Action for Guardianship of a Mentally Incapacitated Person, Rule 4:86

Kenneth Vercammen's Office represents persons seeking legal Guardianship of a Parent or Adult Family Member.

Occasionally an individual can not manage his or her life as a result of a mental or physical disability, alcohol or drug addiction. If a legally prepared power of attorney was signed, a trusted family member, friend or professional can legally act on that persons affairs. If a power of attorney was not signed, your attorney must file a formal complaint and other legal pleadings in the Superior Court to permit the trusted family member, friend or professional to be able to handle financial affairs.

Powers of Attorney are generally given by one person to another so that if the grantor of the power becomes ill or incapacitated, the Power of Attorney will permit the holder of it to pay the grantors bills and to handle the grantors affairs during the inability of the grantor to do the same.

A Power of Attorney is an appointment of another person as ones agent. A Power of Attorney creates a principal-agent relationship. The grantor of the Power of Attorney is the principal. The person to whom the Power of Attorney is given is the agent. We give the title "attorney-in-fact" to the agent who is given a Power of Attorney.

Without a legal Power of Attorney or court ordered guardianship, even a spouse does not have the legal authority to sign their spouses signature. If a valid power of attorney is not legally prepared, signed and acknowledged in front of an attorney or notary, it is invalid.

Without a power of attorney, a Guardianship Order and Judgment must be obtained from the Superior Court to permit complete legal decision making.

According to Disability Law, A Legal Primer published by the New Jersey State Bar Association, "A guardian is a person appointed by a court to make financial and personal decisions for a person proven to be legally incompetent." p11

1. When is a guardian needed? A guardian is needed when an individual can not manage his or her life as a result of a mental or physical disability, alcohol or drug addiction. The person for whom a guardian is appointed is called a "ward". Disability Law at p11

Recently the legislation changed the designation of "mental incompetent" to "incapacitated person" in all laws, rules, regulations and documents.

2. What rights does a incompetent lose? Unless a Court orders otherwise, a ward/ incompetent does not have the right to decide where to live, spend money, use property, appear in Court or undergo medical treatment without the approval of his or her guardian. An unmarried incompetent also loses the right to marry.

3. How does somebody become the guardian of another? Guardians are appointed by Courts after the person in need of guardianship is proven incompetent. Guardianship actions can be brought under the general incompetency statute (N.J.S.A. 3B:12-25 et seq.) or under the statute dealing with people who receive services from the State Division of Developmental Disabilities. N.J.S.A.. 30:4-165.4 et seq. Guardians who are married to the incompetent or are parents of an unmarried incompetent can choose who will become the guardian after the guardians die and include a clause designating their successor in their wills. Disability Laws p12 Under the general incompetency statute, a Complaint requesting Guardianship must be filed in the Superior Court, plus a detailed Affidavit by the person requesting to be Guardian detailing the assets of the incompetent plus reasons why the incompetent is no longer able to manage their affairs. Affidavits of two doctors are also needed. The Court will appoint a temporary attorney to interview the incompetent and prepare a report to the Court.

4. Who can be a guardian? Generally, a close relative or a person with a close relationship to the proposed incompetent who will act to protect the incompetents best interests can be guardian. when a close friend or relative is not available, the Court may appoint the Public Guardian (for persons over 60) or an Attorney to serve as guardian.

5. What are the rights of the proposed incompetent prior to hearing? The proposed incompetent is entitled to receive advance notice of the guardianship hearing, to be represented by a lawyer and to present a defense at the hearing.

6. What happens if the incompetent regain the ability to manage his or her affairs? The incompetent came then go back to Court and ask to be made his or her own guardian again, but first must show that he or she has regained "sound reason".

7. When is a guardian not needed? Just because a person has a disability, does not mean that they need a guardian. A guardian is not needed if a person can make, and understands the nature of the decisions, and communicate the decisions to others. A guardian is not required for someone who has a physical disability, but who can manage his or her affairs, and is not needed if a person merely has a problem managing money or property. Disability Law p12

4:86-1. Complaint

Every action for the determination of mental incapacity of a person and for the appointment of a guardian of that person or of the persons estate or both, other than an action with respect to a veteran under N.J.S.A. 3B:13-1 et seq., shall be brought pursuant to R. 4:86-1 through R. 4:86-8. The complaint shall state the name, age, domicile and address of the plaintiff, of the alleged mentally incapacitated person and of the alleged mentally incapacitated persons spouse, if any; the plaintiffs relationship to the alleged mentally incapacitated person; the plaintiffs interest in the action; the names, addresses and ages of the alleged mentally incapacitated persons children, if any, and the names and addresses of the alleged mentally incapacitated persons parents and nearest of kin; the name and address of the person or institution having the care and custody of the alleged mentally incapacitated person; and if the alleged mentally incapacitated person has lived in an institution, the period or periods of time the alleged mentally incapacitated person has lived therein, the date of the commitment or confinement, and by what authority committed or confined. The complaint also shall state the name and address of any person named as attorney-in-fact in any power of attorney executed by the alleged mentally incapacitated person, any person named as health care representative in any health care directive executed by the alleged mentally incapacitated person, and any person acting as trustee under a trust for the benefit of the alleged mentally incapacitated person. Note: Source-R.R. 4:102-1. Amended July 22, 1983 to be effective September 12, 1983; former R. 4:83-1 amended and rule redesignated June 29, 1990 to be effective September 4, 1990; R. 4:86 caption amended, and text of R. 4:86-1 amended July 12, 2002 to be effective September 3, 2002. 4:86-2. Accompanying Affidavits

The allegations of the complaint shall be verified as prescribed by R. 1:4-7 and shall have annexed thereto: (a) An affidavit stating the nature, location and fair market value (1) of all real estate in which the alleged mentally incapacitated person has or may have a present or future interest, stating the interest, describing the real estate fully or by metes and bounds, and stating the assessed valuation thereof; and (2) of all the personal estate which he or she is, will or may in all probability become entitled to, including the nature and total or annual amount of any compensation, pension, insurance, or income which may be payable to the alleged mentally incapacitated person. If the plaintiff cannot secure such information, the complaint shall so state and give the reasons therefor, and the affidavit submitted shall in that case contain as much information as can be secured in the exercise of reasonable diligence; (b) Affidavits of two reputable physicians, having qualifications set forth in N.J.S.A. 30:4-27.2t. If an alleged mentally incapacitated person has been committed to a public institution and is confined therein, one of the affidavits shall be that of the chief executive officer, the medical director, or the chief of service providing that person is also the physician with overall responsibility for the professional program of care and treatment in the administrative unit of the institution. However, where an alleged mentally incapacitated person is domiciled within this State but resident elsewhere, the affidavits may be those of physicians who are residents of the state or jurisdiction of the alleged mentally incapacitated persons residence. Each affiant shall have made a personal examination of the alleged mentally incapacitated person not more than 30 days prior to the filing of the complaint, but said time period may be relaxed by the court on an ex parte showing of good cause. To support the complaint, each affiant shall state: (1) the date and place of the examination; (2) whether the physician is a treating or examining physician; (3) whether the physician is disqualified under R. 4:86-3; (4) the diagnosis and prognosis and factual basis therefor; (5) for purposes of ensuring that the alleged mentally incapacitated person is the same individual who was examined, a physical description of the person examined, including but not limited to sex, age and weight; and (6) the affiants opinion that the alleged mentally incapacitated person is unfit and unable to govern himself or herself and to manage his or her affairs and shall set forth with particularity the circumstances and conduct of the alleged mentally incapacitated person upon which this opinion is based, including a history of the alleged mentally incapacitated persons condition. The affidavit should also include an opinion whether the alleged mentally incapacitated person is capable of attending the hearing and if not, the reasons for the individuals inability. (c) In lieu of the affidavits provided for in paragraph (b), an affidavit of one reputable physician having the qualifications as required by paragraph (b), stating that he or she has endeavored to make a personal examination of the alleged mentally incapacitated person not more than 30 days prior to the filing of the complaint but that the alleged mentally incapacitated person or those in charge of him or her have refused or are unwilling to have the affiant make such an examination. The time period herein prescribed may be relaxed by the court on an ex parte showing of good cause. Note: Source-R.R. 4:102-2; former R. 4:83-2 amended and rule redesignated June 29, 1990 to be effective September 4, 1990; paragraphs (b) and (c) amended July 14, 1992 to be effective September 1, 1992; paragraph (b) amended July 13, 1994 to be effective September 1, 1994; paragraphs (a), (b), and (c) amended July 12, 2002 to be effective September 3, 2002. 4:86-3. Disqualification of Physician

