What is Guardianship?

  

Guardianship is the state statutory framework that governs a person who is appointed by the Court to make decisions for another person, frequently called the ward, as a result of some form of incapacity.  Since the law is state law, there are many provisions about guardianship law that are unique to each state.  Most states provide that the guardianship law of that state applies when the ward resides in the state, or if the ward does not reside in the state but has property, typically real estate, within the state.  Most states consider the appointment of a guardian and the application of guardianship law to be a remedy of last resort.  In order for a court to appoint a guardian, the court must judicially determine that the ward lacks certain abilities or capacities and that there are no less restrictive alternatives such that the court must remove the legal right of the person to make decisions and delegate that right to another person, namely the guardian.  Alternatives that should be considered before seeking the guardianship process would include powers of attorney for financial matters, powers of attorney for medical decisions (sometimes referred to as health care surrogates), and living trusts.  All of these are mechanisms in which the person who may become incapacitated has previously appointed or designated certain agents to make decisions for them if they cannot.  Frequently, instruments such as the power of attorney, living trust, and health care surrogate or medical power of attorney, can be adequately drafted to protect the incapacitated person’s ability to have their needs met without further court intervention. 

 

Types of Guardianships

 

Most often, states divide guardianships into various types. 

  

Guardian of the Property

This is sometimes known as a conservatorship.  The guardian of the property deals with the various property rights of an individual.  These would include the right to contract, to transfer or dispose of property, to apply for government benefits, sue and defend lawsuits, and otherwise deal with financial interests such as businesses and investments. 

Guardian of the Person

Guardian of the person typically deals with the more personal rights such as making medical decisions, place of residence, and social interaction.  Under certain circumstances, it can also include issues such as educational rights and decisions regarding rehabilitation.

Voluntary Guardianship

Many states have a provision for voluntary guardianship.  A voluntary guardian assumes that the person has at least some understanding or capacity to make the decision regarding the appointment of a guardian.  Generally, this form of guardianship is for property issues.  Voluntary guardianship does not involve the expense or efforts to prove incapacity because it is consensual by nature.  Most often, these guardianships can be terminated relatively easily. 

Involuntary Guardianship

This term is used to describe the method in which the guardianship was established.  It can be a guardian of the person, property, or both and describes the situation in which a person had capacity and because of injury or illness, has lost capacity.  Each state varies in their procedures to establish or prove incapacity.  Some states provide for the appointment of various doctors or an examining committee to examine the ward and report to the court their finding on capacity.  The variations in this procedure directly affect the cost and involvement to state to establish a guardianship.  As the name indicates, it is an adversarial process and generally provides for protections such as the appointment of an attorney to represent the ward in the process.

Natural Guardians

Some states will define by statute or case law that the natural parents of a minor are considered the natural guardians of that minor.  If statutorily defined, the purpose is usually to limit the authority of the parent regarding financial decisions.  This typically arises when the minor inherits money or has a claim for personal injury that is greater than some listed monetary value.  If the settlement or inheritance is greater than the listed monetary value, then the guardian must seek court approval and supervision regarding those funds. 

Minor Guardianship

A minor guardianship is typically the complement to the limited, natural guardianship.  If a parent has limited statutory authority regarding inheritances or settlements over a certain dollar figure, a minor guardianship is established to provide court supervision of those funds and protection of the funds for the minor.  A minor guardianship may also become necessary as a result of a minor having no living natural guardian.  Each state establishes its own procedures to establish a minor guardianship.  Frequently, the minor guardianship is more in the nature of a voluntary guardianship in that it is not required to prove incapacities.  The proceedings are typically more about establishing the appropriateness of a settlement and the actions regarding those funds after their receipt.  When a minor reaches the age of majority in that state, then the minor guardianship would be terminated. 

Each state determines who may be guardian and the various qualifications necessary to be a guardian.  A guardianship is started when some person files with the court a request to determine the need of a guardianship.  Depending on the type of guardianship sought, the procedures to make that determination will be followed.  Once the court determines that a guardianship is needed, then the court must determine who should serve as guardian.  These qualifications are often written in the form of prohibited characteristics such as prohibiting people who have been convicted of a felony from serving as a guardian.

The guardian is the court-appointed fiduciary and as a result, is answerable to both the ward and the court for their actions.  Each state varies in the amount of supervision and statutory obligations imposed on the guardian.  Some states are very restrictive in what a guardian has authority to do without court approval and may require a number of reports to be submitted to the court.  Other states have few reporting requirements of the guardian to the court.  Counsel should be sought for each state in which the guardian will be acting as the laws and duties of the guardian will vary.

Each guardian has some generic duties that are pretty consistent throughout the states.  The first includes a duty to act for the best interests of the ward.  This can apply both to financial decisions and management of property, as well as decisions regarding the ward’s more personal interests.  Many states require that the guardian of the property report to the court with an initial inventory of all property subject to the guardianship, as well as provide periodic accountings for all receipts and expenditures made by the guardian.  Some states require that the guardian of the person provide an annual care plan for the ward’s health and social well-being. 

There are further duties associated with the winding up of a guardianship.  A guardianship generally ends upon the death of the ward, the minor attaining the age of majority, or if the ward moves out of the state in which the guardianship was established.  Once there is no longer a need for the guardian, the guardian must report to the court and any interested persons with a final accounting of any actions taken by the guardian.  Upon approval of this final accounting, the court will discharge the guardian.  Until the court has discharged the guardian, the guardian will face continued duties and liabilities regarding the ward’s property.