Has the right to physical possession of the ward; duty of care control and possession; duty to provide clothing, food, medical care and shelter; and power to consent to medical and psychiatric treatment.

Guardian of the Estate

Has the right and duty to manage ward's ppty, enforce the ward's obligations, and bring or defend suits by or against the ward

Rule: Parent (as parent) has NO authority to deal with their child's ppty - they must get appointed guardian of the estate.

Exception: If the value of the child's ENTIRE interest in all of the ppty inherited is less than $100,000, parent (or managing conservator or guardian of person) can obtain a court order authorizing a sale of stock without the appointment of a guardian of the estate - in which case sale proceeds are paid into the court registry and handled by the court

Appointment by surviving parent

Rule: Surviving parent may, by will or written declaration, appoint guardian of the parent's minor child or incapacitated adult child in the event of the parent's subsequent death or incapacity.  The named person must be appointed guardian unless the court finds that she is disqualified, dead, or would not serve in child's best interest.  

Note: For a written declaration - execution requirements are the same as for wills - can be wholly in parent's handwriting and signed by her; if not, must be signed by the parent or on her behalf by another person at the parent's direction and in her presence, and must be witnessesd by 2 witnesses (14 or older).  

The parent CAN waive the fiduciary bond requirement in the will for someone serving as the guardian of the PERSON

The parent can NOT waive the fiduciary bond requirement in the will for someone serving as guardian of the ESTATE

Appointment - Neither parent named a guardian

Children age 12 or older can choose guardian in a writing filed with the court unless the court vetoes as not in the child's best interest

Venue for appointment for guardian of minor

County where parents (or parent who is managing conservator) reside

Venue for guardian of incapacitated adult

County where proposed ward resides OR county where principal estate is located

Venue for appointment of guardian named in parent's will

County where will was probated OR county where appointee resides

Standing to file a will contest

The person must have an economic interest adversely affected by will's admission to probate

Standing to commence a guardianship proceeding

Any person had standing to commence a guardianship proceeding b/c we want this to be brought to the court's attention.  If the person does bring a proceeding but is unsuccessful - they are entitled to recover attorney fees from the proposed ward's estate IF they acted in good faith

Who is eligible to be appointed guardian of the person and estate of a minor?

Parents or surviving parent.  But remember the last surviving parent can name guardian of child.  It is presumed that person designated by parent is in child's best interest, but presumption is NOT conclusive.  

Who is eligible to be appointed guardian of the person and estate of an incapacitated adult?

• Person named by last surviving parent in will or other written declaration
• Person named in write, witnessed Designation of Guardian Before Need Arises.  Designation is PF evidence that named person will serve the proposed ward's best interest, but court may decline to appoint the person if she is asserting a claim against the proposed ward's estate
• If no such declaration: (1) spouse; (2) next of kin in nearest degree of kinship

Note: 2 persons can NOT be appointed co-guardians except for husband/wife

Who is disqualified from being appointed guardian?

• Conflict of interest (owes $ to ward or asserting claim against proposed ward) unless (i) court determines no conflict or (ii) guardian ad litem is appointed to represent proposed ward
• Incapacitated person
• Inexperience, lack of education, or other reason makes her incapable of prudently managing estate
• Person expressly disqualified in designation of guardian before need arises
• Person convicted of sexual offense, sexual assault, injury to child or elderly person

Limited guardianship for incapacitated adults

Probate Code urges the court to order limited guardianships so that the ward does not lose ALL legal and civil rights.  

The order appointing a guardian must specify (i) the powers, duties, and limitations of the guardian, and (ii) the amount of the ward's funds that can be expended for the ward's care without court approval. 

If the ward regains some of his cognitive skills, the ward or an interested person can petition to have the guardianship modified or terminated

Safeguards in an incapacity proceeding to insure the ward's rights are protected

Mandatory appointment of attorney ad litem (unless the ward already has an attorney) and court investigator

Discretionary appointment of guardian ad litem and court visitor

The ward must be present at the trial (unless the court determines appearance is not necessary)

The proposed ward can ask for a jury trial (mandatory upon motion)

Evidentiary standard as to whether proposed ward is incapacitated

Clear and convincing evidence (all other finding are by a preponderance of the evidence)

Letters of guardianship

If a guardian is appointed - letters of guardianship are valid for 16 months b/c we want to have annual review of whether guardianship should be modified

What actions MUST the guardian take within 60 days after appointment

• Must qualify by taking oath and posting fiduciary bond within 20 days
• Must publish notice of administration in newspaper of general circulations within 1 month
• Must file inventory of the estate within 30 days
• Must file application of monthly allowance to be expended from income and principal on the ward's behalf, stating separate amounts requested for (i) ward's education and maintenance and (ii) maintenance of wards ppty within 30 days

Requirements for the guardian to be reimbursed for expenditures on the ward in excess of the court approved monthly allowance

