At C. Haner Law, we focus on two types of Guardianship Proceedings: Guardianship for Minor Children and Guardianship for Incapacitated Persons.
Guardianship for Minor Children
It’s a basic principal of law that anyone under 18 years old cannot legally own property. Of course, in most instances, this doesn’t present a problem. Even though the child thinks the bicycle or cell phone is theirs, it’s not – instead, it technically, legally belongs to the child’s parent, parents or legal guardian.
In our practice, the need to have a guardian appointed for a minor child typically arises in instances when either one or both of the child’s parents die unexpectedly and without a Last Will and Testament. Because a child cannot own property, any outright inheritance a child receives cannot be held by the child, but, instead, must be held by a guardian for the child. This type of guardian, is called a property management guardian.
When the Court appoints a property management guardian to hold a child’s inheritance, it’s standard practice that the guardian will be required to hold the child’s asset jointly with the Court, and in banks approved by the Court. In addition to the above, the Court will require the property management guardian to file an annual accounting with the Court, detailing all financial transactions which affect the child’s inheritance and asking the Court to pay reimbursement to the persons who have cared for the child and advanced money to pay for the child’s care, education, entertainment, etc. While this Court oversight can seem burdensome and unnecessary, it’s designed to ensure protection of the child’s inheritance.
In some instances, especially when a property management guardian holds a large sum of money inherited by a child, the property management guardian can ask the Court for permission to invest the child’s money with a financial advisor, the hope being that the market will outperform the simple interest the child receives on bank deposits. If this is sought, a formal petition must be presented to the Court detailing the reason for such request, the proposed investment strategy, a presentation of presumed rates of return prepared by the financial advisor, etc.
The second type of guardian appointed for a minor child is a personal needs guardian. A personal needs guardian, though typically also the property management guardian, need not be the property management guardian. A personal needs guardian’s job is to ensure the child is loved, cared for and receives a proper education.
By executing a Last Will and Testament, a parent can nominate who they would like to serve as the personal needs and property management guardian for a minor child. In addition, by executing a Will with appropriate provisions, the parent can usually avoid the need for a Court appointed property management guardian all together, via the incorporation of minor’s trust into the Will. Use of the minor’s trust not only avoids extensive Court oversight of the child’s inheritance, but also avoids the cost and hassle of having to ask Court permission to invest the child’s inheritance.
Guardianship for Incapacitated Persons
Seeking guardianship for an incapacitated person can be a very stressful and involved process, as well as a necessary one. These types of guardianship are typically sought to protect the well being and financial affairs of a loved one who is of an advanced age or suffering from dementia.
When a commencing a guardianship for an incapacitated person, the person alleging incapacity must gather a tremendous amount of documents and information demonstrating why the person alleged to be incapacitated requires a guardian.
Once the guardianship proceeding is commenced, the Court will appoint a Court Evaluator to investigate the allegations of incapacity. After the Court Evaluator feels that he/she has sufficient information to provide an opinion on the person’s incapacity, he/she will provide a written report to the Court detailing his/her findings and conclusions,
In addition to appointing a Court Evaluator, the Court often appoints an attorney to represent the interests of the person alleged to be incapacitated. Both the Court Evaluator and the attorney for the alleged incapacitated person are paid for their efforts.
Nearly every guardianship proceeding concludes with a formal hearing and trial during which witnesses are called, evidence is introduced, etc. The process of having a guardian appointed for an incapacitated persons typically takes between 2 and 3 months from start to finish.
When a guardian is appointed by the Court, the Court has the power to appoint either a personal needs guardian, who has the responsibility to ensure the incapacitated person is adequately cared for, or a property management guardian, who ensures the incapacitated person’s funds are used for the benefit of, and in accordance with the wishes or presumed wishes of the incapacitated person, or both a personal need guardian and a property management guardian. The personal needs and property management guardian are typically the same person, but this is not required. Any guardian appointed is required to take certain actions after Court appointment and to report the Court annual regarding any action taken by such Guardian.
The need to bring a guardianship proceeding for an incapacitated person can almost always be avoided by Advanced Planning, Estate Planning and Trust Planning.
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