COVID-19 Highlights Importance of Understanding the Guardianship Process

COVID-19, unfortunately, is now among the examples of causes for the need to appoint a guardian...

It is always advisable for individuals to express their own wishes regarding whom they want to manage their affairs if they become unable, which is traditionally done through a power of attorney. However, situations may arise when someone needs to be appointed after a person unexpectedly becomes incapacitated. COVID-19, unfortunately, is now among the examples of causes for the need to appoint a guardian. Such need may also occur following strokes, traumatic brain injuries, or quickly advancing diseases/mental illness.

When an individual can no longer manage his or her own affairs as a result of a mental or physical disability, the court may appoint a guardian to make personal and/or financial decisions on the individual’s behalf. The legal process can be complicated, and family members should understand what to expect.

Guardianship Basics

A guardianship is a legal arrangement under which one person (the “guardian”) is appointed by the court to care for another person (the “protected person”). The protected person may be an incapacitated adult who cannot make decisions about his or her personal affairs without assistance. Guardianships may take several forms:

• General guardianship: The guardian is given broad authority to manage all of the protected person’s affairs, including the ability to make legal, medical and financial decisions.
• Limited guardianship: The powers of the guardian are restricted to one area of the protected person’s life, such as healthcare decisions or legal affairs.
• Temporary guardianship: The legal arrangement lasts for a fixed period of time. 
• Joint guardianship: Two or more people share the decision-making authority over a protected person’s affairs.

Guardian of the Person vs. Guardian of the Estate

Under New Jersey law, guardianships are further divided into guardianships over the person and guardianships over the estate. Of course, in many cases, one person may hold both roles.

A guardian of the person is an individual appointed by the court to handle the personal affairs of another person who has been legally declared incapacitated. Unlike a guardian of the estate, a guardian of the person doesn’t manage the financial affairs of the incapacitated person, except that a guardian of the person may serve as representative payee for Social Security benefits.

A guardian of the estate is appointed by the court to handle the financial affairs of another person who has been legally declared incapacitated. Unlike a guardian of the person, a guardian of the estate is not responsible for decisions regarding the personal well-being of the protected person. Instead, the guardian of the estate handles assets, income, expenses and liabilities.

If an incapacitated person has an estate, such as income from earnings or pension, real property, stocks and bonds, then a guardian should be appointed to take control of these assets and manage the estate. However, in the absence of an estate, it is likely unnecessary.

The court also has the ability to appoint a guardian ad litem, a person who is appointed to represent an incapacitated person’s interest in a lawsuit. That may occur, for example, if the person became incapacitated as a result of an accident for which legal redress is sought.

Obtaining a Guardianship

Any family member or other interested individual may petition for the appointment of a guardian for a protected person and/or his estate. In order to establish a guardianship over an incapacitated person in New Jersey, two physicians must certify that the individual is unable to make decisions, and the petitioner must demonstrate that the protected person’s needs cannot be met by less restrictive means. 

In a guardianship over the estate, the court will focus not only on the incapacity or age of the protected person, but also whether the assets are in danger of being depleted or wasted without proper management. During any of these legal proceedings, the court may also appoint an attorney to meet with the protected person and investigate the need for a guardianship.

Once a guardianship is granted, the proposed guardian must execute qualification forms before the county surrogate and participate in a course required by statute, instructing the guardian in the performance of his or her duties. Thereafter, letters of guardianship will be issued to the guardian. Going forward, the court will supervise the care of the protected person. For instance, guardians must file an annual report with the court, which details the ward’s personal well-being and provides an accounting of all assets under the guardian’s control.

Duties of a Guardian

Once appointed, a guardian must make personal and/or financial decisions on behalf of the protected person. In doing so, New Jersey law instructs that guardians should first attempt to apply substituted judgment, in order to achieve the known and reasonable preferences of the protected person. The term “substituted judgment” means making a decision based upon what you believe that the protected person would do if he or she had the capacity to make the decision. If the incapacitated person’s wishes are unknown, or if fulfilling them would be dangerous or impractical, then the guardian must instead make decisions based on what the guardian believes to be in the best interest of the protected person.

In a guardianship over an incapacitated person, the guardian’s primary duty is to provide for the protected person’s care and comfort, including food, shelter, healthcare and social needs. Below are some of the most important obligations:

• Advocate for the independence of the incapacitated person.
• Discuss decisions with the protected person, and consider the protected person’s input and preferences.
• If the incapacitated person’s preferences are unknown or potentially harmful, make decisions based on the protected person’s best interest.
• Arrange services for the incapacitated person’s health, education, and welfare.
• Make medical decisions for the protected person, considering the following: conditions that make treatment necessary; incapacitated person’s preference; risks and benefits of all alternatives; time considerations for taking action; less restrictive alternatives; and additional opinions, if helpful.
• Visit with the incapacitated person frequently—at least once every three months.
• Provide for appropriate activities and social opportunities for the protected person.
• File periodic reports as to the well-being of the incapacitated person, if required.

The primary obligation of a guardian of the estate is to gather together and protect the assets of the guardianship estate. Below are several key obligations:

• Open a separate guardianship bank account.
• Obtain a tax identification number for the guardianship bank account.
• Retitle assets and accounts in the name of the guardianship.
• Maintain records of guardianship account transactions.
• Investigate and inventory the incapacitated person’s assets and liabilities.
• If required by the Judgment, file an initial inventory with the court and send copies to interested parties.
• Keep original papers (insurance policies, deeds) in a safe and secure location.
• File periodic reports as to the estate of the protected person, if required.
• Discuss decisions with the protected person, and consider the input and preferences of the protected person.
• If the incapacitated person’s preferences are unknown or potentially harmful, make decisions based on the best interest of the protected person.
• If a surety bond is required, continue to pay premiums to maintain the bond.

Legal Guidance for Guardians

While friends and family members may be eager to help and protect a loved one who has become incapacitated, it is also important to understand that it can be a challenging legal process to navigate. Once appointed, guardians must also be sure to satisfy all of their legal obligations, particularly when finances are involved. For guidance, we strongly suggest working with experienced legal counsel.

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Joel N. Kreizman, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.