Two years ago we wrote about the new requirements for background checks in New Jersey guardianship cases. This post discusses duties of Guardians and reporting obligations. There is a Guardianship Monitoring Program in each County Surrogate’s office, and the County Surrogates are making a point of following up after the Judgment is entered. If you are being appointed as a Guardian you need to pay close attention to your obligations, to avoid problems later. Here are a few suggestions.
- READ THE JUDGMENT, AGAIN AND AGAIN BECAUSE ITS EASY TO FORGET WHAT’S IN THERE. The Judge signs a lengthy Court Order called a Judgment of Incapacity Appointing a Guardian. It spells out numerous specific obligations as well as restrictions. There’s usually an obligation to submit an inventory of the income and assets at the 90-day point, as well as later reports. The Judgment specifies whether there are any limitations on the legal authority of the Guardian. For example, if the person under guardianship is still living in their house, the Judgment might say that property cannot be sold or mortgaged without court approval. This means that later on if the person is being moved to, say, a nursing home, the Guardian can’t just go and sell the house unless the Court has approved the contract. The Guardian has to file a Court petition ahead of time.
- ON AN ONGOING BASIS, KEEP DETAILED RECORDS OF ASSETS, FUNDS THAT ARE RECEIVED, AND ALL EXPENDITURES. The Guardian must file an Accounting with the Court on the schedule that’s in the Judgment. In some cases, this has to be a very detailed accounting. 11801_grdnshp_comprehensive Set up a good system to manage and keep track of the financial activity on an ongoing basis, because reconstructing it all after the fact can be very difficult. Make sure there is some sort of “paper trail” for all disbursements, whether that’s payment by debit card, ACH, or check. Avoid cash withdrawals and cash transactions. Keep receipts for absolutely everything.
- FUNDS OF THE PERSON UNDER GUARDIANSHIP CAN ONLY BE SPENT ON THAT PERSON UNLESS THE COURT HAS APPROVED OTHERWISE. Don’t move money back or forth between the accounts of the person under guardianship and your own accounts, unless the Court has authorized you to do so. Intermingling and gifts to others create issues without prior court authorization.
- TAKE COMMISSIONS EVERY YEAR IF YOU WISH TO BE PAID. State law authorizes commissions (fees) based on a percentage of the income received and a percentage of the assets being handled. Check the statutes and take commissions if you want to be paid. You can ask the accountant or tax preparer to calculate this for you. Of course, it’s taxable to you – so ask your own tax preparer about your personal income tax obligations.
With good record keeping and careful attention to the requirements, the guardianship can run smoothly.
CALL US for advice on any issues that arise within a guardianship………. 732-382-6070