No affidavit shall be submitted by a physician who is related, either through blood or marriage, to the alleged mentally incapacitated person or to a proprietor, director or chief executive officer of any institution (except state, county or federal institutions) for the care and treatment of the mentally ill in which the alleged mentally incapacitated person is living, or in which it is proposed to place him or her, or who is professionally employed by the management thereof as a resident physician, or who is financially interested therein. Note: Source-R.R. 4:102-3; former R. 4:83-3 amended and rule redesignated June 29, 1990 to be effective September 4, 1990; amended July 12, 2002 to be effective September 3, 2002. 4:86-4. Order for Hearing (a) Contents of Order. If the court is satisfied with the sufficiency of the complaint and supporting affidavits and that further proceedings should be taken thereon, it shall enter an order fixing a date for hearing and requiring that at least 20 days notice thereof be given to the alleged mentally incapacitated person, any person named as attorney-in-fact in any power of attorney executed by the alleged mentally incapacitated person, any person named as health care representative in any health care directive executed by the alleged mentally incapacitated person, and any person acting as trustee under a trust for the benefit of the alleged mentally incapacitated person, the alleged mentally incapacitated persons spouse, children 18 years of age or over, parents, the person having custody of the alleged mentally incapacitated person, the attorney appointed pursuant to R. 4:86-4(b), and such other persons as the court directs. Notice shall be effected by service of a copy of the order, complaint and supporting affidavits upon the alleged mentally incapacitated person personally and upon each of the other persons in such manner as the court directs. The court, in the order, may, for good cause, allow shorter notice or dispense with notice, but in such case the order shall recite the ground therefor, and proof shall be submitted at the hearing that the ground for such dispensation continues to exist. A separate notice shall, in addition, be personally served on the alleged mentally incapacitated person stating that if he or she desires to oppose the action he or she may appear either in person or by attorney and may demand a trial by jury. (b) Appointment and Duties of Counsel. The order shall include the appointment by the court of counsel for the alleged mentally incapacitated person. Counsel shall 1) personally interview the alleged mentally incapacitated person; 2) make inquiry of persons having knowledge of the alleged mentally incapacitated persons circumstances, his or her physical and mental state and his or her property; 3) make reasonable inquiry to locate any will, powers of attorney, or health care directives previously executed by the alleged mentally incapacitated person or to discover any interests the alleged mentally incapacitated person may have as beneficiary of a will or trust. At least three days prior to the hearing date counsel shall file a report with the court and serve a copy thereof on plaintiffs attorney and other parties who have formally appeared in the matter. The report shall contain the information developed by counsels inquiry; shall make recommendations concerning the courts determination on the issue of mental incapacity; may make recommendations concerning the suitability of less restrictive alternatives such as a conservatorship or a delineation of those areas of decision-making that the alleged mentally incapacitated person may be capable of exercising; and whether a case plan for the mentally incapacitated person should thereafter be submitted to the court. The report shall further state whether the alleged mentally incapacitated person has expressed dispositional preferences and, if so, counsel shall argue for their inclusion in the judgment of the court. The report shall also make recommendations concerning whether good cause exists for the court to order that any power of attorney, health care directive, or revocable trust created by the alleged mentally incapacitated person be revoked or the authority of the person or persons acting thereunder be modified or restricted. If the alleged mentally incapacitated person obtains other counsel, such counsel shall notify the court and appointed counsel at least five days prior to the hearing date. (c) Examination. If the affidavit supporting the complaint is made pursuant to R. 4:86-2(c), the court may, on motion and upon notice to all persons entitled to notice of the hearing under paragraph (a), order the alleged mentally incapacitated person to submit to an examination. The motion shall set forth the names and addresses of the physicians who will conduct the examination, and the order shall specify the time, place and conditions of the examination. Upon request, the report thereof shall be furnished to either the examined party or his or her attorney. (d) Guardian Ad Litem. At any time prior to entry of judgment, where special circumstances come to the attention of the court by formal motion or otherwise, a guardian ad litem may, in addition to counsel, be appointed to evaluate the best interests of the alleged mentally incapacitated person and to present that evaluation to the court. (e) Compensation. The compensation of the appointed counsel and of the guardian ad litem, if any, may be fixed by the court to be paid out of the estate of the alleged mentally incapacitated person or in such other manner as the court shall direct. Note: Source-R.R. 4:102-4(a)(b). Paragraph (b) amended July 16, 1979 to be effective September 10, 1979; paragraph (a) amended July 21, 1980 to be effective September 8, 1980; paragraph (a) amended July 16, 1981 to be effective September 14, 1981; caption of former R. 4:83-4 amended, caption and text of paragraph (a) amended and in part redesignated as paragraph (b) and former paragraph (b) redesignated as paragraph (c) and amended, and rule redesignated June 29, 1990 to be effective September 4, 1990; paragraph (b) amended July 13, 1994 to be effective September 1, 1994; paragraph (b) amended and paragraphs (d) and (e) added June 28, 1996 to be effective September 1, 1996; paragraphs (a), (b), (c), (d), and (e) amended July 12, 2002 to be effective September 3, 2002. 4:86-5. Proof of Service; Appearance of Mentally Incapacitated Person at Hearing; Answer

Prior to the hearing, the plaintiff shall file proof of service of the notice, order for hearing, complaint and affidavits and proof by affidavit that the alleged mentally incapacitated person has been afforded the opportunity to appear personally or by attorney, and that he or she has been given or offered assistance to communicate with friends, relatives, or attorneys. The plaintiff or appointed counsel may produce the alleged mentally incapacitated person at the hearing or the court may direct the plaintiff to do so, unless the court finds that it would be prejudicial to the health of the alleged mentally incapacitated person or unsafe for the alleged mentally incapacitated person or others to do so. If the alleged mentally incapacitated person or any person receiving notice of the hearing intends to appear by an attorney, such person shall, not later than five days before the hearing, serve and file an answer to the complaint. Note: Source-R.R. 4:102-5; caption and text of former R. 4:83-5 amended and rule redesignated June 29, 1990 to be effective September 4, 1990; caption and text amended July 12, 2002 to be effective September 3, 2002. 4:86-6. Hearing; Judgment

