In this continuing series on guardianships, I have given an overview of the guardianship process, a guardian's responsibilities, and the annual accounting process.
There are many areas within a guardianship where the guardian is free to act, only giving a report to the court after the fact.
However, Nevada law requires that a guardian get specific, court permission before taking certain actions. Many of these limitations create cumbersome situations where a guardian must return to the court in order to provide for the ward's care. The Legislature's intent in requiring court approval was to prevent exploitation or abuse of the ward. These transactions can be ripe with the possibility for self-dealing by a guardian, at the risk of harming the ward, even if unintentionally. In going back to court, remember you do not have to do it alone. With the help of wise advisors, you can create a clear plan to show the court as to why this is in the ward's best interests.
For example, a guardian cannot take any act which would alter or change a ward's estate plan without court approval. This means that a guardian cannot change or create a Last Will & Testament, trust, or pay on death beneficiaries, for the ward without approval. What legitimate reason could a guardian have for making such changes? Primarily, such changes may be necessary in order for the ward to access Medicaid. However, if that is the case, the guardian must get court permission to make those changes.
Additionally, a guardian cannot make gifts on behalf of a ward without prior approval of the court. Because the guardian must put the ward's interests first, the guardian cannot use the ward's assets to buy gifts for others, even if they are related to the ward, without the court's permission. This seems to be a very strict law, but it is designed to prevent a guardian from wrongly (or inadvertently) spending down the ward's assets on gifts for children and grandchildren. It is meant to prevent a situation where the ward needs money for his or her care, but it was given away to another - even if the motivation was innocent. However, there may be legitimate planning reasons for gifting including avoiding taxes, asset protection, and Medicaid planning.
A guardian also cannot borrow money in the ward's name without prior approval from the court. Additionally, a guardian cannot sell a ward's real property without court approval. This makes liquidating the ward's home for care, whether through sale or refinance, a process that must be overseen by the court.
These are just three areas where a guardian must return to the court for permission to act. There are many legitimate reasons for wanting to take these kinds of actions. Such actions may be appropriate to provide directly for the ward's care, help them qualify for medical coverage, or to maximize financial assets. Just remember you are not alone. The court, you, and everyone else is focused on the ward's best interests.
Cassandra Jones is an elder law and family law attorney in Gardnerville. She can be reached at 782-0040.