Holcomb Dunbar - North Mississippi Attorneys

Conservator and Guardian Responsibilities

courthouse1By Brad Golmon

The Supreme Court of Mississippi recently ruled in a case having to  do with the standards that must be met before a conservatorship is established and the rights of the ward, the person who is the subject of the conservatorship, as well as those charged with caring for him or her, his or her conservator.  Those duties are some of the least understood duties among the public and when violated cause the most trouble for people.  That truth, coupled with the difficulty and stress that accompanies the duties of a conservator makes it important to understand clearly the rights and obligations so that a person in that position of responsibility can not only know what to do, but when to ask for help.

The duties of a conservator rely in large part on the duties of a guardian and specifically make reference to the parts of the Mississippi Code dealing with Guardianships.  The main difference between the two is that a guardianship usually has as its subject a minor who may not be disabled in any way, while a conservatorship deals with typically an adult, who through sickness, aging, or an accident, cannot manage his or her own affairs.

Essentially a Guardianship or Conservatorship is the legal relationship that exists between a person (the Guardian/Conservator) appointed by a court to take care of and manage the property of a person (the Ward) who does not possess the legal capacity to do so, by reason of age, comprehension, self-control, injury or some other reason.  A guardianship typically ends when the ward achieves the age of 21.  A conservatorship ends only upon the rehabilitation of the ward, and in some cases that may never happen.

The law of guardianships and conservatorships in Mississippi is based on Mississippi Code Section 93-13-1 and the following sections.  There have also been court decisions that modify and help explain some of these provisions.  The remainder of this article applies to conservatorship and guardianships, but for simplicity I will refer only to guardianships, unless clarity demands otherwise.

There are two basic types of guardians: of the person and of the property. A guardian of the person has custody of the ward and responsibility for the ward’s daily care. A guardian of the property has the right and the duty to hold and manage all property belonging to the ward. A ward usually has a general guardian, who supervises both the person and the property, but in some circumstances it is necessary and convenient to divide responsibilities.  This can also be true of a conservatorship, but is far less likely.

A guardian cannot be appointed for a person unless that person is in need of supervision by a representative of the court. The natural guardian of a child is the child’s parent. A parent can lose this status by neglect or abandonment.  In addition, when both parents die, leaving a minor child, the court will often appoint a guardian.

The Chancery Court is the court with authority to appoint guardians and conservators. The Chancery Court also oversees administration of these matters.  The Court can appoint a guardian for a ward wherever that person lives.

Once a guardian is selected, he or she is required to take an oath of office before performing the duties of guardian.  Our statutes also require a guardian to post a bond or pay the court a sum of money out of which a ward can be reimbursed if the guardian fails to perform the duties faithfully.  The formal appointment of a guardian is completed when the court issues the guardian a certificate called letters of guardianship.  The naming of a guardian in a parent’s will is only a nomination. The court must issue the letters of guardianship before a guardian has the legal authority to act.

A guardian’s authority continues as long as the ward is below the legal age of majority but a conservator’s authority continues until a further order of the Chancery Court. If the ward marries before reaching the age of majority, guardianship of the person can end. A Chancellor can extend a guardianship beyond 21 but this not likely to happen if the Ward is doing well.

A guardian can be stripped of authority whenever a court is convinced that he or she has neglected the duties of guardian or mismanaged property. In some cases, courts can order partial removal. For example, a parent who has squandered money that should have remained in a child’s bank account can continue to have personal guardianship of the child, while someone else acts as guardian of their property.  Under Mississippi law, a guardian can be removed under the terms and provisions of Mississippi Code Annotated Section 93-13-23.  The next section, 93-13-25, deals with resignation of a guardian.

When acting as guardian of the person, a guardian is entitled to custody and control of the ward.  Under Mississippi Law the general functions of a guardian are described in Section 93-13-38.  This provision relies heavily upon the law of executors and administrators and incorporates the fiduciary duty owed by an executor or administrator into the guardianship context.

A guardian of the person of a child can prevent certain people from seeing the ward, but a court will not allow unreasonable restrictions. A guardian also has the right to move to a different state with the child, but can be required to appear in court prior to relocation and give assurances regarding the child’s care. A guardian has the duty to provide for the child’s support, education, and religious training. Courts permit a guardian to use income and interest earned by the child’s assets to pay for the child’s needs, but they are reluctant to permit the guardian to spend the principal, unless a budget order has been issued.  A parent is primarily responsible for the support of a child, so when a parent is living, his or her money must be used before the child’s resources are spent. The child has a right to receive all of his or her property upon reaching the age of majority, unless restrictions are imposed by a will or a trust instrument.