(a) Trial. Unless a trial by jury is demanded by or on behalf of the alleged mentally incapacitated person, or is ordered by the court, the court without a jury shall, after taking testimony in open court, determine the issue of mental incapacity. If there is no jury, the court, with the consent of counsel for the alleged mentally incapacitated person, may take the testimony of a physician by telephone or may dispense with the physicians oral testimony and rely on the affidavits submitted pursuant to R. 4:86-2(b). Telephone testimony shall be recorded verbatim. (b) Motion for New Trial. A motion for a new trial shall be served not later than 30 days after the entry of the judgment. (c) Appointment of Guardian. If a guardian of the person or of the estate or of both the person and the estate is to be appointed, the court shall appoint and letters shall be granted to the mentally incapacitated persons spouse, if the spouse was living with the mentally incapacitated person as husband or wife at the time the mental incapacity arose, or to the mentally incapacitated persons next of kin; or if none of them will accept the appointment or if the court is satisfied that no appointment from among them will be in the best interests of the mentally incapacitated person, then the court shall appoint and letters shall be granted to such other person who will accept appointment as the court determines is in the best interests of the mentally incapacitated person. Before letters of guardianship shall issue, the guardian shall accept the appointment in accordance with R. 4:96-1. The judgment appointing the guardian shall fix the amount of the bond, unless dispensed with by the court. The order of appointment shall require the guardian of the estate to file with the court within 90 days of appointment an inventory specifying all property and income of the mentally incapacitated persons estate, unless the court dispenses with this requirement. Within this time period, the guardian of the estate shall also serve copies of the inventory on all next of kin and such other interested parties as the court may direct. The order shall also require the guardian to keep the Surrogate continuously advised of the whereabouts and telephone number of the guardian and of the mentally incapacitated person and to advise the Surrogate within 30 days of the mentally incapacitated persons death or of any major change in his or her status or health. Note: Source-R.R. 4:102-6(a)(b)(c), 4:103-3 (second sentence). Paragraph (a) amended July 26, 1984 to be effective September 10, 1984; paragraph (a) amended November 5, 1986 to be effective January 1, 1987; paragraphs (a) and (c) of former R. 4:83-6 amended and rule redesignated June 29, 1990 to be effective September 4, 1990; paragraph (c) amended July 13, 1994 to be effective September 1, 1994; paragraphs (a) and (c) amended July 12, 2002 to be effective September 3, 2002. 4:86-7. Regaining Mental Capacity

Upon the commencement of a separate action or upon the filing of a motion in the original cause by the mentally incapacitated person or an interested person on his or her behalf, supported by affidavit and setting forth facts evidencing that the previously mentally incapacitated person no longer is mentally incapacitated, the court shall, on notice to the persons who would be set forth in a complaint filed pursuant to R. 4:86-1, set a date for hearing, take oral testimony in open court with or without a jury, and may render judgment that the person no longer is mentally incapacitated, that his or her guardian be discharged subject to the duty to account, and that his or her person and estate be restored to his or her control. Note: Source-R.R. 4:102-7; former R. 4:83-7 amended and rule redesignated June 29, 1990 to be effective September 4, 1990; caption and text amended July 12, 2002 to be effective September 3, 2002. 4:86-8. Appointment of Guardian for Nonresident Mentally Incapacitated Person

An action for the appointment of a guardian for a nonresident who has been or shall be found to be a mentally incapacitated person under the laws of the state or jurisdiction in which the mentally incapacitated person resides shall be brought in the Superior Court pursuant to R. 4:67. The plaintiff shall exhibit and file with the court an exemplified copy of the proceedings or other evidence establishing the finding. If the plaintiff is the duly appointed guardian, trustee or committee of the mentally incapacitated person in the state or jurisdiction in which the finding was made, and applies to be appointed guardian in this State, the court may forthwith appoint that person without issuing an order to show cause. Note: Source-R.R. 4:102-8. Amended July 26, 1984 to be effective September 10, 1984; former R. 4:83-8 amended and rule redesignated June 29, 1990 to be effective September 4, 1990; caption and text amended July 12, 2002 to be effective September 3, 2002. 4:86-9. Guardians for Mentally Incapacitated Persons Under Uniform Veterans Guardianship Law

(a) Complaint for Appointment. An action for the appointment of a guardian under N.J.S.A. 3B:13-1 et seq. for a ward alleged to be a mentally incapacitated person shall be brought in the Superior Court by any person entitled to priority of appointment. If there is no person so entitled or if the person so entitled fails or refuses to commence the action within 30 days after the mailing of notice by a federal agency to the last known address of such person entitled to priority of appointment, indicating the necessity for the appointment, the action may be brought by any person residing in this State, acting on the wards behalf. (b) Complaint. The complaint shall state (1) the name, age and place of residence of the ward; (2) the name and place of residence of the nearest relative, if known; (3) the name and address of the person or institution, if any, having custody of the ward; (4) that such ward is entitled to receive money payable by or through a federal agency; (5) the amount of money due and the amount of probable future payments; and (6) that the ward has been rated a mentally incapacitated person on examination by a federal agency in accordance with the laws regulating the same. (c) Proof of Necessity for Guardian of Mentally Incapacitated Person. A certificate by the chief officer, or his or her representative, stating the fact that the ward has been rated a mentally incapacitated person by a federal agency on examination in accordance with the laws and regulations governing such agency and that appointment is a condition precedent to the payment of money due the ward by such agency shall be prima facie evidence of the necessity for making an appointment under this rule. (d) Determination of Mental Incapacity. Mental incapacity may be determined on the certificates, without other evidence, of two medical officers of the military service or of a federal agency, certifying that by reason of mental incapacity the ward is incapable of managing his or her property, or certifying to such other facts as shall satisfy the court as to such mental incapacity. (e) Appointment of Guardian; Bond. Upon proof of notice duly given and a determination of mental incapacity, the court may appoint a proper person to be the guardian and fix the amount of the bond. The bond shall be in an amount not less than that which will be due or become payable to the ward in the ensuing year. The court may from time to time require additional security. Before letters of guardianship shall issue, the guardian shall accept the appointment in accordance with R. 4:96-1. (f) Termination of Guardianship When Ward Regains Mental Capacity. If the court has appointed a guardian for the estate of a ward, it may subsequently, on due notice, declare the ward to have regained mental capacity on proof of a finding and determination to that effect by the medical authorities of the military service or federal agency or based on such other facts as shall satisfy the court as to the mental capacity of the ward. The court may thereupon discharge the guardian without further proceedings subject to the settlement of his or her account. (g) Complaint in Action to Have Guardian Receive Additional Personalty. The complaint in an action to authorize the guardian, pursuant to law, to receive personal property from any source other than the United States Government shall set forth the amount of such property and the name and address of the person or institution having actual custody of the ward. (h) Definitions. Definitions contained in N.J.S.A. 3B:13-2 shall apply to the terms of this rule. Note: Source-R.R. 4:102-9(a) (b) (c) (d) (e) (f) (g) (h), 4:103-3 (second sentence). Paragraph (a) amended July 22, 1983 to be effective September 12, 1983; paragraph (a) amended July 26, 1984 to be effective September 10, 1984; paragraphs (a) through (f) and (h) of former R. 4:83-9 amended and rule redesignated June 29, 1990 to be effective September 4, 1990; caption amended, paragraphs (a) and (b) amended, paragraphs (c) and (d) captions and text amended, paragraph (e) amended, and paragraph (f) caption and text amended July 12, 2002 to be effective September 3, 2002. 4:86-10. Appointment of Guardian for Persons Receiving Services From the Division of Developmental Disabilities

