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Managing
the Guardianship
Guardian of the Estate: General Duties and Limits
Adapted with permission from Washington Guardianship
http://www.wa-guardianship.com
a
service of the Law Office of
Richard Wills
Opening a Checking Account for the Guardianship & Retitling All of Its Securities
Investing in Private Securities
Prosecuting or Defending a Lawsuit
Compromising or Settling a Claim
Performing the Incapacitated Person's Contracts
Using Minor's Funds for Minor's Support
Obtaining Incapacitated Person's Will
The duties of a Guardian of the Estate are to:
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Protect and preserve the guardianship estate,
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Recover assets of the Incapacitated Person in the possession of another,
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Make disbursements on behalf of the Incapacitated Person,
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Pay the just claims made against the estate,
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Invest and reinvest the estate's assets,
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Account for it faithfully, and
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At the termination of the guardianship, deliver the assets of the Incapacitated Person to those persons who are entitled them. RCW 11.92.040(4)
1. Opening a Checking Account for the Guardianship & Retitling All of Its Securities ñ
In order to "protect and preserve the guardianship estate," a Guardian of the Estate should segregate all assets of the guardianship estate and avoid their commingling, for example, with his/her own personal assets. Consequently, soon after receiving your Letters and once you have a good idea of the liquid assets in the guardianship and that all direct deposit transactions have been accounted for, you should:
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Close all cash accounts in the Incapacitated Person's name,
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Open a checking account in your name as Guardian,
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Transfer sufficient funds into the checking account to pay for the anticipated debts and expenses of the guardianship, and if significant funds remain,
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Open a savings or money market account,
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Deposit the remaining funds in the latter account; and
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Re-title all securities accounts from the Incapacitated Person's name into your name as Guardian.
Each institution seems to have its own preference for the form of holding title. For example, if the Incapacitated Person is Robert Washington and his Guardian is Martha Washington, two popular variations are as follows:
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Martha Washington, as Guardian of the Estate of Robert Washington, an Incapacitated Person; and
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Guardianship of Robert Washington, Martha Washington, Guardian of the Estate.
You will need to check with each institution as to its preference.
You should make all payments on behalf of the guardianship by check from the guardianship's checking account and make sure that you keep an adequate record of the checks that you have written, most easily done by saving the monthly statements from the checking institution so long as those statements show not only the check number and amount of the check but also its payee.
Chances are that you have advanced funds on behalf of the guardianship, such as the $110 Court filing fee. An appropriate first check on the guardianship's new checking account would be to reimburse yourself for those funds advanced upon your delivery to yourself of the receipts for those advancements.
*****
Now, let's shift from duties to limits. The freedom of a Guardian of the Estate to take actions on behalf of his/her guardianship is much more limited than that of a Personal Representative who has been granted Nonintervention Powers on behalf of his/her probate estate; furthermore, Intervention Powers are unavailable to a Guardian. And while a Guardian of the Estate generally has the authority to carry out these duties as he/she sees fit, many potential actions taken by a Guardian of the Estate require prior Court approval; for example:
2. Transferring the Guardianship ñ
a. To Another County within Washington ñ
Only by a Court Order may a guardianship may be transferred to any other county within Washington. The procedure for doing so is for:
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Either the Guardian or the Incapacitated Person,
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To petition the Court,
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In the county where either the Guardian or Incapacitated Person resides,
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Send Notice of Hearing to such persons as the Court requires, and
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Attend the hearing and obtain the required Court Order. RCW 11.88.130
Only by Court Order may property of a Washington guardianship be transferred to the Guardian of the Estate of the Incapacitated Person appointed in another jurisdiction and only if such transfer "would be in the best interests of the Incapacitated Person." RCW 11.92.170
3. Investing in Private Securities ñ
Only by Court Order may a Guardian obtain the authority generally held by private Trustees, such as investing in corporate stocks and bonds, described in RCW 11.98.070 and then only for the duration of his/her account period. RCW 11.92.040(4) Without obtaining further powers from the Court, a Guardian of the Estate may invest guardianship assets only in:
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Washington or federal notes or bonds,
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Federally guaranteed notes or bonds, or
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Share accounts or deposits insured by a federal agency. RCW 11.92.040(5)
4. Gifting Guardianship Property ñ
Only by Court Order may a Guardian of an Incapacitated Person other than a minor take any action or apply guardianship funds not required for the Incapacitated Person's maintenance and support to:
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Provide for gifts to those persons whom the Incapacitated Person would like to benefit, or
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Qualify for entitlement under medical or other assistance programs. RCW 11.92.140
Furthermore, such action must be consistent with the Incapacitated Person's known desires and designed to minimize income or estate taxes. See: Seattle-First National Bank v. Brommers, 89 Wn.2d 190, (1977) and Youngkin, 48 Wn.2d 425 (1956) (spouse/guardian prohibited from gifting community property assets of guardianship to children of ? by prior marriage).
5. Selling Guardianship Property ñ
Only by Court Order may a Guardian sell, exchange, lease, mortgage, or ... guardianship property. RCW 11.92.090 RCW 11.92.100 provides the required contents of a Petition for Sale (or ...) of Guardianship Property, and RCW 11.92.110 and 11.92.115 provide the procedure for the sale, and confirmation of sale, of guardianship real property, respectively.
6. Prosecuting or Defending a Lawsuit ñ
All legal actions by or against the Incapacitated Person regarding his/her property are required to be prosecuted or defended by his/her Guardian. Only by Court Order may a Guardian initiate prosecution of such an action (including for marital dissolution, ie, divorce (Marriage of Gannon, 104 Wn.2d 121 (1985))). If any action is brought against a Guardian, he/she is required to report that to the Court. RCW 11.92.060(1)
7. Compromising or Settling a Claim ñ
Only by Court Order may a Guardian compromise or settle any guardianship claim. RCW 11.92.060(4)
8. Performing the Incapacitated Person's Contracts ñ
If the Incapacitated Person is bound under a written contract upon the creation of the guardianship, then only by Court Order may the Guardian perform the contract. RCW 11.92.130
9. Using Minor's Funds for Minor's Support ñ
The general rule is that parents are obligated to support their children, and consequently a minor's funds cannot be used for his/her support unless the parents can show that they are unable to adequately support the minor. Guardianship of Ivarsson, 60 Wn.2d 733 (1962). But see: Guardianship of Rudonick, 76 Wn.2d 117 (1969), where the Court said "We cannot place our blanket disapproval upon expenditures of a ward's funds for the support of the whole family rather than just the ward personally." At page 126.
10. Obtaining Incapacitated Person's Will ñ
A Guardian cannot compel the production of the Will of the Incapacitated Person's before his/her death. Guardianship of York, 44 Wn. App. 547 (1986).
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