Texas Bar Exam Essays - Guardianships
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What is a guardian of the person? What is a guardian of the estate?
Guardian of the Person – right to take charge of the ward; duty to provide care, supervision, protection for ward; duty to provide clothing, food, medical care, shelter, and power to consent to medical/physical treatment.
Guardian of the Estate – Right and duty to manage ward’s property, enforce the ward’s obligations and bring or defend suits by or against the ward.
What compensation is a guardian entitled to?
Person – not to exceed 5% of the ward’s gross income
Estate – reasonable compensation, a fee of (i) 5% of ward’s gross income plus (ii) 5% of money paid out of the estate is considered reasonable.
What is a bond requirement?
Person – G should give fiduciary bond as condition of serving, but this may be waived by will.
Estate – G must give bond as condition of serving (cannot be waived).
What happens if neither parent’s will names a guardian for their only child?
If child > 12 y/o, he can choose his own guardian, but court can veto in his best interest.
What is the proper venue for a guardianship hearing?
For minor – court where parents reside.
For incapacitated adult – county where proposed ward resides OR county where principal estate is located.
Guardian names in parent’s will – county where will was probated OR county where appointee resides.
Who has standing to seek an adjudication that someone is incapacitated?
Who is eligible to be appointed as guardian of the person and estate of a minor?
- (1) last surviving parent can name guardian of the child
- (2) it is presumed that person designated by parent is in child’s best interest, but presumption is not conclusive.
- (3) If not designated by parent, then:
- a. Grandparent
- b. Next of kin in nearest degree of kinship
Who is eligible to be appointed as guardian of the person and estate of an incapacitated adult?
- (1) person named by last surviving parent in will or other written declaration
- (2) person named in written, witnessed Designation of Guardian Before Need Arises
- (3) If no such declaration, then:
- a. Spouse
- b. Next of kin in nearest degree of kinship
- c. General test is always Best Interest of Ward
Who is disqualified as being appointed guardian?
- (1) incapacitated person
- (2) conflict of interest, unless (i) court determines no conflict, or (ii) guardian ad litem is appointed to represent proposed ward
- (3) inexperience, lack of education, or other reason makes her incapable of managing
- (4) person expressly disqualified in designation of guardian before need arises
- (5) persons convicted of sexual offense, sexual assault, injury to child or elderly person
What must the order appointing a guardian include?
- (1) the powers, duties, and limitations of the guardian and
- (2) the amount of the ward’s funds that can be expended for the ward’s care without court approval
What safeguards are imposed to insure that the proposed ward’s rights are fully protected?
- (1) court must appoint an attorney ad litem to represent the proposed ward (unless she gets her own)
- (2) must appoint a guardian ad litem on behalf of the proposed ward
- (3) must appoint court investigator (determines less restrictive alternative)
- (4) proposed ward must be present at trial (unless mentally retarded adult)
- (5) proposed ward can request a jury trial (if made then jury mandatory)
- (6) CCE evidentiary standard for finding of incapcitation
What are letters of guardianship?
Letters showing guardians authority. Valid for 16 months. Public policy of annual review.
What must a guardian do within 60 days of appointment?
- (1) qualify by taking oath and posting fiduciary bond w/in 20 days (unless waived for guardian of person only)
- (2) publish notice of administration in newspaper of general circulation w/in 1 month
- (3) file inventory of estate w/in 30 days
- (4) file application for monthly allowance to be expended on ward’s behalf w/in 30 days
How can a guardian be removed ex parte? What burden is required?
- (1) fails to qualify by giving oath and bond w/in 20 days
- (2) fails to file inventory w/in 30 days
- (3) moves from TX, is absent from state for more than 3 months, cannot be served with notices or other processes because whereabouts are unknown or is evading service
- (4) has neglected or cruelly treated the ward or has failed to maintain or educate the ward or has misapplied or embezzled assets or has removed assets from TX
Clear and convincing evidence is required.
How can a guardian be removed after notice or hearing?
- (1) grounds to believe (but not CCE) that she has neglected or 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
- (2) if she is guilty of gross misconduct or mismanagement
- (3) is she fails to comply with a court order or fails to file accountings/report which are required annually
- (4) if she becomes incapacitated, is sentenced to the penitentiary, or for some other reason is incapable of properly performing the duties of guardian.
What can guardians do without court approval?
- (1) retain property received at inception of the guardianship or thereafter acquired by gift, will, inheritance, with no duty to diversity, and with no liability for any resulting depreciation or loss for a period of 1 year
- (2) can make investments in assets on the statutorily approved legal list or investments that are consistent with an investment plan approved by the court
- (3) when obtaining prior court approval is not convenience or possible, may expend amounts in excess of monthly allowance fixed by court, if there is CCE that expenditures were reasonable and proper
- (4) can insure property, pay taxes, court costs, bond premiums, release lien on payment of debt, vote stocks, pay calls and assessments on investments.
When can guardian sale real or personal property?
- (1) to pay claims and expenses
- (2) maintenance of the ward
- (3) unproductive property
What is a Court-Created Management Trust
Guardian of estate can petition for court-created management trust for incapacitated adult (or for a person with only a physical disability) 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, application for court-created trust could be made by attorney ad litem, guardian ad litem, or other person interested in incapacitated person’s welfare.
If over $150K involved, bank or trust company must be appointed trustee; trust can be drafted to continue until 25.
Cannot include exculpatory clause; relieving trustee from liability for ordinary negligence, unless court finds it’s in the ward’s best interest.
What is a temporary guardian and when may they be appointed?
May be appointed where there is substantial evidence that a person or his estate requires immediate appointment of a guardian; limited to powers granted by court; cannot remain in effect for more than 60 days.
Can ward’s make gifts?
Court can authorize gifts to enable ward to qualify for tax purposes at a $13,000 annual exclusion per done, and the court can also authorize gifts to enable to ward to wualify for governmental benefits.
The court can approve a charitable gift out of income if (i) the gift will qualify for an income tax charitable deduction; (ii) net income from the ward’s estate will probable exceed $25K; and (iii) the gift will probably not exceed 20% of the ward’s income for next year.
What is a Guardian to Receive Funds from Governmental Source?
Guardian of person can be appointed as Guardian to Receive Funds from Governmental Source and can expend payments on behalf of the ward with court approval, if the disability pension is less than $12K per year.
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