The purpose of an Article 81 discovery and turnover proceeding is to recover assets taken from an incapacitated person. The threshold question in an Article 81 Guardianship is whether there is a need for a guardian. After the court makes that determination, the alleged incapacitated person must either consent to the appointment or be deemed incapacitated after a hearing. If the court decides to appoint a guardian, they issue an Order and Judgment which outlines the powers granted the guardian. One such power provided for a property management guardian in Section 81.21 of the Mental Hygiene Law is the power to commence a discovery and turnover proceeding.
A discovery and turnover proceeding provides a post-judgment mechanism to address financial exploitation. The guardian can recover property that was improperly transferred before the guardianship. The logistics for the proceeding are set forth in Section 81.43 of the Mental Hygiene Law. A discovery and turnover proceeding is initiated by an Order to Show Cause and Petition. The Petition must set forth facts that tend to show that the incapacitated person’s assets are wrongfully in the possession of a third party. If the Petition alleges reasonable grounds to believe that a person has information about the property, the court must sign the Order.
Usually, the discovery portion of the proceeding Orders the Respondent to appear before the court for inquiry. The court can issue subpoenas for third party financial records. Ultimately, a hearing is held to determine proper ownership. The Judge can Order any third party to turn over the property to the guardian or grant a judgment against the third party for the value of the assets.
One of the main reasons for guardianships is that incapacitated people are vulnerable to financial abuse. An Article 81 discovery and turnover proceeding allows an efficient and expedited way to recover property. Otherwise, such a case could be tied up for years in Supreme Court. Consult an experienced guardianship attorney right away if you believe someone needs a guardian and/or is the victim of abuse or exploitation.