If your loved one is struggling to manage his or her finances or personal affairs, you may wonder what you can do to help. When an individual has the capacity to delegate decision-making authority to a trusted family member or friend, your loved one can gain the much-needed support to make sound, legally-binding decisions. 

But what if your loved one is incompetent and therefore, unable to establish this relationship? In these circumstances, guardianship may be the best option to ensure your loved one, and his or her estate, are appropriately managed.

What is Guardianship?

In a guardianship, a court appoints a person or agency to serve as either the guardian of a person, of his estate, or both. This forms a fiduciary relationship in which the guardian is given the authority to make legally-binding decisions and act on behalf of the ward, the individual who cannot manage his or her personal affairs or property. 

A guardianship appointment is a serious responsibility. The guardian must balance the ward’s best interests with his or her involvement in any decisions or actions. While the guardian is expected to serve as a surrogate decision-maker and advocate for the ward, that does not mean the ward has no say in the matter. 

Rather, the guardian must consult with the ward, allowing him or her to participate in the decisions that affect him or her. Despite the court’s adjudication of the ward’s incompetence warranting the establishment of the guardianship, the ward may maintain some level of comprehension and judgment and should be allowed to use these skills in making decisions, with the guidance and supervision of the guardian. Ultimately, the guardian will be the final decision-maker, but the ward must be involved when possible and appropriate.

Guardianships are very restrictive and should only be implemented as a last resort when there are no less restrictive alternatives available. Unlike other estate planning documents such as powers of attorney, the court decides who is responsible for managing a person’s affairs, finances, and property. 

Therefore, when there is an alternative option for guardianship that allows an individual to decide who will assist him or her with managing the estate, guardianship is arguably not the best option.

The Role of the Guardian

The role of a guardian depends on the nature of the guardianship. Typically, a guardian is granted broad responsibilities for the care, custody, and maintenance of the ward, though the court may limit these duties through a limited guardianship. Generally, the guardian is responsible for ensuring that the ward’s everyday needs including housing, maintaining personal property, and having access to education, employment, and rehabilitation when appropriate. 

Healthcare decisions are usually managed through a power of attorney but absent a previously executed health care power of attorney, the guardian may also have the authority to consent to medical or psychological treatment on behalf of the ward.

Guardian of the Person and Guardian of the Estate

A guardian can be appointed for the person, for the estate, or both (also known as a “general” guardianship). When the guardianship is of the person, the guardian is responsible for managing the ward’s personal and medical decisions. A guardian of the estate is limited to financial and legal decisions on behalf of the ward. 

Guardian of the Person: Responsibilities

Guardians of the person are required to file status reports with the court. This report must include a summary of the ward’s recent medical or dental examinations or procedures, as well as:

• reports on the guardian’s performance; 
• the ward’s residence, education, employment, and rehabilitation or habilitation; 
• the guardian’s efforts to restore competency; and 
• the guardian’s efforts to seek alternatives to guardianship. 

The report should also mention efforts to identify alternative guardians if the current guardian is a disinterested party and the guardian’s recommendations for implementing a more limited guardianship.

Guardian of the Estate and General Guardian: Responsibilities

For a guardian of the estate or a general guardian, an inventory of the ward’s assets must also be filed within three months after the guardianship is established. An annual account of the ward’s property including status and money received and paid must be filed as well. A general guardian has the reporting duties and accounting requirements of both a guardian of the person and a guardian of the estate. 

Just as North Carolina favors using less restrictive alternatives to guardianship when possible, guardianships should also be limited to serving the specific needs of the ward and therefore, as least restrictive as possible. A general guardian should only be created when the ward is incapable of managing both his or her estate and personal affairs. 

When is Guardianship Appropriate?

For the court to grant a petition for guardianship, a person must be adjudicated as incompetent. There must be clear, cogent, and convincing evidence that the individual cannot manage personal affairs or make or communicate important decisions. Illness, disability, disease, injury, or senility are common causes for diminished capacity which may warrant a guardianship.

Sometimes, guardianship is necessary for children. For parents of special needs children, a guardianship must be established to allow the parents to legally continue parental decision making beyond the child’s eighteenth birthday. Guardianship over a minor child may also be appropriate when the child’s parents are unable to care for the child. In these circumstances, parental rights do not have to be terminated, so children may still be able to have a relationship with their natural parents, but the decision-making authority needed to act as the minor’s parent is trusted in someone else. 

How is A Guardianship Created?

Any can petition the Clerk of Superior Court for guardianship. The petitioner must file a “Petition for Adjudication of Incompetence and Application for Appointment of Guardian,” as well as a capacity questionnaire. The potential ward is entitled to a jury proceeding, but most guardianship proceedings are adjudicated by the Clerk of Court. The potential ward can hire an attorney to represent him or the court will select a guardian ad litem (GAL) to ensure the ward’s interests are protected.

In the hearing, the Clerk will rule on the competency or incompetency of the potential ward. If the potential ward is adjudicated as incompetent after medical evidence and witness testimony is presented, then the clerk will consider the petitioner’s application for guardianship. The Clerk will evaluate the credentials, intentions, and capabilities of the petitioner before granting the request. 

For more information about guardianships, visit the North Carolina Judicial Branch website, or contact one of our experienced attorneys.