Less Restrictive Alternatives and Incompetency Restoration Proceedings

In North Carolina, when an adult is adjudicated incompetent and guardianship is ordered, guardianship is permanent until the first of these two developments occur: (i) the ward’s competency is restored, or (ii) the ward dies. G.S. 35A-1295(a).

The recently enacted Session Law 2023-124 amended the definition of incompetency and introduced requirements to ensure the consideration of less restrictive alternatives (LRAs) before a petition for incompetency can be granted. These statutory changes are born out of a recognition of the seriousness of declaring someone incompetent, and to encourage, where appropriate, the use of alternative arrangements that impose less restrictions than plenary guardianship. The changes are effective as to petitions filed on or after January 1, 2024.

This post considers how newly added LRA requirements may affect not just the beginning of a new case, but also later in guardianship, in an action to restore a ward’s competency resulting from a petition for adjudication filed on or after January 1, 2024.

Brief Overview of LRAs

S.L. 2023-124 added the term ‘less restrictive alternative’ to the definitions section of G.S. Chapter 35A. An LRA is “[a]n 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.” G.S. 35A-1101(11a). A non-exhaustive list of examples is provided in the statute, including

• supported decision making,
• appropriate and available technological assistance,
• representative payees (for example, with Social Security Income), and
• health care or financial power of attorney agents appointed by the respondent.

The definition of an incompetent adult was also amended to read that someone “does not lack capacity” and is not incompetent “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.” G.S. 35A-1101(7). (Note that the definition of an incompetent child, meaning someone who is at least 17 1/2 years of age, was similarly amended by S.L. 2023-124. For ease of reading, this post uses the term incompetent adult to refer to both groups of individuals.)

For LRA-related requirements and suggested steps for clerks, appointed guardian ad litem (GAL) attorneys, and others, see this post by my colleague, Meredith Smith.

Restoration, Generally

The possibility that a ward could have their competency restored by the court is provided for in G.S. Chapter 35A, Article 3. The guardian, the ward, or any other interested person may seek restoration of the ward to competency by petitioning the clerk exercising jurisdiction in the case. G.S. 35A-1130(a). (Note, that while the restoration statute uses the word “petition,” the process is initiated by a verified motion in the cause, filed in the original special proceeding—meaning in the SP file in which the individual was declared incompetent. The motion must allege facts tending to show that the ward is competent. Id.)

A ward has a right to be represented by counsel or an appointed GAL in the restoration matter. G.S. 35A-1130(c). The same GAL who previously represented the individual may be reappointed for the restoration proceeding. This is not always possible as the passage of time and the availability of the previous attorney may result in the appointment of a new attorney as the ward’s GAL in the restoration proceeding.

If the clerk or a jury finds by the preponderance of the evidence that the ward is competent, the court enters an order restoring the person’s competency. Once the ward’s competency is restored, they can once again make decisions and manage their affairs as before guardianship, with one exception—the right to purchase firearms. G.S. 35A-1130(d). For information about the firearm exception, and for more on restoration generally, see Restoration to Competency under G.S. 35A-1130: Common Issues and Questions (firearm discussion at 19 n.113), by Meredith Smith.

The Relevance of LRAs in a Restoration Proceeding

The legislative changes reflected in S.L. 2023-124 did not directly amend G.S. Chapter 35A, Article 3, Restoration to Competency. Yet it seems that restoration proceedings will be affected by LRAs and the amended definition of an incompetent adult.

As I referenced earlier, the definition of an incompetent adult now says that someone does not lack the capacity to communicate important decisions or to manage their affairs if they can do so with the assistance of an LRA. Because a restoration depends on proof of a ward’s competency, and because competency may be supported by a sufficient LRA, it seems that LRAs will be relevant to some restoration proceedings. This is consistent with the stated purposes of guardianship. See, e.g., G.S. 35A-1201(a)(2) (someone is only incompetent if they cannot act effectively on their own); G.S. 35A-1201(a)(3) (the “essential purpose of guardianship…is to replace” the decision-making authority of someone who “does not have capacity to make such decisions”).

If a less-restrictive arrangement exists that is practical and accessible to the ward, and that arrangement enables the ward to manage their affairs and communicate important decisions, they do not lack capacity and the guardianship should be dissolved.

What to Expect Regarding LRAs at a Restoration Hearing

The moving party and other participants in favor of restoration should be prepared to offer evidence that demonstrates the ward’s competence, including, potentially, LRAs that enable the ward to communicate decisions and manage their affairs.

