Guardianship Fiduciary Duties

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What Does a Guardian Do?

A guardian is a person who is entrusted with the legal care and oversight of another person, also called the ward.  The guardian is usually appointed by the state, though they can also be appointed by the ward’s parents in some cases.  The ward is usually a minor who needs legal guidance or an adult who cannot make legal decisions on their own.

There are two types of guardians.  First, guardians of the person are entrusted with the care of the actual ward, much in the same way that an adoptive parent is responsible for a child.  Secondly, “guardians of the estate” are entrusted with the overseeing of a person’s estate, meaning the totality of the property, money, and assets that they own.  In both cases, the guardian owes a fiduciary duty to the ward. 

What are Some Basic Guardianship Fiduciary Duties?

All guardians owe a basic “fiduciary duty” to the ward.  This means that they are required by law to act in a manner that is honest and responsible when managing the ward’s financial affairs.  When making financial decisions on the ward’s behalf, the guardian must act in good faith and exercise sound judgment, especially when making decisions such as whether to invest in a certain asset.

A basic rule in most jurisdictions is that the guardian should exercise the same care and level of judgment with the ward’s estate as they would with their own funds.  This also implies that the guardian will keep the ward’s funds separate from their own personal accounts. 

Thus, a guardian can sometimes be held legally responsible for the ward’s own losses, if the loss was the direct result of the guardian’s breach of their duties.  For these reasons, it’s usually advisable for a guardian to consult with an accounting or legal professional before making major decisions on behalf of the ward or their estate.

Is a Guardian Responsible for the Ward’s Debts?

Generally speaking, the guardian is never responsible or personally liable for any debts or legal obligations that were incurred solely by the ward.  The guardian should manage the ward’s finances so that their debts are addressed in a timely manner; however the guardian usually doesn’t need to pay for these out of their own pocket, but rather using the ward’s own funds. 

On the other hand, the guardian may be liable for debts associated with the ward, for example if they arose according to a contract or other type of arrangement (for example, if this is addressed in a guardianship agreement).  And as mentioned, the guardian will be responsible for the ward’s debt that results as a consequence of the guardian’s mismanagement of funds. 

Can a Guardian Receive Child Support Payments?

In some cases, guardians can receive child support payments from the ward’s non-custodial biological parent.  However, this may depend on several factors. 

For example, it may happen that the ward’s parents have not completely forfeited their parental rights; the guardian may only be acting in a very limited capacity and for a specific purpose.  The child support order may specifically list the biological parent for the support, rather than the guardian.  In any event, if the guardian is receiving child support payments for the ward, the funds need to be dedicated to the ward and not for personal use. 

Do I Need a Lawyer for Help With Guardianship Fiduciary Duties?

Guardianship is a major undertaking that involves many duties on the guardian’s behalf.  You may need to hire a lawyer for help with guardianship laws.  This is especially true if you need to make any major decisions on behalf of the ward.  Your attorney can provide you with sound legal advice and counseling on the matter, and can represent you in court if you’ve been requested to make an appearance.

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Last Modified: 11-16-2012 02:16 PM PST

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