An action pursuant to N.J.S.A. 30:4-165.7 et seq. for the appointment of a guardian for a person over the age of 18 who is receiving services from the Division of Developmental Disabilities shall be brought pursuant to these rules insofar as applicable, except that: (a) The complaint may be brought by the Commissioner of Human Services or a parent, spouse, relative or other party interested in the welfare of such person. (b) In lieu of the affidavits prescribed by R. 4:86-2 the verified complaint shall have annexed thereto two affidavits. One affidavit shall be submitted by the chief executive officer, medical director, or other officer having administrative control over a Division of Developmental Disabilities program servicing the alleged mentally incapacitated person and the other shall be submitted by a physician licensed to practice in New Jersey or a psychologist licensed pursuant to N.J.S.A. 45:14B-1 et seq. The affidavit shall set forth with particularity the alleged mentally incapacitated persons significant chronic functional impairment, as that item is defined in N.J.S.A. 30:4-165.8, and the facts supporting the affiants belief that as a result thereof, the person lacks the cognitive capacity either to make decisions or to communicate decisions to others. (c) If the petition seeks guardianship of the person only, the Office of the Public Defender, if available, shall be appointed as attorney for the alleged mentally incapacitated person, as required by R. 4:86-4. If the Office of the Public Defender is unavailable or if the petition seeks guardianship of the person and the estate, the court shall appoint an attorney other than the Public Advocate to represent the alleged mentally incapacitated person. The attorney for the alleged mentally incapacitated person may where appropriate retain an independent expert to render an opinion respecting the mental incapacity of the alleged mentally incapacitated person. (d) The hearing shall be held pursuant to R. 4:86-6 except that a guardian may be summarily appointed if the attorney for the alleged mentally incapacitated person, by affidavit, does not dispute either the need for the guardianship or the fitness of the proposed guardian and if a plenary hearing is not requested either by the alleged mentally incapacitated person or on his or her behalf. Note: Adopted July 7, 1971 to be effective September 13, 1971; amended July 24, 1978 to be effective September 11, 1978. Former rule deleted and new rule adopted November 5, 1986 to be effective January 1, 1987; caption amended and paragraphs (b), (c) and (d) of former R. 4:83-10 amended and rule redesignated June 29, 1990 to be effective September 4, 1990; paragraphs (b) and (c) amended July 14, 1992 to be effective September 1, 1992; paragraph (c) amended June 28, 1996 to be effective September 1, 1996; paragraphs (b), (c), and (d) amended July 12, 2002 to be effective September 3, 2002. 4:86-11. Appointment of Conservator

(a) Commencement of Action; Complaint. An action pursuant to N.J.S.A. 3B: 13A-1 et seq. for the appointment of a conservator shall be brought by a conservatee or other person on his or her behalf on notice, as provided by N.J.S.A. 3B: 13A-5 and 6. The complaint shall be filed in the Superior Court and shall state (1) the conservatees age and residence, (2) the names and addresses of the conservatees heirs and all other persons entitled to notice pursuant to N.J.S.A. 3B: 13A-6, and (3) the nature, location and fair market value of all property, real and personal, in accordance with R. 4:86-2(a). (b) Hearing. The court, without a jury, shall take testimony in open court to determine whether the conservatee, by reason of advanced age, illness or physical infirmity, is unable to care for or manage his or her property or has become unable to provide for himself or herself or others dependent upon him or her for support. The court may appoint counsel for the conservatee if it concludes that counsel is necessary to protect his or her interests. If the conservatee is unable to attend the hearing by reason of physical or other disability, the court shall appoint a guardian ad litem to conduct an investigation to determine whether the conservatee objects to the conservatorship. If counsel for the conservatee has, however, been appointed, such counsel shall conduct the investigation and no separate guardian ad litem shall be appointed. In no case shall a conservator be appointed if the court finds that the conservatee objects thereto. (c) Acceptance of Appointment. An acceptance of appointment as conservator may be taken before any person authorized by the laws of this State to administer an oath. (d) Settlement of Conservators Account. Where the court, for good cause shown, orders a full accounting by the conservator, the account shall be settled in the Superior Court in accordance with R. 4:87, insofar as applicable. Note: Adopted July 26, 1984 to be effective September 10, 1984; paragraphs (a), (b) and (c) of former R. 4:83-11 amended and rule redesignated June 29, 1990 to be effective September 4, 1990. 4:86-12. Special Medical Guardian

(a) Standards. On the application of a hospital, nursing home, treating physician, relative or other appropriate person under the circumstances, the court may appoint a special guardian of the person of a patient to act for the patient respecting medical treatment consistent with the courts order, if it finds that: (1) the patient is mentally incapacitated, unconscious, underage or otherwise unable to consent to medical treatment; (2) no general or natural guardian is immediately available who will consent to the rendering of medical treatment; (3) the prompt rendering of medical treatment is necessary in order to deal with a substantial threat to the patients life or health; and (4) the patient has not designated a health care representative or executed a health care instruction directive pursuant to the New Jersey Advance Directives for Health Care Act, N.J.S.A. 26:2H-53 to -78, determining the treatment question in issue. (b) Venue. The application shall be made to the Superior Court judge assigned to general equity in the vicinage in which the patient is physically located when the application is made and, in the event of that judges unavailability, to the Assignment Judge of the vicinage or the judge designated as the emergent judge, or if neither is available, any judge in the vicinage. (c) Procedure. The procedure on the application shall conform as nearly as practicable to the requirements of R. 4:86-1 to R. 4:86-6, but the judge may, if the circumstances require, accept an oral complaint and oral testimony either by telephone, in court, or at any other suitable location. If the circumstances do not permit the making of a verbatim record, the judge shall make detailed notes of the allegations of the complaint and the supporting testimony. Whenever possible an attorney shall be appointed to represent the patient. (d) Order. The order granting the application, if orally rendered, shall be reduced to writing as promptly as possible and shall recite the findings on which it is based. Note: Adopted November 1, 1985 to be effective January 2, 1986; paragraphs (a), (b) and (c) of former R. 4:83-12 amended and rule redesignated June 29, 1990 to be effective September 4, 1990; paragraph (a) amended July 14, 1992 to be effective September 1, 1992; paragraph (a)(1) amended July 12, 2002 to be effective September 3, 2002.

Fair hearing after medicaid denial must be filed within 20 days Reuter v BURLINGTON COUNTY BOARD OF SOCIAL SERVICES

Fair hearing after medicaid denial must be filed within 20 days Reuter v BURLINGTON COUNTY BOARD OF

SOCIAL SERVICES

GRETA REUTER,

Appellant,

v.

BURLINGTON COUNTY BOARD OF

SOCIAL SERVICES and DIVISION OF

MEDICAL ASSISTANCE AND HEALTH

SERVICES,

Respondents. NOT FOR PUBLICATION WITHOUT THE APPROVAL

OF THE COMMITTEE ON OPINIONS

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0514-13T2

________________________________________________________________

October 17, 2014

Argued October 6, 2014 – Decided

Before Judges Sabatino and Guadagno.

