Law Offices of
David S. Bouschor II
217 E. Oak Street
Denton, Texas 76201
(877)592-1300 (toll free)
217 E. Oak Street
Denton, Texas 76201
(877)592-1300 (toll free)
This document represents information about your anticipated appointment as Guardian of the person and/or estate. Please retain this document for future reference. This summary is not intended to discuss all matters relating to your appointment as Guardian or to be an exhaustive treatment of guardianship law; it is really just an overview and it will be useful for reference purposes over time. Many of the matters discussed in this document have been discussed briefly with you at various times or you may have read about them in the article on guardianships we previously provided you.
As Guardian of the Person you are responsible for the care, placement, medical, and living arrangements. You should stay in touch with the Ward’s treating physician and supervise the living arrangements. An Annual Report of the Person will be due once a year wherein you will furnish the Court information about the Ward’s abilities and progress. In addition, Section 767 of the Texas Probate Code gives you:
After application, you will be appointed as the permanent Guardian of the estate at a hearing before the Court. You will be required to “qualify” as Guardian of the estate by signing an Oath and posting a bond in an amount equal to the value of the estate within 20 days from your appointment. The date that you “qualify” is important because many of your filing deadlines, for example the time to file your inventory and accountings, are based on a set number of days calculated from this date.
A “guardian of the estate” is the legal representative of a ward’s estate. Generally, a guardian of the estate is entitled to the possession and management of all property belonging to the ward, to collect all debts, rentals, or claims that are due the ward, and to bring and defend suits by or against the ward. Further, it is your duty as Guardian of the Estate to take care of and manage the estate as a prudent person would manage their own property.
Your qualifying also entitles you to receive Letters of Guardianship. The Letters of Guardianship evidence your appointment as permanent Guardian of the Estate and your authority to act for and on behalf of the estate. You will be provided with original Letters for your use. You may need additional Letters at various times in the future. If so, please give us a call and we can usually order and receive them within two days.
There are a number of administrative obligations that must be met by a guardian within the first 30 days of the initiation of a guardianship. The time period for most time-sensative obligations imposed upon a guardian of the estate begin to run from the date of the Guardian’s qualification, rather than from the date of the Order appointing the Guardian of the Estate. The Guardian “qualifies” when the oath has been filed, the bond has been approved by the Court, and Letters of Guardianship have been issued. The date of qualification will determine the due date for many of the Guardian’s administrative obligations.
Immediately after receiving Letters of Guardianship, a Guardian of the estate is expected to collect and take possession of all of the personal property, record books, title papers, and other business papers of the Ward. A Guardian of the Estate is not generally entitled to demand possession of the Ward’s Will. In order to take possession of bank accounts, investment accounts, etc., you will need to provide the financial institutions with your Letters of Guardianship. Each institution has different policies; some will only require a copy of your Letters of Guardianship, others will require the certified Letters of Guardianship.
The Texas Probate Code requires that a monthly allowance be established for every guardianship of the estate. The best approach is to have the monthly allowance established in the Order Appointing Guardian of the Estate. However, that is not always possible as the Guardian sometimes does not know what the Ward’s has in monthly expenditures. Therefore, if no monthly expenditures are set out in the Order Appointing Guardian of the Estate, then the Guardian of the Estate must apply to the Court, within 30 days from the date the Guardian qualifies, for authorization to spend from the estate of the Ward amounts for the maintenance of the Ward and the Ward’s property. Therefore, you need to immediately estimate the amount of funds you will need to take care of the Ward and the Ward’s property on a monthly basis. You will need to provide that figure to me as soon as possible so that an Application can be filed with the Court and a hearing set as soon as possible.
The next order of business with the Probate Court is to prepare an Inventory and List of Claims for the Estate. The inventory must be filed with the Probate Court within thirty days after you qualify, unless the Court grants you an extension. The inventory is a record of all the property of the Estate that has come into your possession or knowledge. At our initial conference you are given an “Information Form for Inventory for Probate Matter” which you need to complete as soon as possible. You need to provide complete information such as bank account numbers, policy numbers, legal descriptions, vehicle identification numbers, etc. You are the only person who has or is able to obtain this information. By not furnishing this information, a delay in completing and filing your inventory will occur. If additional property is discovered after the Inventory is filed, an Amended Inventory can be filed.
We will prepare the inventory for execution by you from the information you provide us and, after it is executed by you, we will file the inventory with the Court and obtain an Order approving it.
Within one month from the date of your qualification, i.e., receiving your Letters, a statutory notice must be published to the general creditors of the estate. This office will prepare and file that notice on the permanent guardianship.
Within four months from the date you receive Letters of Guardianship, you also must give actual notice of the Ward’s incapacity, and your appointment as Guardian, by certified mail to the following:
If you fail to give the required notice, you can be held personally liable for any damages that any person suffers as a result of the failure to receive the notice.
