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Document Contents
- Introduction
- What a Guardian of the Estate Must Do
- What a Guardian of the Estate May Do Without Court Approval
- What a Guardian of the Estate May Do Only With Prior Court Approval
- What a Guardian of the Estate May Not Do
Introduction
A Guardian of the Estate is a person or corporate entity appointed under secs. 880.33 and 880.27 of the Wisconsin Statutes, responsible for financial management of the ward's assets, e.g., investments and bill paying, with annual accounts to the court required (sec. 880.25 of the Wisconsin Statutes). Examples of situations where a Guardian of the Estate might be needed are where there is no previously-executed durable power of attorney for financial affairs and:
There are four categories of laws governing Guardians of the Estate:
- An individual is mentally incapable of taking care of bill paying, investments and money matters;
- The property of an incapacitated person must be sold; or
- A health care provider or other service provider requires that a guardian be appointed before entering into a contract for services, e.g., nursing home admission.
- What Guardians of the Estate must do with the ward's property;
- what Guardians of the Estate may do with the ward's property without approval of the court;
- what the Guardian of the Estate may do with the property of the ward only with specific approval of the court; and
- what a Guardian of the Estate may not do.
What a Guardian of the Estate Must Do
- File the inventory of assets within six months of appointment. The inventory must be verified by the court.
- Possess the ward's property and exercise rights over it. (Title, however, remains with the ward.)
- Protect and preserve the ward's property.
- Carry out his or her fiduciary responsibility to exercise good business judgment and common sense. In handling the ward's assets, the guardian must use the same degree of judgment and care that persons of ordinary prudence, discretion and intelligence would use in handling their own assets under similar circumstances. [FN 1]
- File annual accounts each year by April 15 for the preceding year. (This does not apply to corporate guardians.) The guardian must account for all funds received and spent, and is at risk of being removed by the court for failing to file these accounts.
What a Guardian of the Estate May Do Without Court Approval
- Demand, sue for, collect and receive all debts and claims for damages due the ward.
- Retain the ward's personal or real property possessed by the ward at time of appointment or later received by the ward by gift or inheritance without regard to Chapter 881 of the Wisconsin Statutes (Trust Fund Investments), and use judgment and care as a person with prudence, discretion and intelligence, without speculating.
- Sell, invest and reinvest the proceeds of the sale of any trust fund investments according to the law in Chapter 881 of the Wisconsin Statutes.
- Settle all the accounts of the ward.
- Use the personal property or income of the ward for the suitable education, maintenance, and support of the ward and family members. NOTE: This includes spouse and dependent family members only.
- Use the personal property or income for the care and protection of real estate (or real property) owned by the ward.
- Collect the ward's income, such as Social Security, pension, dividends and interest.
- Pay the ward's bills and contest or compromise claims.
- Take care of the ward's home or other real estate and put things in storage.
- Hire professionals (for example, attorney, CPA, appraiser, etc.).
- Sign the ward's tax returns.
- Petition for placement of the ward's assets into his or her revocable living trust.
- Apply for public benefits, e.g., SSI or Medical Assistance. NOTE: In anticipation of such application, the guardian may purchase irrevocable burial trust, paid-up life insurance and other exempt assets for the ward. There is, however, no authority for the guardian to divest the ward's assets.
What a Guardian of the Estate May Do Only With Prior Court Approval
- Continue the business of the ward. The court must decide that continuing the business is advantageous to the ward and then set terms and conditions of how the business would be continued.
- Invest proceeds of the sale of any property or funds subject to the guardianship in other real or personal property. Any such investment must be determined by the court to be "in the best interests of the ward."
- Keep any real or personal property of the ward possessed by the ward at the time of appointment or received by gift or inheritance when prudent business practice would suggest that the property be sold and the proceeds invested. EXAMPLE: A guardian should ask for court approval to hold on to an antique family heirloom to avoid a claim of mismanagement of the estate.
- Sell, mortgage, lease or exchange any property of the estate, and then only for:
- Paying the just debts of the ward; OR
- Providing for the care, maintenance and education of the ward or the ward's dependents; OR
- Investing the proceeds; OR
- Any other purpose the court determines to be in the ward's best interests. NOTE: Very specific, detailed procedures must be followed and the advice of a lawyer is recommended.
What a Guardian of the Estate May Not Do
NOTE: A Guardian of the Estate has no authority over personal and health care-related decisions for the ward, such as determining needed services, consenting or refusing certain health care or admitting to a nursing home or Community-Based Residential Facility.
- Loan any of the guardianship funds to him or herself.
- Use any of the guardianship funds or property for his or her personal needs.
- Give away or donate any of the ward's funds or property, even where there has been a pattern of such gifts, or to assist the ward in qualifying for Medical Assistance.
- Purchase any of the property of the ward unless:
- The sale is a public sale, such as an auction; AND
- The court specifically authorized the sale; AND
- The guardian making the purchase is a spouse, parent, child, brother or sister of the ward, or is a co-tenant with the ward in the property.
Last updated: August 12, 1997
By: Gail SchwersenskaThis document was produced by:
The Elder Law Center
Coaltion of Wisconsin Aging Groups
5900 Monona Drive, Suite 400
Madison, WI 53716-3554
Phone: 608-224-066 or 1-800-488-2596Reproduction is encouraged, provided credit to the Elder Law Center/Coalition of Wisconsin Aging Groups is retained.