On appeal from the Division of Medical Assistance and Health Services, Fair Hearing Unit.

Carleen M. Steward argued the cause for appellant (Fruhschein & Steward, LLC, attorneys; Ms. Steward, on the brief).

Stephen Slocum, Deputy Attorney General, argued the cause for respondents (John J. Hoffman, Acting Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Mr. Slocum, on the brief).

PER CURIAM

Appellant Greta Reuter appeals from a final agency decision of the Division of Medical Assistance and Health Services ("DMAHS" or "the Division") rejecting her request for a fair hearing to challenge the Division's adverse determination regarding her eligibility for Medicaid benefits. The Division denied appellant a fair hearing because her request had not been filed within twenty days of the date of the notice of the Medicaid determination, as prescribed by N.J.A.C. 10:40-10.3(a), unless that deadline is extended due to "extraordinary and extenuating circumstances." N.J.A.C. 10:69-6.8(b). For the reasons that follow, we reverse and remand for further proceedings.

The limited record before us shows that appellant resides in a nursing home. With the apparent assistance of family members, appellant applied for benefits under what is known as the Medically Needy Program. The program is administered statewide by the DMHAS and locally in Burlington County by the Burlington County Board of Social Services ("BCBSS"). Appellant at some point retained counsel to assist her in securing these benefits.

As memorialized in correspondence to appellant on BCBSS letterhead bearing the typewritten date of March 28, 2013, the agency decided to approve certain benefits retroactively for her for the period of June 1, 2012 through September 30, 2012 and also for the separate month of May 2012. However, the agency declined to provide appellant with additional benefits because she allegedly had not provided certain information it had requested concerning her inheritance from the estate of her late husband. The letter included standard language notifying its intended recipient that she had twenty days to request a fair hearing to challenge the decision.

Notably, the record is bereft of any proof that the March 28, 2013 letter was actually mailed from the BCBSS and that it was actually received by appellant at her nursing home address as shown on the letter. The letter was not send by certified mail, nor did the agency have the letter tracked by the United States Postal Service ("USPS"). According to the Deputy Attorney General who argued the appeal, the Division and the county agencies that administer the Medicaid program normally do not transmit such notices by certified mail or use USPS tracking, because of the high volume of such correspondence and the attendant costs involved. The Division maintains that, at the very least, appellant received constructive notice of the March 28, 2013 disposition because of alleged awareness of it by the nursing home facility where she resides.

Appellant contends that she did not receive the March 28, 2013 letter in the mail. She asserts that she did not learn of the letter and its contents, including the notice for seeking a fair hearing, until much later on July 25, 2013 when the letter was faxed to her counsel by the agency at his request. According to appellant, her attorney initiated contact with the agency because he and appellant had not heard anything from the agency for some time.

On August 2, 2013, eight days after her attorney received a faxed copy of the agency's letter, he faxed and also sent by certified mail a letter to the Division's fair hearing unit requesting such a hearing. In that letter, counsel represented that his office had not been notified before July 25, 2013 of the agency's termination of future benefits. He further represented that the nursing home likewise had no record of receiving the March 28, 2013 correspondence at the time when it was supposedly issued.

On August 15, 2013, the Division denied appellant's request for a fair hearing, taking the position that the request was untimely, having been made 127 days after the date of the March 28 letter from BCBSS. The Division did not extend the deadline or address under N.J.A.C. 10:69-6.8(b) whether extraordinary and extenuating circumstances were present to justify such an extension. The Division further noted that the nursing home must have been aware of the March 28, 2013 disposition because it received on appellant's behalf payments for the months for which her eligibility was approved, and it had not been paid on bills it submitted thereafter.

Appellant contends that the Division's denial of her fair hearing request, and its refusal to extend the twenty-day deadline in these circumstances, is arbitrary and capricious. In particular, she continues to deny that she ever received the March 28, 2013 letter from the BCBSS. She also emphasizes that the agency has tendered no proof of service substantiating that the March 28, 2013 letter was actually mailed out to her and that she received it. In response, the Division maintains that it did not act arbitrarily or capriciously by enforcing its twenty-day deadline. The Division's brief also cites case law supporting the general principle that mailed service in our legal system is ordinarily presumed to be valid and effective upon mailing.

In reviewing the parties' contentions, we accord substantial deference to the Division as a state administrative agency acting within its sphere of delegated functions. See In re Anthony Stallworth, 208 N.J. 182, 194 (2011). Except where the agency has violated constitutional rights or the terms of a statute, courts generally do not overturn the agency's decision unless it is shown to be "'arbitrary, capricious, or unreasonable, or [] not supported by substantial credible evidence in the record as a whole.'" Stallworth, supra, 208 N.J. at 194 (quoting Henry v. Rahway State Prison, 81 N.J. 571, 580 (1980)) (alteration in original); see also W.T. v. Div. of Med. Assistance & Health Servs., 391 N.J. Super. 25, 36 (App. Div. 2007). In that same vein, we accord substantial deference to an "'agency's interpretation of statutes and regulations within its implementing and enforcing responsibility[.]'" E.S. v. Div. of Med. Assistance & Health Servs., 412 N.J. Super. 340, 355 (App. Div. 2010) (quotingWnuck v. N.J. Div. of Motor Vehicles, 337 N.J. Super. 52, 56 (App. Div. 2001)). However, we do not give deference to an agency's legal determinations. A.B. v. Div. of Med. Assistance & Health Servs., 407 N.J. Super. 330, 340 (App. Div.) (quotingLevine v. State Dep't of Transp., 338 N.J. Super. 28, 32 (App. Div. 2001)), certif. denied, 200 N.J. 210 (2009). Instead, the judicial construction of statutes and regulations entails legal issues that are reviewed on appeal de novo. Ibid.

Applying these principles to the service and notice issues presented here, we conclude that this is an exceptional instance in which the agency has misapplied its authority. The agency acted arbitrarily and capriciously by summarily rejecting appellant's contention that she did not receive the March 28, 2013 letter from the BCBSS, despite the absence of any documented proof of service that would gainsay her assertion.

The Division's reliance on First Resolution Investment Corp. v. Seker, 171 N.J. 502 (2002), and similar cases involving mailed service of court documents, is of little benefit to its position. In First Resolution, the plaintiff sent, by certified and regular mail, a notice of application for wage execution to the defendant. Id. at 505. The letter sent by certified mail was returned and marked "unclaimed" and the one sent by regular mail was not returned. Ibid. The plaintiff submitted a certification of service to the trial court, explaining how the letters had been sent and that the certified mail was returned "unclaimed." Ibid.

The Supreme Court in First Resolution discussed the required procedure for enforcing monetary judgments through wage executions. Id. at 508. In doing so, the Court referred to Rule 1:5-4, which prescribes that service by mail is deemed complete upon the mailing of ordinary mail, but only if that is done simultaneously with a mailing by certified or registered mail, or on the recipient's acceptance if mailed only by certified or registered mail. Ibid.; R. 1:5-4(b). If the recipient does not claim or refuses to accept the certified or registered mail, it is complete on the mailing of the simultaneous ordinary mail. Id. at 508; R. 1:5-4(b).

