Significant changes are on the way for individuals, legal practitioners, and public officials involved in North Carolina incompetency and adult guardianship proceedings. The recently enacted Session Law 2023-124 mandates the consideration of less restrictive alternatives (LRAs) to guardianship prior to an adjudication of incompetency. There is a lot to cover on this topic; more than can fit in a single blog post. As a result, this post will focus on (i) introducing the statutory changes brought about by this new law and (ii) highlighting some key things the parties and the court will need to do differently with respect to petitions filed on or after January 1, 2024. S.L. 2023-124, sec. 7.13.
Changes Applicable to Less Restrictive Alternatives
Definition of “Less Restrictive Alternative.” The law adds and defines the term “less restrictive alternative.” S.L. 2023-124, sec. 7.1, amending G.S. 35A-1101(11a). A “less restrictive alternative” is “an arrangement enabling a respondent to manage his or her affairs or to make or communicate important decisions concerning his or her person, property, and family that restricts fewer rights of the respondent than would the adjudication of incompetency and appointment of a guardian.” S.L. 2023-124, sec. 7.1, amending G.S. 35A-1101(11a). The definition includes a non-exhaustive list of examples of less restrictive alternatives. They are:
- supported decision-making,
- appropriate and available technological assistance,
- appointment of a representative payee, and
- appointment of an agent for the respondent, including under a power of attorney for health care or finances.
Revised Definition of Incompetent Adult and Child. The law revises the definition of incompetent adult and incompetent child in G.S. 35A-1101 and expressly incorporates the term LRA in those definitions. Both definitions add a critical new clause: An adult, emancipated minor, or incompetent child “does not lack capacity if, by means of a less restrictive alternative, he or she is able to sufficiently (i) manage his or her affairs and (ii) communicate important decisions concerning his or her person, family, and property.” S.L. 2023-124, sec. 7.1, amending G.S. 35A-1101(7), (8) (emphasis added).
New Purpose in G.S. Chapter 35A. Another notable change is to G.S. 35A-1201, a key section in G.S. Chapter 35A that describes the purpose of guardianship in North Carolina. A new subsection (7) provides that “[f]or adults, guardianship should
- always be a last resort, and
- should only be imposed after less restrictive alternatives have been considered and found to be insufficient to meet the adult’s needs.” S.L. 2023-124, sec. 7.8, G.S. 35A-1201(7) (emphasis added).
New Roles and Responsibilities
Now you’ve read the changes, the inevitable next question is: what do I do differently in my role starting January 1, 2024?
Consider LRAs Before Filing. Any person who intends to file an incompetency petition should, prior to filing the petition, consider whether the respondent has LRAs in place and whether those LRAs are sufficient to meet the needs of the respondent. If a petitioner knows the respondent has sufficient LRAs in place at the time of filing and still proceeds to file the petition, a court may, after a hearing, find that (i) the respondent is not incompetent, and (ii) the petitioner did not have reasonable grounds to bring the petition. If there were no reasonable grounds to bring the petition, the court is required to tax costs of the proceeding to the petitioner. S.L. 2023-124, sec. 7.6, amending G.S. 35A-1116(a).
Make a Statement About LRAs in the Petition. The petitioner must include a statement in the petition that, to the extent known:
- identifies what LRAs have been considered prior to seeking adjudication, and
- explains why those LRAs are insufficient to meet the needs of the respondent. S.L. 2023-123, sec. 7.2, amending G.S. 35A-1106(4a).
The petition should include more than a bare assertion that LRAs were considered. It should identify the alternatives considered and include a description of why they were found to be inadequate to meet the respondent’s needs. The petition could include, for example, a statement that the respondent has a representative payee managing their Social Security benefits, but the arrangement does not adequately address the respondent’s other financial needs. Due to the respondent’s severe dementia, the respondent does not have the capacity to understand and execute a power of attorney or engage in supported decision-making to manage the remainder of their finances. Therefore, the petitioner may allege, the respondent is incompetent and needs a guardian of the estate.
Present Evidence at the Hearing. The petitioner must be prepared to present evidence at the adjudication hearing that not only shows that the respondent lacks the capacity to manage their affairs and to make and communicate important decisions but also addresses LRAs. The petitioner should present evidence at the hearing about whether there are LRAs in place and, if so, why those LRAs are insufficient to enable the respondent to manage their affairs and to make and communicate important decisions.
The Guardian ad litem Attorney (GAL)
Conduct Investigation and Report to the Court on LRAs. The GAL should not rely solely on the petitioner’s statements in the petition and should conduct their own investigation as to whether the respondent has LRAs in place. If there are LRAs, the GAL should examine whether the LRAs are sufficient. If there are not LRAs, the GAL should examine whether LRA options exist that could feasibly be implemented and enable the respondent to sufficiently manage their affairs and communicate decisions, thus negating or limiting the need for guardianship. The GAL should request a continuance of the hearing for good cause if more time is needed by the respondent to implement an LRA prior to the adjudication hearing.
The GAL’s investigation necessarily starts with a conversation with the respondent during their personal visit with them as well as conversations with next of kin, service providers, and others involved in the respondent’s life. The GAL should include the results of their investigation as part of their representation of the respondent in the proceeding, including in any report to the court.