• Clear and convincing evidence  
• That the expenditures were rzbl and proper
• NOT possible to get prior court approval

The court may remove a guardian without notice or hearing if the guardian:

• The guardian fails to qualify by giving oath and bond within 20 days or fails to file inventory within 30 days
• Moves from Tx; is absent from the state for more than 3 months; cannot be served with notices or other processes b/c whereabouts are unknown or is evading service; OR
• Has treated the ward cruelly or has failed to maintain or educate the ward or has misapplied or embezzled assets or has removed assets from Texas, if any of these are shown by clear/convincing evidence

The court may remove a guardian but only after notice or hearing

• If there are grounds to believe [but not c/c evidence] that she has cruelly treated the ward, has failed to educate or maintain the ward, or has misapplied or embezzled assets, or has removed assets from the state, or
• If she is guilty of gross misconduct or mismanagement or
• If she fails to comply with a court order or fails to file an accounting, both of which are required
• If she becomes incapacitated, is sentenced to the penitentiary, or for some other reason is incapable of properly performing the duties

Responsibilities of guardian

• The guardian has a duty to invest all funds and assets that are not immediately needed for the ward's education, maintenance, or support
• The guardian must file application for an order either (i) authorizing the guardian to develop and implement an investment plan for estate assets or (ii) modifying or eliminating the duty to invest within 180 days after appointment
• After investment plan has been approved by the court, guardian must manage and invest the estate as a prudent person would in managing his own affairs (governed by the portfolio investment theory)

The ONLY 4 things a guardian can do without court order or approval

• Retain property received at inception of the guardianship or thereafter acquired by gift, will, or inheritance, with no duty to diversify, and with no liability for any resulting depreciation or loss for a period of 1 year 
• May make investment decisions that are consistent with the investment plan approved by the court
• When obtaining court approval is not convenient or possible, may expend amounts in excess of monthly allowance fixed by court, if there is clear and convincing evidence that the expenditures were rzbl and proper
• Can insure ppty; pay taxes, court costs, bond premiums, release lien on pmt of debt; vote stocks (including by proxy), pay calls and assessments on investments

Sale of real or personal ppty of the guardianship estate (which always requires ct approval) can be made ONLY for purpose of:

• Pay claims and expenses
• Ward's maintenance
• Dispose of unproductive property

Compensation of guardian of person

Cannot exceed 5% of ward's gross income (not including SS or veteran's benefits)

Compensation for guardian of estate

Entitled to rzbl compensation - 5% of ward's gross inc + 5% of all $ paid out of the estate is considered rzbl IF the guardian has taken care of and properly managed the ward's estate

If a guardian of estate HAS been appointed

Court created management trust under section 867 of Probate Code [this can be used for an incapacitated adult who inherited substantial estate with trust to continue until

(i) court determines that trust is no longer needed or

(ii) ward is restored to capacity or dies]

If NO guardian of estate has been appointed

Section 142 trust under Trust Code

WHEN A MINOR RECEIVES A LARGE AMOUNT OF MONEY - If over $50,000

Bank must be trustee

Trust can continue till minor reaches 25

Can NOT include an exculpatory clause relieving the trustee from liability for ordinary negligence UNLESS the court finds that b/c of unique circumstances, there is c/c evidence that such a provision is in beneficiary's best interest

GOVERNMENTAL BENEFITS

If an incapacitated adult has such a small estate that no guardianship is necessary but receives a pension from VA which cannot be paid to anyone other than a guardian of the estate --> guardian of person can be appointed Guardian to Receive Funds from Governmental Source and can expend the pension pmt on ward's behalf without court approval if the amt is $12,000/year or less

TEMPORARY GUARDIAN

• May be appointed where there is substantial evidence that a person or his estate requires immediate appointment of a guardian.  
• Powers are limited to those granted by the court
• Cannot remain in effect for more than 60 days

POWER TO MAKE TAX MOTIVATING GIFTS

• The court may authorize the establishment of an estate plan of the purpose of minimizing income, estate, or other taxes if it is shown that the ward will probably remain incapacitated during her lifetime.  
• The guardian of estate can apply for an order that compels one in possession of the ward's will, trust, or other estate planning doc to forward a copy to the court for inspection for the purpose of establishing an estate plan.
• An attorney is authorized to deliver a copy of the will or other document to the court without violating the attorney/client privilege

The court can approve a charitable gift out of income if

• The gift will qualify for an income charitable deduction
• Net income from estate will probably exceed $25,000 and
• The gift will probably not exceed 20% of ward's net income for the year

JURISDICTION OF PROBATE COURT

When H is incapacitated and W (who was guardian) resigns as guardian and files for divorce which raises issues about child custody and child support --> the Probate court is the proper place to raise these issues b/c they are incident to the guardianship estate