3 Reasons You May Need A Guardianship

1. An adult has become mentally incapacitated or incompetent.

This is by far the most common reason a guardianship is needed. If your loved one failed to draw up a statutory power of attorney and medical power of attorney before he or she became incompetent, a guardianship of the person and of the estate may be the only option available to manage their business and medical affairs. Often, a spouse will be given broad authority to address these issues, but it is not certain. If there is no spouse in the picture, a guardianship definitely will be required.

An applicant for guardianship in this situation must have a doctor's certificate based on an examination of the person, covering a wide range of areas, to determine whether a guardian is needed to handle all of the affairs of the incompetent or incapacitated person (called the "ward"), or whether the person is still able to do some things on his or her own. If the court determines that the ward is unable to take care of all of their needs, a guardian of the person and the estate of the ward likely will be needed.

An attorney ad litem (legal representative) must be appointed to represent the interests of the ward. These fees have to be paid by the guardianship estate. The ad litem, as part of his or her duty of representation, may question the applicant's motive in seeking the guardianship and their fitness to fill that role, in addition to whether the ward is truly incompetent.

More than one person may seek to be appointed the guardian, or one person may apply to be guardian of the person and another of the estate, again triggering potential family feuds. Once the guardianship is opened, court approval of many actions on behalf of the ward is required. Yearly accountings for the receipt and distribution of property of the estate and the condition of the person must be filed as long as the guardianship remains in effect. Once the ward dies, additional accounting and other court proceedings are required to close the guardianship.

The simple way to avoid having to seek guardianship of the person and estate if a loved one becomes incompetent is to have them execute a statutory and a medical power of attorney while still competent. 

2. A minor child's parents are deceased.

The most tragic situation in which a guardianship is required arises when both of a minor child's parents die. As long as one parent is still alive, the surviving parent is the natural guardian of the child, without any court involvement needed. This is true whether the parents currently are married or not. The parents may have done prior planning to designate a guardian for both the person and the estate of a child. If so, that person should apply to the county probate court for appointment as the guardian. If such designation has not been made, a surviving relative must apply to a probate court to determine who should be appointed the guardian of the child or children.

In this situation, the court must choose from a statutory list of persons who have priority to be appointed as the guardian of the person and of the estate. Some of those persons may be the last ones you would want to serve in those positions. You could end up with grandparents or siblings fighting each other over who should serve as guardians. This can ruin family relationships and cause extreme stress to the children.

The legal costs associated with any guardianship proceeding are extreme. In addition to legal fees for the person or persons seeking to be appointed guardians, the court must appoint an attorney ad litem (a legal representative) for the children to protect their interests. The fees for the ad litem must be paid by one of the parties or out of the estate. Once the guardians are appointed, many actions on behalf of the children require prior court approval, and extremely detailed yearly accountings have to be filed until the child turns 18.

Another substantial drawback to creating a guardianship for a minor child is that the guardianship must end at age 18. Whatever estate remains at that time must be distributed to the child, whether they are mature enough to handle it or not. Most parents do not wish their children to have access to whatever estate they inherit at age 18.

The simple solution to avoiding a guardianship of the estate of a minor child is to set up a trust for his or her benefit under your Will, to whatever age you believe is appropriate. You also have the right to name the trustee who would serve to manage the estate until that time. You also can state in your Will or a separate document who you would want to serve as the guardian of the person of the child, which means who would have custody.

3. An adult is functioning with diminished capacity in one or more areas.

There are many instances in which an adult with learning disabilities, for example, can manage much of his or her own affairs but still needs some assistance. This frequently happens when a child with diminished capacity turns 18, and their parents' authority to manage their child's affairs ends. In this instance, a limited guardianship may be appropriate.

Again, a doctor must perform an examination of the proposed ward to determine the extent of their incapacity. They may find the ward only needs assistance in certain areas of functioning but can make other decisions or take other actions on his or her own. Courts favor reserving powers to the ward unless the doctor certifies the ward is not capable of exercising those powers. In these cases, the guardianship order will spell out what powers the guardian has and what powers are reserved to the ward. 

The long-term expense of this type of guardianship may be less than a full guardianship, but it is still considerable. Unfortunately, if the loved one never had full competency to draw up a statutory or medical power of attorney, guardianship may be the only option. However, there are many resources available to individuals with such disabilities that should be explored before seeking guardianship. 

If you think a guardianship may be necessary or need help developing a simple plan for your loved one before a guardianship is needed, contact Adair M. Buckner for a free initial consultation*.

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*(The free consultation does not cover actual review of documents or giving legal advice on a specific situation.)

** This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, specific tax, legal, or accounting advice. We can only give specific advice upon consulting directly with you and reviewing your exact situation.

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