Perhaps you have been appointed to serve as the Guardian of a person’s estate. This post will answer some common questions about performing your fiduciary duty. (Keep in mind that you can be appointed over the estate, the person, or both). First of all, what is a Guardian? A Guardian is a fiduciary who is appointed by the Court to be responsible for the income and assets, called the “estate,” of another person. The estate includes all accounts, policies, tangible personal property, and real estate that the protected person has an ownership interest in. However, if the protected person has an interest in a Trust, this is not part of the guardianship estate and must be kept separate. Your property is not part of the guardianship estate either and must not be commingled with the guardianship accounts. Your duties as guardian are to handle the guardianship estate in the protected person’s best interests. You are to pay his/her bills from the guardianship account and keep the account balanced. You must keep a record of all account statements, receipts, invoices, and source of all deposits in the guardianship estate check register. You should keep all the protected person’s real estate and personal property insured, paying the premiums from the guardianship estate. You are responsible for the protected person’s income tax returns each year. You can hire and pay an accountant from the guardianship account for the tax preparation.
Now that the protected person has been determined incapacitated by the Court, he/she must no longer conduct any financial transactions or dispose of property. Only you as the Guardian can do this. You should open a new checking account in the name of the guardianship as soon as possible. The account should use the protected person’s social security number and must not be jointly titled with anyone or have any beneficiaries. No one but you should write checks or make withdrawals from the account. All the protected person’s income should be deposited to the guardianship account. You should change all direct deposits (such as Social Security and pension) and automatic withdrawals (such as utility bills) to the new checking account. Then, you can close the protected person’s existing checking account and transfer the balance to the new guardianship account. If you feel the protected person can responsibly handle a small amount of cash for spending money, you can give that money to the protected person. It is best to buy things for the protected person using a check or debit card from the guardianship account. If you buy something for the protected person with your own money, you can reimburse yourself from the guardianship account.
In order to prove that you are guardian, show the Court Order and Letters of Guardianship. Your Letters are certified so make sure you keep the original. When you are appointed as guardian, you should notify all of the protected person’s banks, brokerage companies, retirement plans, insurance companies, and other financial institutions about the guardianship. You should also notify the credit bureaus and put a credit freeze on his/her credit files. Indiana law requires that a bond be posted with the Court when all guardians are appointed. The bond is necessary because it is like an insurance policy that protects the guardianship estate. The annual premium for the bond is paid from the guardianship checking account.
An Inventory and Accounting must be filed with the Court. An Inventory lists all of the guardianship assets and their values as of the date of your appointment. This must be filed with the Court within 90 days of your appointment. An Accounting shows all receipts, income, deposits, changes in value, sales, and distributions within the guardianship estate. The first Accounting is due on the one year anniversary of your appointment as guardian. The following Accountings are due every two years. A final Accounting must be filed when the guardianship ends. If you choose to sell any major guardianship assets, you must first get a Court order. Also, you cannot engage in transactions between yourself and the guardianship estate without a Court Order. For example, you cannot purchase property from the guardianship estate without a Court Order. This also applies to your spouse, attorney-in-fact, or an organization in which you have a substantial beneficial interest (such as a trust or corporation).
You are entitled to a reasonable fee for serving as guardian. You must keep track of all the time you spend serving as guardian. You cannot pay yourself a fee without a Court Order approving the fee. You cannot make gifts to individuals or charities from the guardianship estate without approval from the Court. You cannot sell or give away any property that is specifically devised in the protected person’s Will or Trust. Learn more about the basics of guardianship in Indiana. If you have any further questions about serving as guardian, please consult with the attorneys of Troyer & Good, PC.