Legal devices. Just like at an incompetency hearing, at a restoration hearing there may be documentary or testimonial evidence of LRAs, including legal arrangements. For example, consider a situation where it is discovered that the ward granted rights to a person or agency to act as their agent under a valid power of attorney before they were incompetent, and that the now uncovered power of attorney would give the ward capacity under the amended definition of incompetency. Participants in favor of restoration should offer evidence as to the existence, validity, and sufficiency of the power of attorney or another legal arrangement.

Other arrangements. Not all LRAs need be a legal assignment of rights or designation of authority and the formality (or informality) of the arrangement may dictate the form the evidence takes. For example, “appropriate and available technological assistance” is one possible LRA. G.S. 35A-1101(11a). Examples may include adaptive equipment, like accessible furniture, talking devices, video monitors, medical alert bracelets, or FaceTime-capable communication tools, depending on the ward’s needs and abilities. Evidence about the technology—its availability and functions, the plan for its use, and how it empowers the ward—could be offered as part of a larger showing as to competency.

The statute also gives as an example of an LRA the concept of supported decision making. Id. According to the American Bar Association, supported decision-making “describes the process by which most individuals make decisions – by consulting with friends, family, social services, community organizations, or other sources of support to weigh the pros and cons of a decision, review potential outcomes, and finally make a choice. The practice of supported decision-making takes many forms – from recognition of organic decision-making networks to formal, written supported decision-making agreements.” Less Restrictive Alternatives, Am. Bar Ass’n (November 21, 2023). Those in favor of restoration should be prepared to offer documentation, where appropriate, and testimony as to any supported decision-making arrangements.

Regardless of the nature of the LRA being implemented, the movant should address at the restoration hearing the availability and feasibility of the proposed alternative and the expected effect on the ward’s capacity to communicate decisions and manage their affairs. The movant should offer specific details about the LRA whenever possible.

Wards Executing Agreements While under Guardianship: A Word of Caution

Given that an LRA may affect whether a person is incompetent, a likely question is whether a legal arrangement such as a power of attorney entered into by a ward while under guardianship is valid. This topic is complex enough that it could be the subject of its own publication and is too broad to fully do justice here. I added this note, however, because the issue could arise in the context of a restoration proceeding, and attorneys should proceed thoughtfully and cautiously.

Case law is somewhat limited. The cases we do have are instructive but can be a challenge to reconcile. See, e.g., Medical College of Virginia v. Maynard, 236 N.C. 506, 508-09 (1952) (holding that wards are conclusively presumed to lack capacity to manage their affairs as to parties and privies to the guardianship proceeding, but as to others that presumption is rebuttable with evidence of the ward’s ability to understand and communicate about the agreement and its consequences); Matter of Will of Maynard, 64 N.C. App. 211, 225-27 (1983) (holding that a prior adjudication of incompetency did not create a conclusive presumption that the ward lacked testamentary capacity for a subsequently executed will); O’Neal v. O’Neal, 254 N.C. App. 309, 313-15 (2017) (holding that a power of attorney executed by a ward while under guardianship was void ab initio where the agent was a party to the incompetency proceeding, reasoning that (i) the execution of a power of attorney is different from the ability to marry or to make a will, (ii) the execution of a power of attorney is contractual in nature and relates to a person’s ability to manage their affairs, and (iii) a ward is conclusively presumed to lack the capacity to manage their own affairs and contract with those who were parties or privity to the incompetency proceeding).

It is significant then that at the restoration stage of a proceeding, as opposed to the time before an adjudication of incompetency, the person is known to be incompetent by those who are parties or privies to the guardianship proceeding. A ward’s ability to enter into at least some LRAs prior to entry of a restoration order would seem under the case law to be limited. Where a power of attorney is executed and grants authority to an agent who was a party or privy to the incompetency proceeding, the power of attorney is void ab initio. O’Neal at 313-15. GALs and others should bear this in mind when considering available steps prior to restoration.

Lawyers must be mindful of their ethical responsibilities where client capacity is concerned. See generally, N.C. Rules of Prof’l Conduct R. 1.14 (representing clients with diminished capacity); N.C. Rules of Prof’l Conduct, CPR 314 (where a lawyer believes his or her client is not competent to make a will, that lawyer is prohibited from preparing or overseeing the execution of a will by that client). Before advising on or assisting with alternative arrangements, a lawyer should carefully consider both the individual’s capacity to understand and agree to an arrangement, and their best interests.

Parting Thoughts

Recent legislation pertaining to LRAs and the definition of incompetency have clear implications for newly filed incompetency petitions. While not expressly amended by S.L. 2023-124, restoration proceedings will be affected by those statutory changes. Where appropriate, parties seeking to have a ward’s competency restored should consider and offer evidence of viable alternatives that will enable the ward to communicate important decisions and manage their own affairs once again.

If you have thoughts or questions about the issues raised in this post, I can be reached at Heinle@sog.unc.edu.

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