Guardianship: General Outline

A guardian is an individual or institution such as a bank trust department appointed by the Texas probate court to care for an incapacitated person. There can be a “guardian of the person” and a “guardian of the estate.” The person who needs protection of a guardian is called a “ward.” Appointment of a guardian is started when a “qualified person” files an application with the court. There are rules that apply in determining who shall be appointed where more than one person seeks to be appointed. There are many bodies of law that affect guardianship issues. Just one of those bodies is the part of the Texas Estates Code on Guardianship.

Parents may execute an intervivos designation of guardian for their children and themselves in advance of actual need. Texas law will support the appointment of the persons named unless found to be not qualified for any of various reasons. The rules impose some strict requirements in the Texas Estates Code.

Avoiding Guardianships: Reasons and Methods

Guardianship creates a public record of all assets subject to administration for the benefit of the ward. Sometimes it is preferred to avoid making public records of the estate, the ward’s condition, and the proceedings before the court. And even where a guardianship should be established to maximize the protection provided the ward, it is still possible to conceal much information from the public record by using a trust to hold and manage all assets. Under the law an annual accounting must be filed with the court showing all assets, income, dispositions, distributions, and all other activity pertaining to the assets administered by the guardian. The accounting becomes part of the record and there are often reasons to not disclose the kinds of assets managed and applied for the benefit of the ward – the value of those assets, the locations of those assets, the account numbers, the identity of institutions and the like. See Trusts: Avoid Public disclosure of Assets.

It can all be avoided if there is a trust that holds assets applied for the ward’s benefit. Because the trustee controls the assets and the guardian does NOT have any duties with regard to trust management, the trust’s assets are not part of the annual accountings. Account numbers are not revealed – asset kind and character is not disclosed – aggregate values are not made part of the record. Only trust distributions paid to the ward’s guardianship estate show up as an item of income received. It is prudent to explore these matters in conjunction with development of a coherent plan to provide for the care and protection of persons who may require appointment of a guardian at some time.

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