This present circumstances are distinguishable from First Resolution. InFirst Resolution, there was evidence that the letters were actually mailed, namely the plaintiff's proof of service. In this case, no such proof of service by the agency has been provided. The record simply contains a dated and addressed letter. There is no proof of mailing, return receipt, tracking number, or certification from anyone at BCBSS or DMAHS substantiating that the March 28 letter was actually mailed and that it was actually received by appellant. It is entirely conceivable that the letter never made it out of the agency's mail room, or that the envelope was misaddressed and the letter discarded by a wrong recipient. Moreover, the denial by the nursing home that the letter was ever received further undermines the Division's claim of proper service.

The agency's arguments concerning the propriety of service are undermined by the Supreme Court's analysis in SSI Medical Services v. HHS, Div. of Medical Assistance & Health Services, 146 N.J. 614 (1996). In that case, the plaintiff was a qualified provider that was denied reimbursement by the DMAHS on some of its claims. The plaintiff asserted that it had mailed the reimbursement forms and submitted photocopies of the claims, along with "employee affidavits attesting to [the plaintiff's] standard procedure for mailing Medicaid claims." Id. at 618. In response, the Division provided a computer printout of received claims, which demonstrated that there was no record of the agency timely receiving the claims from the plaintiff. Ibid.

The Supreme Court in SSI Medical Services focused on whether the plaintiff could rely on a legal presumption of proper mailing. Id. at 621. The Court acknowledged that published cases in our state "have recognized a presumption that mail properly addressed, stamped, and posted was received by the party to whom it was addressed." Ibid. In order to invoke this presumption, however, the party relying on it must show: "(1) that the mailing was correctly addressed; (2) that proper postage was affixed; (3) that the return address was correct; and (4) that the mailing was deposited in a proper mail receptacle or at the post office." Ibid. (citingLamantia v. Howell Twp., 12 N.J. Tax 347, 352 (Tax 1992)). The Court held that these elements must be proved by a preponderance of the evidence. Id. at 622.

The Court acknowledged in SSI Medical Services that evidence of office custom can aid a party in establishing the presumption of mailing, but that it is insufficient by itself to trigger the presumption, and requires "other corroboration that the custom was followed in a particular instance, in order to . . . meet the preponderance of the evidence standard." Id. at 622-23 (citing Cwiklinski v. Burton,217 N.J. Super. 506, 510 (App. Div. 1987)). Applying these principles to the record before it, the Court ruled that since detailed testimony and affidavits had been provided outlining the mailing procedures of the plaintiff, and photocopies of the missing claim forms were produced, the preponderance of the evidence supported a finding that the plaintiff had mailed the claims, and thus raised a presumption of receipt. Id. at 623-24.

The Court further noted in SSI Medical Services that, in general, a party's reliance on "evidence of business custom or practice also requires proof that the custom or practice was actually followed on the specific occasion in order to establish the fact of mailing." Cwiklinski, supra, 217 N.J. Super. at 511. The Court did recognize that in contexts involving large business organizations with complex business operations and voluminous items being mailed daily, "it may not be possible for individuals engaged in mailing activities to recall actual mailing of a document or whether the custom or practice of mailing was followed on a given day." Ibid. In such high-volume contexts, "other corroborating proof creating the reasonable inference that the custom was followed on the given occasion may suffice to establish proof of mailing." Ibid.; cf. Calabrese v. Selective Ins. Co. of Am., 297 N.J. Super. 423, 436-37 (App. Div. 1997), overruled on other grounds Magnifico v. Rutgers Cas. Ins. Co., 153 N.J. 406, 416 (1998) (finding no presumption of mailing where a single affidavit was provided that was general and unclear and not offered by a person at the company who had personal knowledge of its mailing policies). Further, "[t]he presumption of receipt derived from proof of mailing is rebuttable and may be overcome by evidence that the notice was never in fact received." SSI Med. Servs., supra, 146 N.J. at 625 (internal quotation marks and citations omitted).

Here, the Division and the BCBSS have furnished no such corroborating proof of the BCBSS's mailing customs, either in the appellate appendices or the statement of items comprising the record filed pursuant to Rule 2:5-4(b). The omission of such proof of custom further weakens the agency's position.

We also offer the following pragmatic observation. Given the totality of circumstances here, it would strain common sense for appellant, her family members, and her attorney to have disregarded the letter when it supposedly arrived and have waited 127 days to pursue a fair hearing. Appellant had submitted an application for important financial benefits relating to her ongoing care at a nursing home. That application was reasonably believed to be pending until her attorney took the initiative to contact the agency and ascertain the status of the matter in July 2013. Once informed of that status, the attorney responded within eight days with a fair hearing request. Although that action was not immediate it also did not consume an unreasonable amount of time. The course of events that transpired is consistent with the credibility of appellant's assertion that she never got the letter in March 2013 or within the twenty-day period of its issuance.

We also reject the Division's argument that the nursing home's alleged notification of the termination of appellant's benefits sufficiently placed appellant personally on notice of the agency's action. The notice issues here implicate the constitutional due process interests of appellant individually. As the party affected personally by a government agency's adverse decision in her own case, she was entitled individually to fair notice and an opportunity to be heard in contesting that decision. In re Proposed Quest Academy Charter School of Montclair Founders Group, 216 N.J. 370, 384 (2013); In re Registrant, C.A., 146 N.J. 71, 94 (1996). Such notice to her has not been substantiated here.

For all of these reasons, we conclude that the matter must be remanded to the Division. We are mindful that appellant has not tendered a certification with a proffer attesting, under penalty of perjury, that she did not receive the March 28, 2013 letter. We agree with the Division that it would have been preferable for appellant to have done so before embarking on this appeal. As a condition of a remand, appellant must tender such a certification to the Division within fifteen days of our opinion.¹ If the Division is satisfied with the certification and yields its position that service was properly made upon appellant, then the merits of the case shall proceed expeditiously to a fair hearing. If, conversely, the Division is dissatisfied with the certification and persists in doubting appellant's credibility as to her assertion of lack of service, the matter shall be referred to the Office of Administrative Law ("OAL") for a fact-finding hearing limited to the contested service issues. The OAL's ruling on that subject may then, in turn, be reviewed or challenged before the agency, and ultimately by this court if further review is sought.

Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

rebuttal presumption that any assets disposed of by an institutionalized individual for less than fair market value during a period of sixty months before applying for Medicaid

 There is rebuttal presumption that any assets disposed of by an institutionalized individual for less than fair market value during a period of sixty months before applying for Medicaid

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

S.L.,

Petitioner-Appellant,

v.

DIVISION OF MEDICAL ASSISTANCE

AND HEALTH SERVICES AND ESSEX

COUNTY BOARD OF SOCIAL SERVICES,

Respondent-Respondent.

__________________________________

September 2, 2014

Argued October 23, 2013 – Decided

Before Judges Fuentes, Simonelli and Haas.

On appeal from the Department of Human Services, Division of Medical Assistance and Health Services, Docket No. 0710458345-01.

Lawrence A. Leven argued the cause for appellant (Mr. Leven, attorney; Debra D. Tedesco, on the brief).

Jennifer L. Finkel, Deputy Attorney General, argued the cause for respondent (John J. Hoffman, Acting Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Ms. Finkel, on the brief).

PER CURIAM

In December 2009, appellant S.L., then ninety-five years old, entered the Arbor Glen Care Center in Cedar Grove (Arbor Glen), after she fell and fractured four ribs the previous month in a rehabilitation center in Florida, where she was transferred to recover from a mild stroke she had suffered in June 2009. S.L. was able to pay for her stay at Arbor Glen until she depleted her personal funds and other assets in August 2010.

