Background
Definition. A guardianship is used in California when a person is unable to handle their own financial affairs or take care of themselves physically, so the court appoints someone else to handle these matters.
Since 1981, guardianship in California can only be obtained for a person under the age of 18. However, other states use the term “guardianship” for what California now calls a conservatorship.
Terminology. A guardianship must be established by a court. The person who needs the help is called a “guardian” and the person who is given the authority to handle the financial, medical, and/or other affairs of the person who needs the help is the “guardian.”
Types of Conservatories. There are two basic types of guardianships, a guardianship of the person and a guardianship of the estate. Often a conservator fills both roles, but it doesn’t have to be that way.
Curator of the Person. A guardian of the person ensures that the ward has adequate food, clothing, housing, medical care, social contact, and sources of enjoyment.
estate curator. A conservator of the estate manages the ward’s finances.
A conservator of the estate must use the ward’s money and other assets to support (and educate, if applicable) the ward and any dependents.
If the proper court order is obtained, the guardian can handle not only the ward’s personal finances, but also his business affairs.
The process
Start of the process. A guardianship is initiated by filing documents with the Probate Court and serving copies on the proposed ward and his or her next of kin.
Obviously, this can be a painful process for the conservatee, who is required to give up their rights to manage their finances, make their own medical decisions, etc. Still, sometimes a guardianship is unavoidable.
court investigator. A short investigator should speak to the proposed ward and others who may know something about the situation.
Hearing. A hearing date is scheduled and at the hearing the judge decides if a conservator will be appointed and, if so, who it will be.
Unless the proposed ward is medically unable to attend, the proposed ward must be present at the hearing, as the judge will often want to question him or her.
Please note that it is possible that another person, usually a family member, may object to the proceeding or propose a different guardian.
Inventory and Appraisal. Within 90 days from the date the judge signs the order appointing the probate conservator, the conservator must file a report with the court listing the assets owned by the conservatee.
More specifically, the conservator prepares an Inventory and Appraisal form. If there are assets other than cash, the conservator must send the Inventory and Appraisal to the probate arbitrator, who is appointed by the Court. The probate arbitrator will appraise the non-cash items, complete the Inventory and Appraisal by inserting the value of those items, and return it to the conservator, who must file it with the Court. It usually takes four to six weeks for the probate referee to return the form.
The estate is charged a fee for the appraisal, generally 1/10 of 1% of the total value of the conservatee’s estate, with a maximum fee of $10,000. The probate arbitrator can also recover expenses, such as mileage, in addition.
judicial investigations. Once guardianship is established, the court conducts periodic inquiries to confirm that guardianship is still needed and that the ward is being treated appropriately.
Bonds and Periodic Accounting. If the conservator is managing the conservatee’s finances (which is usually the case), the conservator must post a bond and provide periodic itemized accounts to the court listing all income and expenses.
bail amount. The amount of the bond depends on the conservatee’s assets and annual income, as well as whether a professional bond company (rather than family or friends) provides the bond.
Bail Bond Companies. Keep in mind that most bond companies will not issue a bond unless an attorney is handling the guardianship proceedings.
Conservatee Status Reports. Often the conservator must also prepare periodic status reports indicating how the conservatee is doing and what the conservator is doing in regards to her duties.
Cost. Usually, the cost of guardianship comes from the ward’s income or other assets.
Conservator Fees and Reimbursements.
Bills. Generally, the guardian is entitled to reimbursement for reasonable expenses incurred on behalf of the guardianship, including expenses to establish guardianship and sometimes money spent to support the ward prior to guardianship.
With the exception of court filing fees and bond premiums, the guardian must obtain court approval before receiving any refunds from the ward’s estate.
It is essential that the conservator keep receipts and records of all expenses (and reimbursements).
The conservator may hire help as needed, such as an accountant, as long as the expense is reasonable compared to the size of the conservatee’s estate.
Generally, the guardian cannot be reimbursed for postage, photocopying, mileage, or the cost of travel to the court.
Time Compensation.
It is crucial that a conservator who wishes to receive compensation for his or her time maintains a detailed written record of time spent in conservatorship, indicating the date, amount of time, and entry-by-entry work performed.
Courts generally allow a family member to recover only for time spent managing the estate’s finances, and not for time spent acting as a family member (such as visiting the ward) or acting as the person’s guardian .
Courts may not allow compensation for time if little time has been spent on financial matters or if the guardian has failed to follow court procedures, including timely filing of accounts.
Some courts have schedules establishing the compensation a guardian can receive for his or her time, often a percentage of the ward’s estate.
The curator can only request compensation from the Court for the time after the last of both:
90 days after the letters of guardianship were issued; and when the Inventory and Appraisal is presented.
Alternatives
Notary Powers. Unfortunately, the process of obtaining and maintaining a guardianship is expensive, so we strongly encourage people to sign powers of attorney designating who will handle their affairs if they become incapacitated. If the proposed ward is mentally competent, by far the best approach is to have him/her sign durable powers of attorney. There are two types of powers.
Durable Power of Attorney for Finance. One type of power of attorney is a durable power of attorney for finance, which designates who can handle the grantor’s financial affairs (such as paying bills) if the grantor becomes incapacitated.
Advance Health Care Directive. The other type is the durable power of attorney for health care. In California, this is now known as an Advance Health Care Directive. This is designed to allow the grantor’s designated agents to make health care decisions if the grantor is incapacitated.
officers. Often the spouse (or partner) is the primary agent, and then adult children or friends are successor agents in the event the primary (or subsequent) agent is unable (due to incapacity, etc.) or unwilling to Act.
medical decisions. Often, if a person is incapacitated, the medical staff will allow family members to make medical decisions if everyone agrees. It is also possible to obtain authorization from the court for specific medical procedures, but if authorization is needed on an ongoing basis, a conservatorship may be more effective.
Representative Beneficiaries. Most government agencies allow another person (a “paid representative”) to receive checks for the payee and spend that money on the payee’s behalf. Each agency has its own application procedures and requirements. Many agencies require the paid representative to provide them with periodic accounts.
community property. If one spouse becomes disabled, the other spouse can usually manage all of the community property they own.
This will not help if action needs to be taken with respect to any separate property owned by the incapacitated spouse.
Also, even with community property, the capable spouse may not be able to roll over Treasury bills, sell stocks, or sell or borrow against real property.
Again, it is possible for the court to authorize the spouse to carry out specific transactions, but it may be easier to obtain a guardianship if continuing authority is needed.