Advocate for LRAs and the Respondent’s Autonomy. Guardianship should “always be a last resort.” S.L. 2023-123, sec. 7.8, amending G.S. 35A-1201(7). Part of the GAL’s role in effectuating that purpose is advocating for LRAs on behalf of the respondent, when appropriate. If LRAs are in place for the respondent that negate the need for plenary guardianship, the GAL should advocate for a finding by the court that the respondent is not incompetent. If there are LRAs in place that enable the respondent to manage some affairs but not others, or communicate some decisions but not others, then the GAL should advocate for a limited guardianship that allows the LRAs to remain in place and work in tandem with the guardianship.
Be Informed About LRAs. To carry out these responsibilities, the GAL needs to be informed about the various types of LRAs to guardianship and how they work. The list included in the new G.S. 35A-1101(11a) is non-exhaustive. As part of their representation of the respondent, the GAL should be prepared to discuss the various types of LRAs with the respondent and the court.
Present Evidence at the Hearing. The GAL must present evidence at the adjudication hearing about LRAs and whether those LRAs are sufficient. The GAL should keep in mind their obligation to represent the respondent’s express wishes and their authority to make recommendations regarding the respondent’s best interests. G.S. 35A-1107(c). It may be, for example, that the respondent believes that a power of attorney (POA) is sufficient to enable the respondent to manage their affairs and make and communicate decisions. The GAL’s representation of the respondent reveals that the agent under the POA is exploiting the respondent and that the respondent lacks capacity and insight into their own deteriorating condition. In that scenario, the GAL should present the respondent’s express wishes—the continued operation of the POA without guardianship—but the GAL may support adjudication and appointment of a guardian as a part of the GAL’s best interest recommendations.
Contest the Proceeding if There are Sufficient LRAs in Place. The respondent has a right to contest the incompetency proceeding. One way the respondent may elect to do that, either directly or through the GAL or other counsel, is by putting LRAs in place and raising the sufficiency of those LRAs as a defense to the adjudication proceeding.
Clerk of Superior Court
Do Not Adjudicate a Respondent Incompetent Unless LRA Standard Met. As of January 1, 2024, a respondent is not incompetent unless the petitioner shows by clear, cogent, and convincing evidence that the respondent either
- does not have LRAs or
- the LRAs in place for the respondent do not enable the respondent to sufficiently manage their affairs and make and communicate decisions. S.L. 2023-124, amending G.S. 35A-1101(7), (8).
For all petitions filed on or after the effective date, the court will need to ensure the existence and sufficiency of LRAs are addressed in every proceeding before entering an adjudication order.
The mere existence of an LRA does not automatically mean that the respondent is not incompetent under the revised G.S. Chapter 35A definition. Courts will need to consider the facts of each case and specifically the sufficiency of the LRA. For example, a respondent may have significant capacity limitations due to severe dementia. Prior to their incapacity, the respondent executed a financial power of attorney (POA) and a health care power of attorney (HCPOA). The evidence presented at the respondent’s adjudication hearing shows that the petitioner is seeking to change the respondent’s incapacity planning because the petitioner is dissatisfied with the fact that they were not appointed as the agent or the petitioner is otherwise unhappy with the agent’s decisions. There is no evidence of abuse or exploitation by the agent under the POA or HCPOA. The evidence demonstrates that the respondent lacks capacity due to dementia but the respondent is able to sufficiently manage their affairs and to make and communicate decisions through the LRAs. The respondent is not incompetent as a matter of law.
It may also be the case that the POA, HCPOA, or other LRA is operating sufficiently regarding some decisions but does not cover other decisions where the respondent lacks capacity, such as selling real estate or consenting to a certain medical procedure. In those instances, it may be appropriate for the court to adjudicate the respondent incompetent but to appoint a limited guardian with narrow authority tailored to cover only those specific gaps. This would allow the LRA to remain in place but also ensure that the incompetent adult has the necessary decision-making surrogate (the guardian) to cover those areas that the LRA does not address.
Consider Continuing the Adjudication Hearing. If LRAs would be appropriate but the respondent needs time to implement the LRAs after the petition is filed and before the incompetency adjudication hearing, the court may continue the hearing to allow time for the respondent to put LRAs in place. G.S. 35A-1108 (providing that the clerk may extend the time for the hearing for good cause). If there are concerns about an imminent risk of harm to the respondent or their property and the other requirements for interim guardianship in G.S. 35A-1114 are met, the court may appoint an interim guardian to act on the respondent’s behalf while the LRAs are explored.
Session Law 2023-123 is a significant shift for G.S. Chapter 35A proceedings. This post scratches the surface of the questions that will inevitably arise in the implementation of this new law.
The consideration of LRAs is one component of the law but there are other changes. My colleague, Timothy Heinle, has a post available on other changes resulting from this law related to the requirements surrounding a new notice of rights.
We will continue to identify and work through questions and issues related to S.L. 2023-124 here on the blog and in other arenas. In the meantime, feel free to reach out with your questions and feedback. I can be reached at firstname.lastname@example.org.