Guardianships are a complicated legal proceeding. Most people have no clue exactly how complicated and expensive they are. However, there are estate planning tools that avoid you having to create a guardianship.
Unfortunately, if those tools have not been used before the need arises there may not be another option. If those tools were not used, the choice of who will serve as a guardian will be left up to the court and not to the person you otherwise would choose. There are many other negative consequences.
3 Main Reasons To Set Up A Guardianship For Another Person
There are three main reasons you would need to set up a guardianship for another person.
1. A minor child’s parents are deceased.
The most tragic situation for when a guardianship is required is 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. However, if both parents perish, and no prior planning has designated who they want to serve as the guardian of both the person and the estate of a child, someone must apply to a probate court for appointment of such guardians.
In this situation, the court has a list of persons who have priority to be appointed as guardian. Some of those persons may be the last people you would want to be serving in those positions. You could end up with grandparents or siblings fighting each other over who should serve as guardians. This can ruin a family relationship and cause extreme stress to the children.
The legal costs involved in any guardianship proceeding are extreme. In addition to legal fees for those persons seeking to be appointed guardian, an attorney ad litem (legal representative) for the children must be appointed by the court 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.
The other substantial drawback to having to create 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.
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 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.
2. An adult has become mentally incapacitated or incompetent.
This is by far the most common reason a guardianship is needed. If you have failed to draw up a statutory power of attorney before you become incompetent, a guardianship is the only option available. An applicant 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, or whether the person is still able to do some things on his or her own.
Once again, an attorney ad litem (legal representative) must be appointed to represent the interests of the person for whom the guardianship is sought (called the “ward”). Again, these fees have to be paid by the guardianship estate. The ad litem may seriously question the applicant’s motive in seeking the guardianship and their fitness to fill that role in addition to whether the ward really is incompetent. Even obtaining the appointment as a guardian can be difficult.
More than one person may seek to be appointed the guardian, again triggering potential family feuds. And, once again, court approval of many actions on behalf of the ward is required and yearly accountings 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 solution is to have a power of attorney naming the person to act as your agent should you become incapacitated or incompetent. But you can only do this while you are still competent. Procrastination can be extremely expensive!
3. An adult is functioning with diminished capacity in some area.
In this instance, a limited guardianship may be appropriate. A doctor may find the ward only needs assistance in certain areas of functioning but can make some decisions or take certain actions on their own. Courts favor trying to reserve powers to the ward unless the doctor certifies they are not capable of exercising those powers. The long-term expense of this type of guardianship may be less than a full guardianship but is still considerable.
The simple solution again is to draw up a power of attorney prior to diminished capacity setting in.
If you think a guardianship may be necessary or need help putting in place a simple solution before a guardianship is needed, contact Adair M. Buckner for a free initial consultation*.
*(The free consultation does not cover actual review of documents or giving legal advice on a specific situation.)