Background

Definition. Guardianship is used in California when a person is unable to handle their own financial affairs or physically care for themselves, so the Court appoints someone else to handle these matters.

Since 1981, in California, guardianship can only be obtained for someone under the age of 18. However, other states use the term “guardianship” for what California now calls guardianship.

Terminology. Guardianship must be established by a court. The person who needs the help is called the “ward” and the person who receives the authority to handle financial, medical and / or other matters for the person who needs the help is the “conservator.”

Types of curatorships. There are two basic types of guardianship, guardianship of the person and guardianship of the estate. Often times, a curator does both, but it doesn’t have to.

Conservator of the Person. A guardian of the person ensures that the ward has adequate food, clothing, shelter, medical care, social contact, and sources of enjoyment.

Conservator of the estate. A conservator of the estate takes care of the ward’s finances.

A conservator of the estate must use the conservatee’s money and other assets to support (and educate, if applicable) the conservatee and any dependents he or she has.

If the proper court order is obtained, the conservator can handle not only the conservatee’s personal finances but also his business affairs.

The process

Start the process. Guardianship begins by filing documents in Probate Court and providing copies to the proposed ward and his or her close relative.

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. However, sometimes a guardianship is unavoidable.

Short researcher. A court investigator should speak with 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 whether to appoint a conservator and, if so, who it will be.

Unless the proposed ward cannot attend for medical reasons, the proposed ward must be present at the hearing, as the judge will often want to question him.

Be aware that someone else, usually a family member, may object to the procedure or propose a different conservator.

Inventory and Appraisal. Within 90 days of the date the judge signs the order appointing the probate conservator, the conservator must file a report with the court listing the property the ward owns.

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 non-cash items, complete the Inventory and Appraisal by inserting the value of those items, and return it to the curator, who must present it to the Court. The probate arbitrator typically takes four to six weeks to return the form.

The estate is charged a fee for 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.

Brief investigations. Once guardianship is established, the Court conducts periodic investigations to confirm that guardianship is still necessary and that the ward is being treated appropriately.

Bonds and periodic accounting. If the conservator is handling the conservatee’s finances (which is generally the case), the conservator must post a bond and must periodically provide itemized accounts to the Court that list all income and expenses.

Amount of the deposit. The amount of the bond depends on the ward’s assets and annual income, as well as whether a professional bonding company (in front of family members or friends) is providing the bond.

Binding companies. Please note that most surety companies will not post a bond unless an attorney is in charge of the guardianship proceedings.

Status reports on the person in custody. Often times, the conservator must also prepare periodic status reports that indicate how the conservatee is doing and what the conservator is doing regarding his or her duties.

Cost. Generally, the cost of guardianship comes from the ward’s income or other assets.

Guardian Fees and Refunds.

Expenses. Generally, the conservator is entitled to reimbursement for reasonable expenses incurred on behalf of the conservatee, including expenses to set up the conservatorship and sometimes money spent supporting the conservatee prior to the conservatorship.

With the exception of court filing fees and bond premiums, the conservator must obtain court approval before receiving refunds from the conservatee’s estate.

It is essential that the conservator keep receipts and records of all expenses (and reimbursements).

The conservator may hire help as needed, for example, an accountant, as long as the expense is reasonable compared to the size of the ward’s estate.

Generally, the conservator cannot be reimbursed for postage, photocopies, mileage, or the cost of trips to court.

Time compensation.

It is essential that a conservator wishing to be compensated for his time keep a detailed written record of the time spent in conservatorship, indicating the date, the amount of time, and the work performed, entry by entry.

Courts generally allow a family member to recover only for the time spent managing the estate’s finances, and not for the time spent acting as a family member (such as visiting the ward) or guardian of the person.

The courts may not allow time compensation if little time has been spent on financial matters or if the conservator has not followed court procedures, including the timely filing of accounts.

Some courts have programs that establish the compensation a conservator can receive for his or her time, often a percentage of the conservatee’s estate.

The conservator can only ask the Court for compensation for the time after the latter of the two occurs:

90 days after the issuance of the Letters of Guardianship; and when the Inventory and Appraisal is filed.

Alternatives

Powers of attorney. Unfortunately, the process of obtaining and maintaining a conservatorship is expensive, so we strongly encourage individuals who sign powers of attorney to designate who will handle their affairs if they become incapacitated. If the proposed ward is mentally competent, by far the best approach is for him to sign durable powers of attorney. There are two types of powers of attorney.

Durable Power of Attorney for Finances. One type of power of attorney is a durable power of attorney for finances, which designates people 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 a durable power of attorney for health care. In California, this is now known as an Advance Health Care Directive. This is designed to allow grantor-appointed agents to make health care decisions if the grantor is incapacitated.

Agents. Often times, the spouse (or partner) is the lead agent, and then adult children or friends are the successor agents in case the lead (or subsequent) agent is unable (due to disability, etc.) or not want to act.

Medical decisions. Often times, if a person is incapacitated, medical staff will allow family members to make medical decisions if everyone agrees. It is also possible to obtain judicial authorization for specific medical procedures, but if authority is needed on an ongoing basis, a conservatorship may be more effective.

Representative beneficiaries. Most government agencies allow someone else (a “representative payee”) 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 representative payee to provide them with recurring accounts.

community property. If one of the spouses is disabled, the other spouse can usually manage all the community property that he owns.

This will not help if action needs to be taken regarding any separate property held by the disabled spouse.

Also, even with community property, the able-bodied spouse may not be able to refinance treasury bills, sell stocks, or sell or borrow against real property.

Again, the court may authorize the spouse to conduct specific transactions, but it may be easier to obtain a guardianship if permanent authority is needed.