferred because it remains in effect even if the person is later deemed legally incapacitated. Its authority ceases upon the person’s death.
b. Health Care (Patient Advocate Designation) – A person appoints an agent to make health care decisions to the degree that they are unable to participate in decisions regarding their care, medical treatment, residence, etc. Its authority ceases upon the person’s death. (A person can separately designate a Funeral Representative to carry out burial, cremation, etc. wishes after death.)
- Trust – A person transfers their assets into a trust and designates the trustee, successor trustee and distribution of the assets during their lifetime and upon their death. The creation of the trust document and funding of the trust are carried out by the person’s attorney.
- Protective Order – is issued by the probate court upon filing a petition regarding a specific asset or a specific circumstance. This is generically a “one-shot-deal” to permanently resolve a financial issue that does not require ongoing court supervision. For example, changing the character of an asset to make the person eligible for a public benefit.