S.L. applied for Medicaid assistance to cover the cost of her stay at Arbor Glen. The Essex County Board of Social Services, also referred to as the County Welfare Agency (CWA), approved her Medicaid application but imposed a 5.57 month ineligibility penalty. The CWA imposed this penalty because S.L. had made four monetary transfers or "gifts" to her children totaling $40,000 during a two-year period from December 2007 to March 2009. The CWA determined S.L. was eligible to receive Medicaid assistance effective January 18, 2011.

S.L. appealed the CWA's decision to the Division of Medical Assistance and Health Services (DMAHS) in New Jersey's Department of Human Services. The DMAHS Director transferred the case to the Office of Administrative Law for an evidentiary hearing before an Administrative Law Judge (ALJ). Based on the record developed at this hearing, which included S.L.'s testimony, who was by then ninety-seven years old, the ALJ issued an initial decision finding no legal or factual basis to alter the decision of the CWA.

The federal standards for Medicaid eligibility adopted by Congress under 42 U.S.C.A. § 1396p(c)(1)(B)(i), and codified in this State by the DMAHS under N.J.A.C. 10:71-4(a) and N.J.A.C. 10:71-4.10(j), create a rebuttal presumption that any assets disposed of by an institutionalized individual for less than fair market value during a period of sixty months before applying for Medicaid assistance is done to establish Medicaid eligibility. The ALJ found in her initial decision that S.L. failed to rebut this presumption. The DMAHS Director adopted the ALJ's decision without modification.

S.L. now appeals the Director's final decision to this court. Based on our standard of review of decisions made by state administrative agencies, we affirm. We derive the following facts from the record developed before the ALJ and any submissions made by the parties to the DMAHS Director.

I

S.L. was born in 1914. She and her husband had two children, a son H.L., and a daughter M.L. Appellant moved from New Jersey to Florida in 1981, the year after her husband died. She was then sixty-seven years old. She lived a fully independent life in an apartment in Florida from 1981 until 2002, when her son H.L moved in with her after his divorce.

Appellant testified at the hearing before the ALJ held on November 7, 2011. She responded to all questions posed to her in a lucid, narrative style. She explained that after her son moved in with her in 2002, he helped her perform daily tasks of living. He drove her "around, took me to the doctor, took me to the movies, took me shopping. He did a lot of errands for me."

Appellant transferred $10,000 to her son in December 2007. She also issued a check in the amount of $10,000 to her daughter H.L. a month later in January 2008. She characterized these gestures on her part as "gifts" to her children. When asked directly by her lawyer to explain the reasons for giving these gifts to her children, she explained:

I had the money and I thought how nice it would be to see them spend it. . . . Well I thought it would be nice to see them enjoy the money that I had. I had everything I wanted.

Q. When you gave them the first $20,000 you still had money for yourself right?

A. Oh, yes, I didn't give them all my money.

Q. When you gave them the money, the first money, did you think, "Well I have to give them this money because I am going to go into a nursing home," or anything like that?

A. No, we never discussed nursing home. I was always the type of person I did everything myself [sic].

Appellant was ninety-four years old at the time she made these initial gifts to her children totaling $20,000. Appellant testified she stopped driving in 2004 when she was ninety years old. She nevertheless continued to have a car titled in her name until 2009. On March 9, 2009, she issued a check in the amount of $10,000 to a Mazda automobile dealer in Florida, as a down payment for a car her son purchased in his name. She testified that she wanted to buy a new car, but could not purchase one in her name because she did not have an active driver's license, and the car she previously had in her name was by then ten years old. She testified her son drove her everywhere she needed to go: "We were almost like husband and wife. . . . He took me to the movies, we went together as a couple although it was my son." On March 13, 2009, appellant issued a check to her daughter for $10,000.

Appellant's $40,000 in gifts to her children were all reported to the Internal Revenue Service as permissible tax-free gifts. All of the these checks written by appellant were in her own handwriting. She was ninety-three years old when she wrote her first $10,000 check to her son in 2007, and ninety-five years old when she gave her daughter the final $10,000 gift in 2009.

According to appellant, during the two-year period she made these gifts to her children she was completely lucid and managed her own affairs. With respect to physical health, other than "a slight loss of peripheral vision," she was not suffering from any physically debilitating conditions and "had not been diagnosed with any chronic or long term illness." At the time she made these gifts to her children, appellant was receiving a monthly social security benefit in the amount of $1,608.56, and a monthly pension distribution in the amount of $285.56. After the transfers, she retained approximately $60,000 in her savings account.

As was her custom since moving to Florida, appellant visited her daughter in New Jersey in the summer of 2009. She flew by herself and expected to return to her home in Florida in autumn. Appellant testified that sometime after she arrived at her daughter's home in June 2009, she "felt funny one day and thought it was something I ate." After feeling "woozy," she said her daughter told her to "lay down, take care." Appellant submitted a certification in which she described in more detail the medical event that led to this legal dispute:

The next day the headache was worse and my speech was slurred. My daughter drove me to the emergency room at Mountainside Hospital in Montclair.¹ I was admitted to the hospital on June 27, 2009, with a minor stroke. I was discharged to Arbor Glen Care Center in Cedar Grove, where I stayed until July 11, 2009. This incident was totally unexpected and was medically impossible for me to anticipate its occurrence.²

I returned home to Florida on July 12, 2009 and it was determined by my physician, Dr. Green, that I needed rehabilitation therapy. I was admitted to Lakeview Center, in Delray, Florida until October 2009.

Upon my release in October [2009], I went home. In November 2009 I fell at home and broke four ribs. My children and I agreed I needed more care than they could provide because they both work full time. I did not want to have full time nursing assistance in my home. We decided I would return to New Jersey and live at Arbor Glen. I picked Arbor Glen because when I stayed there in July 2009 I liked the facility. In addition, it is only ten minutes from where my daughter lives.

When I gave my children the gifts I anticipated living in Florida with my son for the rest of my life. I wanted to give these monies to my children while I was alive in order to see them enjoy the money. I emphatically deny that these gifts were given to my children because I was anticipating going into a nursing home and giving away my assets to become eligible for Medicaid.

Appellant's daughter M.L. corroborated her mother's testimony. She testified that neither she nor her brother contemplated a nursing home as a probable place for appellant's care at the time she accepted the gifts. Both she and her brother were convinced their mother "would live out her life in Florida[.]"

At the time appellant entered Arbor Glen in December 2009, she had approximately $60,000 in savings. She initially paid for her stay out of these personal funds until they were depleted in August 2010. She applied for Medicaid assistance that same month. The CWA approved her application effective January 18, 2011, subject to an ineligibility penalty of 5.57 months due to the "uncompensated value of transferred funds (40,000, given to children)[.]"

II

In the Initial Decision upholding the CWA's determination, the ALJ found it was not "unreasonable that [appellant] wanted to give her children money while she was alive[.]" However, noting appellant's age, health issues, and lifestyle restrictions, the ALJ concluded appellant had not overcome the presumption that Medicaid eligibility was a factor in her decision to transfer assets to her children.

