What Does a Guardian of the Estate Do?
Whether because of age, disease, or disability, there are certain circumstances which can render an individual unable to make decisions for themselves. In instances like these, a legal guardian, also known as a conservator in some states, may be appointed by a Maryland circuit court to assist in making some or all personal and/or financial decisions. For the purposes of this blog, we are going to focus on one of the three types of guardianship, Guardian of the Estate. Specifically, we are going to answer a question we are asked frequently, “What does a guardian of the estate do?” So, let’s dive right in.
What Does a Guardian of the Estate Do?
Also known as guardianship of the property, guardianship of the estate is concerned with financial affairs only, and not personal decisions regarding medical care. The latter are covered under guardianship of the person. This bifurcated process allows for a more personalized assistance plan that leaves some of the ward’s decision-making powers intact. So, exactly what does a guardian of the estate do? What are their duties and responsibilities? While no two guardianship cases are ever exactly alike, the guardian’s responsibilities and powers frequently include day-to-day financial management, income collection (rent, pension, Social Security, etc.), property management, paying taxes, and financial planning. In the state of Maryland, a guardian of the estate is also required to file an inventory detailing the location, amount, and nature of the ward’s assets within sixty (60) days of appointment, as well as an annual accounting thereafter. The inventory is to include the following:
- 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
The guardian must also file an annual fiduciary account (including documentation) detailing 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. This must be filed annually within sixty (60) days of the anniversary of the appointment date.
The guardian must also maintain separate accounts for the individual, known as a ward, and themselves. They should 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. Furthermore, for estates greater than $10,000 in value, the guardian may be required to post a bond, protecting the ward against losses or damages due to misuse of assets.
What Happens if a Guardian Fails to Fulfill Their Duties?
If the guardian of the estate fails to fulfill the above duties and responsibilities, they can be removed as guardian. Furthermore, if they are found to have abused their powers or knowingly misused the ward’s assets, they may be subject to personal litigation or be forced to repay the state any money lost or mismanaged. For these reasons, it is advisable that any guardian of the estate do the following…
- Work with an accountant or, for larger estates, an investment firm
- Maintain detailed records and receipts
- Maintain court approval for larger purchases or before making charitable gifts
- Maintain separate bank accounts and never combine personal money with the ward’s monet
- Never borrow from the ward’s account
- Consult an experienced guardianship attorney throughout the entirety of the process
Who Can Be a Guardian of the Estate?
Legal guardianship is most often utilized for incapacitated seniors or adults with disabilities and, because of this, guardians are often family members or friends of the ward. However, there are circumstances when the court may appoint a public guardian, such as an attorney, if the court feels it is in the best interest of the ward.
A guardian of the estate 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 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.
An Experienced Guardianship Attorney 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 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.