Guardianship of the Property in Maryland
In Maryland, guardianship, sometimes referred to as a conservatorship in other states, can take many forms. Most common are Guardianship of the Property, Guardianship of the Person, Guardianship of the Person and Property, and Short-Term or Temporary Guardianship. In this article, we are going to focus on Guardianship of the Property – what it is, duties involved, who can serve as legal guardian, and how to petition the court for guardianship.
What is a Legal Guardian?
When a person is unable to care for their own personal and/or financial affairs on either a short-term or long-term basis, the court may appoint a legal guardian to fulfill these duties. Legal guardianship is most often utilized for incapacitated seniors or adults with disabilities. The guardian assumes all (or some) decision-making authority over the other person, called a ward. In various documents, the ward may also be referred to as the “disabled person,” “disabled adult,” “ward,” an “incapacitated person,” a “person under guardianship,” or a “vulnerable adult.”
A legal guardian acts as an agent of the court. Not only do they have responsibilities to the ward, but they also have very specific duties to the court.
What is Guardianship of the Property?
A guardian of the property manages the ward’s financial affairs. This is different from a guardian of the person, who is responsible for making the ward’s healthcare decisions. In some situations, the ward may need assistance with their financial and legal affairs but may remain capable of making their own healthcare decisions. This bifurcated process allows for a more personalized assistance plan that leaves some of the ward’s decision-making powers intact.
What Are the Specific Duties of a Guardian of the Property?
While no two guardianship cases are ever exactly alike, the guardian’s responsibilities and powers can include day-to-day financial management, income collection (rent, pension, Social Security, etc.), property management, paying taxes, and financial planning.
In Maryland, a guardian of a property is required to file an inventory detailing the location, amount, and nature of the ward’s assets within sixty (60) days of appointment, file an annual accounting thereafter (one year from the date of appointment), and maintain accounts for the ward separate from their own. The inventory must include the ward’s:
- Real Estate (mortgage balance and lender)
- Cash and Cash Equivalents (checking and savings accounts, and IRAs)
- Personal Property (vehicles, jewelry, etc.)
- Stocks (number of shares)
- Bonds (issuer, value, and maturity date)
- Debts
- Life Insurance Policies
Additionally, the guardian of the property is required to provide a fiduciary account annually within sixty (60) days of the anniversary of the appointment date. The fiduciary account reports to the court any changes in the ward’s assets (e.g., real estate, bank accounts, retirement accounts), provide the liabilities (e.g., loans, credit card debt), and the income and disbursements during the course of the year. You will need to provide documentation to the court to support your fiduciary account.
The guardian will also retitle the ward’s accounts (bank accounts, investment accounts, and IRA’s) to reflect the guardianship status and to facilitate the management of the ward’s accounts. For guardianship estates with a value greater than $10,000, the court may also require the guardian to post a bond. The bond protects the ward against losses or damages if the guardian misuses the ward’s assets.
If the guardian fails to meet the above standards, they can be removed as guardian, subject to personal litigation, or be forced to repay the estate any money lost or mismanaged. Therefore, it is in the guardian’s best interest to follow best practices:
- Consider using an accountant
- If the ward’s estate is large or complex, consider an investment firm
- Keep detailed receipts
- Get court approval for large purchases
- Get court approval before making charitable gifts
- Never combine personal money with the ward’s money
- Never borrow from the ward’s accounts
Who Can Become a Guardian of the Property?
Legal guardians appointed by the court are typically family members or friends of the ward. However, there are circumstances when the court may appoint a public guardian, such as an attorney. At the end of the day, the court will try to do what’s in the best interest of the ward.
A guardian of the property does not need to have any specialized knowledge or experience regarding the handling of financial assets. The legal guardian is charged to “exercise the care and skill of a [person] of ordinary prudence dealing with his own property.”
If at any point you are no longer able to fulfill your duties as guardian, contact the Court Clerk or Trust Office or consult a lawyer about the proper procedures.
Petitioning for Guardianship of the Property
Establishing guardianship in Maryland is a technical and arduous legal process.
- The person seeking guardianship (the petitioner) files a petition with the Maryland circuit court in the jurisdiction where the “alleged disabled person” resides. The petitioner must be an interested person as defined by Maryland law (Md. Code, Estates and Trusts Article § 13-101).
- The court conducts a hearing to determine whether guardianship is necessary. If the proceeding is contested, the petitioner and their attorney will prepare for a trial. They will need to present evidence of the ward’s lack of capacity to make financial or legal decisions, as well as evidence that supports the petitioner’s ability to serve as guardian.
- If the court determines that guardianship is the best course, it will issue an order outlining the terms and conditions of the appointment. The court may ultimately appoint a legal guardianship for the person, property, or both.
If you are considering a petition for guardianship, you should first consult with a qualified guardianship attorney. Entering into a guardianship should not be taken lightly. It’s a challenging job and can have a profound effect on the ward’s daily life. Your attorney will help you better understand the guardianship process, which often varies slightly from county to county in Maryland.
Legal Guardianship Services in Maryland
PathFinder Law Group, located in Towson, Maryland, specializes in estate planning, elder law, estate and trust administration, special needs planning and trusts, and guardianship. Let us assist you in determining if a guardianship is required and filing petitions for guardianship if deemed necessary. While you may be able to complete some of the documents or forms on your own, it is always best to talk to consult an experienced attorney when planning the future of a loved one.
To contact PathFinder Law Group about your planning needs, please complete our Contact Us form, call (443) 579-4529 or email staff@pathfinderlawgroup.com. We are here to guide you through life’s milestones in a way that is compassionate and reassuring.