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06/21/12 It's The Law: Guardian Authority Is Limited

Question:

A guardian was just appointed by the court for my friend’s grandfather. What exactly is a guardian?

Answer:

A guardian is a person or institution appointed by a circuit court judge in Florida to act on behalf of a ward’s person, property, or both. A limited guardian is a guardian appointed to exercise legal rights and powers with respect to some, but not all, tasks of a person under disability or incapacity. An example of a limited guardian is a guardian appointed to manage and administer insurance proceeds or results of a lawsuit benefiting a minor, until the minor reaches the age or majority.

A plenary guardian is a guardian appointed by the court to exercise all delegable legal rights and powers of a ward after the court finds the ward lacks capacity to perform all of the tasks necessary to care for his or her person or property.

The court’s order appointing a guardian can define, expand or limit the guardian’s powers. Once appointed, the guardian makes decisions and takes action on behalf of the ward within the guardian’s authority. Any previous legal ability of the ward to make those decisions and take action is legally terminated. If the incapacity is temporary, the guardianship may also terminate when the ward’s capacity is restored.

The primary purpose of most guardianships is to manage assets of a person who is incapacitated. Unless limited by a court, Florida statutes grant guardians power to conduct routine management activities involving the ward’s assets. Statutory powers include the right to receive assets, vote stocks, insure assets, pay taxes and assessments on the ward’s property, pay reasonable living expenses of the ward and invest the ward’s assets.

A guardian must file an initial guardianship report with the court within sixty days after appointment. The initial report of the guardian of property is a verified inventory. The initial report for a guardian of the person is a plan. An initial guardianship plan must include provision of medical or personal care service, provision of social and personal services, place and kind of residential setting, application of health and accident insurance and any other private or governmental benefits to which the ward may be entitled and any physical or mental examinations needed to determine the ward’s medical and mental health treatment needs.

The guardian must also file an annual guardianship plan updating information about the ward and an annual accounting. The accounting is audited by the court.

Most actions beyond routine management of the ward’s property require court approval. By statute, a guardian must obtain court approval either by specific request or an approved annual or amended guardianship report to take the following actions:

  1. Enter leases;
  2. To borrow money;
  3. Compromise, settle, prosecute or defend claims;
  4. Sell or mortgage property;
  5. Purchase real estate; and
  6. If the ward is a minor, pay expenses of the ward’s support, health, maintenance and education if the ward’s parents, or either, are alive.

Guardianships can be expensive. A guardian is entitled to a fee. There are court filing fees, audit fees, the guardian is entitled to payment and there are often substantial attorney fees. An attorney must sign virtually all documents filed by the guardian with the court, including the annual accounting. That means the attorney must be more than passively involved in review of the guardian’s action

Because of these expenses, our firm often seeks to avoid guardianships. A guardianship is really only necessary where the ward is under a legal incapacity that cannot be remedied without a guardianship (for example, statutory mandate that a guardian be appointed to administer a minor’s settlement proceeds) or where the ward is being abused or in danger of abuse.

When elderly persons are involved, a family member or members often takes on the role of guardian without formal appointment by a court. In those cases, elderly person places a family on bank accounts, etc., or we can even create a revocable living trust and the elderly person appoints a family member or members to serve as trustee.

In some cases, the family is actually the problem, in which case a guardian is required. And, if no family member is willing and deemed suitable to serve as guardian by the court, a professional guardian will be appointed adding yet another layer of complexity and expense.

In many cases, a guardianship is both appropriate and necessary. In others, a guardianship can be overkill. This is one area where the parties should explore all options with an experienced attorney.

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