Accordingly, we ask that you provide us with a list of all such creditors that you are aware. Please include in this list the name, address, and general description of the basis of the claim. If the claim is based on an account, such as a credit card, please provide us with the account number so we may reference the account in our notice. The other option is to simply provide us with copies of the most recent statements or notices relating to these potential creditors. These will generally provide us sufficient information to prepare the notices. Note that, potential creditors may include anyone holding a mortgage on any of the real properties, outstanding utility expenses, i.e., water, gas, electric and/or telephone, personal debts (such as credit cards), or any other unpaid bill or claim.
Once we receive the list or other documentation, we will prepare the notices and forward them to the respective potential creditors. To ensure that all creditors, if any, are given the requisite notice, please provide us with the information within 10 days from the date your are appointed as Guardian of the Estate.
Your appointment as Guardian of the Estate comes with very high fiduciary duties that are designed to protect the interests of the Ward. Briefly stated, you should observe the following guidelines at all times:
With regard to your duties, the first duty as Guardian of the Estate is the collection of all assets owned by and all claims owing to the Ward. It is your affirmative duty to actually collect or otherwise render unto your sole control all of these assets. As the Guardian of the Estate, you are entitled to the possession and management of all property belonging to the Ward, to collect all debts, rentals, or claims that are due the Ward, and to bring and defend suits by or against. It is important to remember that, in carrying out your powers, Texas law imposes on you the duty as Guardian, to take care of and manage the estate as a prudent person would manage their own property. Texas law further provides that, immediately after receiving your Letters of Guardianship, you are required to collect and take into possession all of the Ward’s personal property, record books, title papers, and other business papers. Of course, you are considered in “possession” of any items that your agents, such as your attorneys, accountants or other advisors, have actual possession on your behalf. You should also arrange to have all of the Ward’s mail forwarded to your address.
As part of your duty to collect and safeguard the estate assets, it is important that you verify that each insurable asset, both real and personal property, is adequately insured. By adequately insured, we mean both property (general, fire, flood, etc.) and liability insurance where applicable. If you are unsure that an asset is properly and adequately insured, you should immediately obtain full coverage on the property. Such property includes the Ward’s house, any other real property, household furnishings, automobiles, recreational vehicles, jewelry, art collections, etc. If any property is co-owned with another individual, we suggest that you coordinate the acquisition and issuance of all personal and real property, including but not limited to fire, wind, flood, and liability and verify Ward’s interest will be covered under such policy. We also advised you that the policies should cover you, in your fiduciary capacity as Guardian. Finally, you may want to arrange to purchase an umbrella policy to cover you in your fiduciary capacities.
At this time, we wish to give you more specific instructions with regard to the management of the Ward’s funds. First, you should open a separate interest bearing account for the cash funds. As previously stated, you should never commingle the Estate’s funds with your own property, or borrow from the Ward’s property, not even for a day. An unauthorized disbursement of guardianship property, even if repaid, may be a breach of your duties to your ward and subject you to personal liability. The accounts should be either a money market or savings account, or certificate of deposit, depending upon how flexible an arrangement you wish to make with respect to the Estate’s cash. We usually recommend that a money market checking account be opened which should hold a nominal amount of funds to cover emergencies. The remainder of the cash should be invested as follows:
The style of the Estate’s bank account, certificate of deposit, etc., should be as follows:
Your Name, Guardian of the
Estate of Ward’s Name, an Incapacitated Person
Prior to investing any assets of the Estate and within 180 days of your qualification as Guardian, you are required to file a management plan with the Court. This plan informs the Court of how you will manage the assets or declare that investment is not feasible due to the value of the estate.
Essentially, all disbursements from the Ward’s funds should be made after the Probate Court has given you written approval for the expenditure in question. You should never disburse funds without court approval, except for payment of taxes, bond premiums or insurance on property of the estate. We cannot stress the importance of gaining court approval for any expenditures because you can be held personally liable for any unauthorized expenditures. Within thirty (30) days of your qualification as Guardian, you are required to file an application requesting a monthly allowance based on an estimate of the Ward’s living expenses. Please contact our office, as soon as possible to review the monthly expenditure with us. We will then prepare the appropriate application and order and submit it to the court for consideration.
Usually these matters do not require a formal hearing because the court’s audit staff handles these matters and submits the applications to the Judge without any hearing. Thus, our fees are minimized with respect to these matters.
You should use your home address for each account, and the Ward’s social security number should be used for each respective account so as not to confuse the interest income from the accounts with your taxable income.
Please keep accurate records of all income, receipts and disbursements which are placed into and taken out of the Estate’s accounts. As you are aware, it will be necessary to report these receipts and disbursements each year in an annual accounting to the court. The annual account is due each year within sixty (60) days of the date you qualified as Guardian. We will calendar the date of your anniversary and will send you a letter to remind you of your duty to file an annual accounting. If you want to have our office prepare the accounting, you will need to contact us well before the deadline the account is due and we can advise you what we will need to prepare the accounting.
Finally, you are responsible for the filing of the Ward’s individual income tax return and paying all taxes that may owe when due. We do not prepare these individual income tax returns and we suggest that you discuss the handling of these returns with an accountant as soon as possible. If you wish to hire an accountant to prepare these income tax returns, we will need to file an application with the court to obtain court approval to retain the accountant.
If you have any questions about your duties as Guardian or any other matter, please do not hesitate to call this office at any time.