The Nuts and Bolts of Managing an Adult Guardianship Estate Stacy - PowerPoint PPT Presentation

Illinois Guardianship Association Conference October 1, 2019 The Nuts and Bolts of Managing an Adult Guardianship Estate Stacy Berk Supervising Attorney & Director of Training Office of the Cook County Public Guardian 69 W. Washington Street, Suite 700 Chicago, IL 60602 (312) 603-0800 stacy.berk@cookcountyil.gov

What is an Estate Guardian? ▪ The estate guardian is responsible for managing the property, finances, and legal matters of the person with a disability. ▪ At all times, the estate guardian must follow the law and any court orders specific to his/her guardianship. ▪ An estate guardian should avoid any conflicts of interest or the appearance of impropriety when handling the assets of an individual under guardianship. ▪ An estate guardian is required to have legal counsel in Cook County and is expected to seek guidance from financial professionals when appropriate.

Duties of the Estate Guardian 755 ILCS 5/11a-18 ▪ This is the primary section of the Probate Act governing guardians of the estate. ▪ The estate guardian has a statutory duty to always act for the best interests of the person with a disability.

Duties of the Estate Guardian 755 ILCS 5/11a-18 Under the Probate Act, 755 ILCS 5/11a- 18(a) , “To the extent specified in the order establishing the guardianship, the guardian of the estate shall have the care, management and investment of the estate , shall manage the estate frugally and shall apply the income and principal of the estate so far as is necessary for the comfort and suitable support and education of the ward , his minor and adult dependent children, and persons related by blood or marriage who are dependent upon or entitled to support from him, or for any other purpose which the court deems to be for the best interests of the ward , and the court may approve the making on behalf of the ward of such agreements as the court determines to be for the ward’s best interests.”

The Guardian’s Powers: Plenary vs. Limited Guardianship ▪ A plenary guardian of the ▪ An order appointing a estate has all the limited guardian of the authorities listed under estate allows the court to 755 ILCS 5/11a- 18 and is reserve certain also known as a “full” authorities under 755 ILCS guardian. 5/11a-18 to the person under guardianship. ▪ A guardian should always retain copies of his/her court order appointing a guardian and his/her “letters of office”.

Surety Bonds ▪ Every individual representative must file an oath or affirmation that he/she will faithfully discharge his/her duties, and every guardian of the estate is required to file a bond which must be approved by the Court. (755 ILCS 5/12- 2) ▪ Bond should be obtained with a surety company. ▪ The amount of the bond must be 1.5 times the value of the estate when a surety company acts as surety.

Surety Bonds (continued) ▪ A guardian of the estate must post additional bond when he/she sells or mortgages real property (1.5 times the amount of funds “likely to come into the hands” of the estate. (755 ILCS 5/12-9; Circuit Ct. of Cook County R. 12) ▪ Financial institutions that serve as guardian of the estate are excused from posting a surety bond. ▪ The Office of the State Guardian is excused from posting a surety bond. ▪ The Cook County Public Guardian posts a blanket surety bond.

Guardian of the Estate – Getting Started •The estate guardian has a duty to keep the assets and income of the individual under guardianship separate from his/her own assets and income. •Set up a separate guardianship account for depositing income and paying expenses. •Maintain copies of bank statements and keep all receipts.

Guardian of the Estate – Getting Started – What’s in the Estate? ▪ Contact the U.S. post office to redirect the individual’s mail; contact utility companies and known financial institutions to change mailing address. ▪ Apply to become representative payee with Social Security Administration and contact the pension or annuity provider to redirect monthly income. For individuals already on Medicaid or Medicaid-pending, consider authorizing a nursing home to become representative payee of Social Security income. ▪ If the individual owns real property, conduct an inspection and inventory of the contents.

