Guardianships: What, Why and How

Posted on October 15, 2019

Originally published in October 2019

What is a Guardianship, and how does it differ from Power of Attorney?

A power of attorney provides the ability of one person to act on behalf of another. If the agent does act on behalf of another pursuant to the power of attorney, they must act in accordance with fiduciary standards. A power of attorney, however, does not compel one to act on behalf of another, there is no duty to act; just a requirement that if they do act, it must be in accordance with fiduciary standards.

Contrast that with a guardian, who has a legal responsibility to act in the best interests of the incapacitated person.

There are some actions by a guardian which require court approval, such as selling real estate, and other very specific transactions. Thus, a guardianship is generally instituted when a person lacks capacity to execute a power of attorney, a person who is named as power of attorney is not acting to ensure the individual’s needs are met, or a person is acting under a power of attorney but acting improperly.

Definition of Incapacitated Person

In order for a guardian to be appointed, the individual must be deemed to be an incapacitated person. “Incapacitated Person” means an adult whose ability to receive and evaluate information effectively and communicate decisions in any way is impaired to such a significant extent that they are partially or totally unable to manage their financial resources or to meet essential requirements for their physical health and safety. A physician or psychologist will file a report with the court setting forth the basis for determining incapacity. This is generally the only involvement of the physician or psychologist in the matter.

Incapacity can be determined as to both financial decisions, and personal (health care decisions). Incapacity can also even be further limited as to certain types of financial or personal decisions, although this is not a frequent occurrence.

What Happens When a Person is Adjudicated Incapacitated?

The individual’s ability to make any decision within the realm of the adjudication is removed.

If an individual is adjudicated incapacitated as to their financial decisions, they cannot make any agreement, sign any instrument, or otherwise, concerning those items.

If an individual is adjudicated incapacitated as to their personal decisions, they cannot make any decision, change or determination as to these items.

The guardian who is serving on behalf of the incapacitated person is responsible to make these decisions for an on behalf of the incapacitated person.

How do I obtain a Guardianship?

The first step is filing a guardianship petition with the Court. The petition sets forth various background information, information required by the guardianship statute, and most importantly, why the guardianship is being sought.

It also requires a physician/psychologist report to be filed. This report provides information such as the physician/psychologist’s educational information, where they work, what their specialty is, as well as their treatment history and assessment of the alleged incapacitated person. It is generally the only involvement of the physician in the guardianship.

After filing the petition and the associated documents, a hearing date is set, generally 30-45 days out. During this time period, the incapacitated person is provided notice of the guardianship by the Court, and given the opportunity to obtain court appointed counsel at no charge.

The hearing is generally quite quick (less than 5 minutes), and generally the incapacitated person does not need to attend the hearing.

What are the reporting requirements for Guardianships?

There are two types of guardianships – Guardians of the Estate (Financial) and Guardians of the Person (Health Care). Both can be obtained in the same guardianship petition.

Guardians of the Person – A report will be due starting one (1) year after the guardianship order is signed, and on an annual basis thereafter. It requires the guardian to report about where the incapacitated person resides, the status of their health, how frequently the guardian visits the incapacitated person, and for generally how long that visit is.

Guardians of the Estate – Within 90 days of the guardianship order, the guardian must file an inventory of all assets of the incapacitated person, and a general budget of what the expenses of the incapacitated person are expected to be. Thereafter, guardians of the estate will have to file yearly reports on what income was received by the guardian on behalf of the incapacitated person, and how it was spent on their behalf.

Originally published in October 2019