Appellant filed exceptions to the ALJ's decision with the Director of the DMAHS, claiming that her previous medical issues were neither chronic nor debilitating, and stemmed only from a minor stroke she had in 1999. Appellant emphasized that she established her health and vitality when she testified at the hearing before the ALJ at age ninety-seven. She argued she satisfied her burden to rebut the regulatory presumption because the CWA could not produce any evidence that undermined the credibility of her testimony that she was not contemplating applying for Medicaid assistance during the two-year look-back period between 2007 and 2009. Finally, appellant argued to the Director that the ALJ partly relied on a letter dated May 27, 2011, claiming she had a significant mobility impairment in 2006. Appellant asserts she was not aware of this letter, and it was not produced to her lawyer before she testified.

In a Final Agency Decision dated February 3, 2012, the Director adopted the Initial Decision of the ALJ, finding the record showed appellant was not in "excellent health" at the time she made these gifts to her children. The Director determined appellant had not met her burden to rebut the presumption that these gifts were intended to accelerate appellant's eligibility for Medicaid assistance and upheld the penalty period imposed by the CWA.

III

As an appellate court, we have a limited standard of review of decisions made by a State administrative agency. Circus Liquors, Inc. v. Middletown Twp., 199 N.J. 1, 9 (2009). We must "'determine whether the administrative action was arbitrary, capricious or unreasonable.'"E.S. v. Div. of Med. Assistance & Health Servs., 412 N.J. Super. 340, 348 (App. Div. 2010) (quoting Burris v. Police Dep't, Twp. of W. Orange,338 N.J. Super. 493, 496 (App. Div. 2001)). We are bound to uphold the determination of an administrative agency as long as it is supported by "substantial credible evidence in the record as a whole." Ibid. (citing Circus Liquors, supra, 199 N.J. at 10).

The burden of showing the agency acted in an arbitrary, capricious, or unreasonable manner rests on the party opposing the administrative action. Id. at 349 (citing In re Arenas, 385 N.J. Super. 440, 443-44 (App. Div.), certif. denied, 188 N.J. 219 (2006)). It is not the function of the reviewing court to substitute its independent judgment on the facts for that of an administrative agency. In re Grossman,127 N.J. Super. 13, 23 (App. Div.), certif. denied, 65 N.J. 292 (1974).

We must also "'defer to an agency's technical expertise, its superior knowledge of its subject matter area, and its fact-finding role,'" and therefore are "obliged to accept all factual findings that are supported by sufficient credible evidence." Futterman v. Bd. of Review, 421 N.J. Super. 281, 287 (App. Div. 2011) (quoting Messick v. Bd. of Review, 420 N.J. Super. 321, 325 (App. Div. 2011)). Although we are not bound by an agency's interpretation of law, we accord a degree of deference when the agency interprets a statute or a regulation that falls "within its implementing and enforcing responsibility." Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J. Super. 52, 56 (App. Div. 2001). Our authority to intervene is limited to "those rare circumstances in which an agency action is clearly inconsistent with the agency's statutory mission or with other state policy." Futterman, supra, 421 N.J. Super. at 287.

Our state participates in the federal Medicaid program under the New Jersey Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1to -19.5. 42 U.S.C.A. § 1396a(a)(5) designates the New Jersey Department of Human Services to administer the New Jersey Medicaid program through DMAHS. N.J.S.A. 30:4D-5, -7; N.J.A.C. 10:49-1.1. Locally, CWAs are required to evaluate Medicaid eligibility. N.J.A.C. 10:71-2.2(a);N.J.A.C. 10:71-3.15. To establish eligibility, the applicant must:

1. Complete, with assistance from the CWA if needed, any forms required by the CWA as a part of the application process;

2. Assist the CWA in securing evidence that corroborates his or her statements; and

3. Report promptly any change affecting his or her circumstances.

[N.J.A.C. 10.71-2.2(e).]

"Medicaid is an intensely regulated program." H.K. v. State, 184 N.J. 367, 380 (2005). N.J.A.C. 10:71-4.5(c) provides that at the time of application, an individual will not be able to participate if his or her resources³ exceed $2,000.

An individual may not be eligible for Medicaid if he or she has "disposed of assets at less than fair market value⁴ at any time during or after the 60-month ["look-back"] period[.]" N.J.A.C. 10:71-4.10(a). A transfer during the look-back period gives rise to a rebuttable presumption that it was made to establish Medicaid eligibility. N.J.A.C. 10:71-4.10(j).

Medicaid subjects applicants who have made such transfers to a penalty calculated according to a specific formula. N.J.A.C. 10:71-4.10(m); E.S., supra, 412 N.J. Super. at 345. The penalty is a "period of time during which payment for long-term care level services is denied." N.J.A.C. 10:71-4.10(m). The applicant may rebut the presumption "by presenting convincing evidence that the assets were transferred exclusively (that is, solely) for some other purpose. . . . [T]he burden of proof shall rest with the applicant." N.J.A.C. 10:71-4.10(j).

The presumption that transfers were made to establish Medicaid eligibility may be rebutted only by showing that a transfer was made for some exclusive other purpose. Specifically:

(k) The presence of one or more of the following factors, while not conclusive, may indicate that the assets were transferred exclusively for some purpose other than establishing Medicaid eligibility for long term care services:

1. The occurrence after transfer of the asset of:

i. Traumatic onset of disability;

ii. Unexpected loss of other assets which would have precluded Medicaid eligibility; or

iii. Unexpected loss of income which would have precluded Medicaid eligibility;

2. Court-ordered transfer (when the court is not acting on behalf of, or at the direction of, the individual or the individual's spouse); or

3. Evidence of good faith effort to transfer the asset at fair market value.

[N.J.A.C. 10:71-4.10(k).]

Against this legal backdrop, we discern no basis to interfere with the Director's final decision upholding the 5.57 month ineligibility penalty imposed by the CWA based appellant's four monetary transfers or "gifts" to her children totaling $40,000 during a two-year period from December 2007 to March 2009. We are mindful that our society is at a pivotal point as it faces the challenges associated with the great number of "baby-boomers" who are reaching an age that has traditionally been viewed as "elderly."

Due to great medical advancements and other technological innovations, we are in the process of redefining the traditional meaning of "elderly." Our Legislature should seriously consider whether it is truly in the best interests of a just society to penalize a parent for trying to give her children a small part of resources she and her husband accumulated over a lifetime of work. Unfortunately, that public policy decision is not for this branch of government to make.

Affirmed.

1  Mountainside Hospital is actually located in the Borough of Glen Ridge.

2  At the time appellant was admitted to Mountainside, she was taking nine different types of medication, including oral medication for hypertension and high cholesterol. The hospital's discharge summary noted appellant also suffered from "carotid stenosis [which was] worked up several years ago at which time her primary care doctor felt that she was a poor surgical candidate, so there ha[d] been watchful waiting."

3  Resources are defined as:

any real or personal property which is owned by the applicant (or by those persons whose resources are deemed available to him or her, as described in N.J.A.C. 10:71-4.6) and which could be converted to cash to be used for his or her support and maintenance. Both liquid and nonliquid resources shall be considered in the determination of eligibility, unless such resources are specifically excluded under the provisions of N.J.A.C.10:71-4.4(b).

[N.J.A.C. 10:71-4.1(b).]

4  Fair Market Value is "an estimate of the value of an asset, based on generally available market information, if sold at the prevailing price at the time it was actually transferred." N.J.A.C. 10:71-4.10(b)(6). A transfer for "love and affection" is not considered a transfer for fair market value. N.J.A.C. 10:71-4.10(b)(6)(i).