Mississippi Code Annotated Section 93-13-15 describes most guardians as “general guardian.”  Mississippi law mandates that a general guardian or a guardian is considered a fiduciary—a person who occupies a position of trust and is legally obligated to protect the interests of the ward in the same manner as his or her own interests.  This is likely the most important aspect of a guardianship or conservatorship, and when violated the most troublesome.

A guardian cannot invest the ward’s money in speculative ventures, agree not to sue someone who owes the ward money, or neglect legal proceedings, tax bills, or the maintenance of land, crops, or buildings that are part of the ward’s estate. In addition, a guardian cannot allow someone else to maintain a business that the ward inherited or permit someone else to hold on to property belonging to the ward, without supervising such transactions. A guardian must earn income from the ward’s property by making secure investments.

A guardian must take inventory and collect all the assets of the ward. In Mississippi, title is in  name of the guardian “as Guardian of the Ward” which indicates that the guardian has the legal right to hold or sell the property but must not use it for his or her personal benefit. The guardian must determine the value of the property and file a list of assets and their estimated value with the court. The guardian must collect the assets promptly, and is liable to the ward’s estate for any loss incurred owing to a failure to act promptly.

Generally, a guardian does not have the authority to make contracts for the ward without specific permission from the court. If the child is party to a lawsuit, a guardian cannot assent to a settlement without first submitting the terms to the court for approval. A guardian must deposit any money held for the ward into an interest-bearing bank account separate from the guardian’s own money.   A guardian is also prohibited from making gifts from the Ward’s estate and prohibited from using the Ward’s assets for his or her own benefit.

Under Mississippi Code Annotated Section 93-13-67, annual accounting is  required, unless the Court orders otherwise.  An annual accounting is simply the guardian proving to the Court what the guardian did with the ward’s money during the past year.  Failure to file an annual account can be grounds for removal of a guardian.  The guardian needs to keep copies of bank statements and a running ledger of deposits and expenditures from the assets of the ward.  So long as a guardian stays under the limits of a Court approved budget and uses the funds to the benefit of the ward, it’s difficult to criticize the guardian.

The Mississippi Code describes duties and obligations as to real property and personal property belonging to the ward.  These sections include: 93-13-41, 43, 45, 47, 49, 51 and 53.  In order to liquidate (or sell) anything that belongs to the ward, the guardian needs to seek Court approval.  As to other transactions, the best rule of thumb is to stay within the budget that has been approved.  Anything outside of that would be better of the guardian seeks prior approval by the Chancery Court.  That can be done under the terms and provisions of 93-13-55, which allows for a guardian to seek instruction from the Court.

A guardian cannot tie up the ward’s money by purchasing real estate, but can lend the money to someone else buying real estate if the property is sufficient security for the loan.  It’s best to seek prior Court approval for such an action.  A guardian cannot borrow money for personal use from the ward’s estate. A guardian can lease property owned by the ward, but ordinarily the lease cannot extend beyond the time the ward reaches the age of majority. A guardian cannot mortgage real property or permit a lien on the property of the ward. A guardian can sell items of the ward’s personal property and real property, but must receive the permission of the Court to do so.

At the end of the guardianship period, a guardian must account for all transactions involving the ward’s estate. The guardian is usually required to file annual reports periodically with the court, but a final report must be filed and all property turned over to the ward when the ward has reached the age of majority. If the guardian has not managed the property in an ethical or lawful manner, the ward, upon reaching adulthood, may sue for waste, conversion, or embezzlement. If the management of the ward’s assets was not illegal but resulted in losses, the guardian must reimburse the ward. If the guardian has managed the assets correctly, the guardian is entitled to be paid out of the ward’s estate for his or her services.

Whenever a guardian participates in a lawsuit for the ward, he or she sues or is sued only “as guardian,” and not personally. For example, if the ward sues a physician for malpractice and recovers damages, the money does not belong to the guardian even though he or she initiated the lawsuit for the ward. In the same way, if someone obtains a judgment for damages against the ward, the money must come from the ward’s property, not from the guardian. If both the guardian and the ward are parties in one lawsuit, the guardian participates in the action as both a guardian and an individual.

There are other specifics that apply to guardians and conservators, but this is a good summary and starting place.  The primary thing that some guardians and conservators forget is that they must keep the ward’s assets separate from their own.  Nothing causes more trouble in these kinds of situations than that.

For more information about guardians or conservators, please contact Brad Golmon

 

2018