Scenario #1 Patricia Phillips is 80 years old and diagnosed with dementia and paranoid psychosis. Ms. Phillips is a widow. She has 3 children, none of whom were interested in becoming her legal guardian. Ms. Phillips was discharged to a nursing home after a hospitalization and has a large balance accruing. Her only known income is Social Security and a pension, and her only known assets are a bank account with approximately $10,000, an old car, and a single family home where she previously resided.

Verified Pleadings – 755 ILCS 5/1-5 Petition under oath ▪ Every petition filed under the Probate Act must be under oath or affirmation (except for statements made on information and belief). ▪ Include a signed verification statement with every petition and/or court filing. “Under penalties as provided by law pursuant to Section 1-109 of the Code of Civil Procedure, the undersigned [attorney] certifies that the statements set forth in this instrument are true and correct, except as to matters therein stated to be on information and belief and as to such matters the undersigned certifies as aforesaid that she verily believes the same to be true. ”

Notice Requirements ▪ See 755 ILCS 5/11a-18(a-5) and 755 ILCS 5/1-6 ▪ Who should receive notice of court filings? ❑ the individual under guardianship (consider individual’s state of mind and plenary vs. limited guardianship) ❑ family ❑ heirs/legatees ❑ GAL and other attorneys who have filed an appearance ❑ friends ❑ other parties and interested persons as the Court directs

Inventories ▪ Within 60 days of his/her appointment, a guardian of the estate is required to file an inventory with the court. (755 ILCS 5/14-1 and Rule 12.9 of the Rules of Circuit Court of Cook County) ▪ The court date for the initial inventory is typically set at the date of appointment and included in the appointment order. ▪ Inventories must be verified.

Inventories (continued) ▪ The inventory must describe all real and personal property which has come to the knowledge of the guardian and any cause of action on which he/she has a right to sue. ▪ Personal property is a very broad term. ▪ Personal Property includes all financial assets: ❑ bank accounts (checking, savings, CDs) ❑ investment/brokerage accounts ❑ individual stock holdings ❑ IRAs ❑ U.S. savings bonds ❑ life insurance policies ❑ annuities

Inventories (continued) ▪ Personal property includes all tangible items: ❑ household furnishings ❑ automobiles and other vehicles ❑ jewelry ❑ coins ❑ other collectibles (i.e. books, stamps, dolls) ▪ Personal property includes safe deposit boxes and their contents. ▪ Personal property includes beneficial interest in a trust (including real property held in a land trust).

Inventories – Important Notes and Practice Tips ▪ Rule 12.9 of the Rules of the Circuit Court of Cook County provides specific instructions for describing various assets including real property and stocks and bonds, as well as potential causes of action. ▪ The first inventory is considered the “initial” inventory and should be titled “Initial Inventory”. ▪ A guardian of the estate is required to file additional inventories if he/she discovers more assets, failed to include an asset in the initial inventory, or needs to correct or change the description of an asset (“supplemental” vs. “amended” inventories).

Inventories – Important Notes and Practice Tips ▪ All inventories are a “snapshot” of what the person with a disability owned at the time the guardian was appointed. Use the date of appointment to state the value of an item or the balance of an account. ▪ Obtain appraisals for household furnishings, collectibles, jewelry, coins, and automobiles.

Inventories Sample Description – Real Property REAL PROPERTY Item No. Description 1. Single family home located at _______ Street, Skokie, Illinois 60077. PIN: xx-xx-xxx-xxx-0000 Legal Description: Lot __ in the Subdivision of Lots 1, 2, and 3 in the Resubdivision of Block __, being a subdivision of parts of the southeast 1/4 of Section 16, Township 41 North, Range 13, east of the 3rd Principal Meridian in Cook County, Illinois. Title: Craig Phillips and Patricia Phillips, his wife, in joint tenancy. (Craig Phillips is Patricia Phillips’s deceased husband.) Property taxes: 2017 taxes were sold. Encumbrances: Memorandum of Judgment entered June 10, 2017, by the Administrative Hearing Officer for The Village of Skokie, for ordinance violations in the amount of $750.00