What are the types of Guardianship?

My previous blog post discussed guardianship very broadly.  Guardianship is a legal relationship where an individual (the “Guardian”) is appointed by the Clerk of the Superior Court to act on behalf of another individual (the “Ward”) who has been legally declared incompetent. In North Carolina, there are three different types of adult guardianships, including:

• Guardian of the Person – this type of Guardian makes personal decisions for the Ward such as where he or she will live or what doctors will treat the Ward. A Guardian of the Person does not control the Ward’s money or assets.
• Guardian of the Estate – this type of Guardian makes financial decisions for the Ward and controls the Ward’s money and assets. For example, a Guardian of the Estate would decide what bills to pay for the Ward and what assets to retain or sell. A Guardian of the Estate does not make personal decisions for the Ward.
• General Guardian – this type of Guardian makes both personal and financial decisions for the Ward.

Guardianship of the Estate and General Guardians

Guardians of the Estate and General Guardians have the following responsibilities:

• Organizing, gathering and protecting assets
• Arranging appraisals of property when needed
• Safeguarding property and assets from loss, whenever possible
• Managing income from assets
• Making appropriate payments
• Obtaining court approval prior to any sale of major assets
• Reporting to the court the estate’s status on a regular basis

Accounting Requirements and Posting Bond

Courts hold Guardians accountable to report about how money is invested and spent, and Guardians are personally liable for their actions.

A Guardian of the Estate (and a General Guardian) must post a surety bond in order to protect the Ward’s assets from mismanagement or fraud.  This bond acts like an insurance policy, and the Guardian will have to pay a premium with the insurance company providing the bond on the amount necessary to offer sufficient protection.  The amount is based on the value of the Ward’s personal property and is set by state law.

Additionally, a Guardian of the Estate (and a General Guardian) must file an initial inventory of the Ward’s assets within 90 days of qualification and annual accountings with the Clerk’s office.  These annual accountings are audited and must be approved by the Clerk of Superior Court.  The Guardian must file proof of assets held, income received, and amounts disbursed.  This continues every year for the rest of the Ward’s lifetime, until the Ward dies or the guardianship is otherwise terminated.

We work diligently with our clients every step of the way from obtaining the necessary bond paperwork to filing yearly accountings with the Clerk.