Tag Archives: guardianship

Have you collected the Social Security benefits to which you may be entitled?

You worked hard your whole life and paid money into the Social Security program evey month. So did your spouse. And now that you are both retired, you are relaxing, enjoying life and collecting a benefit check every month.

But Social Security benefits are not just for retirement. They are for widows and widowers, too. That’s right. Some of the money you paid into Social Security during your working life goes to survivor’s insurance from which you may one day be entitled to collect benefits. The amount of those benefits is based on lifetime earnings.

It is important to know that the surviving spouse is not the only one who can collect benefits. Surviving minor or disabled children are eligible as well.

Diesmart has received questions from widows and widowers who want to be sure they have collected all of the pension benefits to which they are entitled. However, they usually either forget or don’t know that they are leaving money on the table when they don’t file for Social Security survivor benefits as well.

Don’t forget to contact the Social Security administration to find out what steps you need to take to collect benefits to which you are entitled. www.ssa.gov/survivorplan/ifyou.htm

For more information about death benefits, go to www.diesmart.com.

Minor children: Property management

It’s important to understand what happens to money you leave to your minor children and how to avoid potential pitfalls.

A Last Will and Testament

  • If you leave money to your minor children via your will, a guardian will need to be appointed by the probate court to manage the funds.
  • Depending upon the size of the inheritance, the courts may govern how the money ought to be invested.
  • When the child becomes an adult, at age 18 or 21 depending upon state rules, the child becomes the owner of all the assets.

A Living Trust or A Testamentary Trust

  • If you leave money to your minor children via your trust, your trustee will manage the trust assets for the benefit of your minor children according to the instructions you include in the trust.
  • These instructions can include the age at which you want your children to have access and control of the funds.  For instance, you can give a child access to 1/3 of their inheritance at age 25, 1/3 at age 30 and 1/3 at age 35.

Guardian of the person: Minor child

A guardian of the person has day-to-day responsibility for your minor children, assuming the role of a substitute parent when you die.

Q. How is the guardian of the person appointed?
A.When you die, someone must petition the court to be appointed as the guardian of the person.  You have the right to nominate a guardian of the person to take care of your children when you die.  The court will normally defer to that person as the guardian of the person and the guardian of the estate.  However, other individuals have the right to petition the court to serve in these roles.  If this should happen, the court will examine who best will protect the interests of the minor(s) and appoint that person as guardian.

If you don’t nominate a guardian, the court will do it for you, according to state rules of preferences.  A surviving parent usually comes first, followed by grandparents, if neither parent is alive.

Fact: Surviving parent rights
If one parent dies, the surviving parent continues to have the right to take personal care of minor children.

When a divorced or single parent dies, the court generally appoints the surviving parent as guardian of the person for a minor or disabled child, even if the deceased parent would have been opposed to that.



If someone believes you are not able to manage your own affairs, they have the right to petition the court and ask the court appoint someone referred to as a conservator to manage your legal and personal affairs.

  • If you have set up a living trust, a co trustee or successor trustee has the inherent right to manage your property on your behalf with no intervention of the court.   If you haven’t set up a living trust, a spouse may learn they do not have the legal authority legal authority to buy or sell property without you designating that he or she is your attorney-in-fact.
  • If your children need to act as a caregiver, your children may not be able to manage your money without you designating them as your attorney-in-fact.
  • If you are not married, your partner will generally not have the legal right to manage your financial affairs unless you have completed a power of attorney naming your partner as your attorney-in-fact.

In the absence of any such advance directive from you giving someone the power to manage your money and property for you, a spouse, child, attorney, other relative or loved one must begin a legal process known as a Conservatorship with the probate court.

Q. What happens when a conservatorship case is filed?

A. Conservatorship is a judicial process whereby the probate court appoints a person, referred to as a conservator, to hold and protect your personal and financial rights.

The purpose of the conservatorship process is to have the probate court appoint someone and give them legal authority to make financial decisions and/or personal care decisions on your behalf.  Some states call this process a Guardianship, as the person appointed to take care of a mentally incompetent adult has duties similar to those of a guardian for a minor or disabled child.

Attorneys often refer to the conservatorship process as living probate, because the probate courts become involved in managing your affairs while you are living.

The conservatorship process is a two-part procedure.

Step 1: Someone, usually a spouse or an adult child, must file documents with the courts requesting you be declared incapable of managing your personal or business affairs.

When a conservatorship action is filed, it must be served on all interested parties.  The court will set a time for an evidentiary hearing.  At the hearing, testimony will be given by friends and medical professionals regarding your physical and mental health.  You may be present at the hearing and the judge may ask you questions to establish your incompetence.

After hearing the evidence, the court may deem you mentally incompetent and/or unable to care for your own basic personal and financial protection.

Step 2: After the court agrees you are incapable of managing your own affairs, your spouse or some other third party will request that they be appointed as conservator.

More than one party may apply to serve as your conservator.  If there is more than one person who seeks to be appointed conservator, state preference laws give higher priority to the appointment based on their relation to you. For example, if you are married, the preference is for your spouse.  If you are not married, the next priority is usually your parents.  Other interested parties, including members of your family, have the right to contest a request to act as your conservator.

The person appointed to act on your behalf, referred to as the conservator, is required by law to provide to the court an accounting of how they manage and spend your money.  The conservator can charge a fee for performing these duties.  All legal, accounting and court fees are paid for from assets owned by you, the conservatee.

A Family Story: Living Probate: Contested Conservatorship.

Matt and Emma, a married couple, owned a restaurant together.  Matt had been married before; he had one daughter from that marriage, Jessica, age 28.

Matt, at the age of 57, suffered a stroke, from which he suffered major brain damage rendering him incapable to walk, talk or think rationally.  Matt’s doctors concluded his condition was permanent. Emma decided to sell his business and take care of Matt.

Matt had not prepared a durable power of attorney.  No one had the legal authority to sign any documents authorizing the sale of the business.

Emma met with her lawyer.  The lawyer explained the need to file for a conservatorship over Matt.

Emma filed documents requesting the court declare Matt incompetent and for her to be appointed as the conservator.  The court scheduled a time to hear testimony from Matt’s doctors. Emma and Jessica attended the hearings.  The judge agreed Matt was incompetent and needed someone to make decisions on his behalf.

Jessica contested the appointment of Emma as the conservator and filed documents alleging such a choice would put Jessica’s inheritance at risk.

After a lengthy, expensive, public legal procedure, the court appointed a financial institution as the conservator of the estate for Matt.  This financial institution will receive a fee for managing Matt’s affairs, money which will come from Matt’s income. The court appointed Emma the conservator of the person for Matt.

All of the documents filed with the courts regarding Matt’s physical condition and his finances are public information.

Just when Matt needs the support of both Emma and Jessica, they are not talking to each other.  Matt could have executed a power of attorney naming Jessica and Emma as co-attorneys-in-fact, requiring both signatures on financial decisions.  This simple document would have likely eliminated costly legal proceedings and the management of Matt’s financial affairs by someone Jessica and Emma have never met.


Q. Can you prevent your financial or health care information filed with the courts from being public?

A. Documents filed with the courts as part of a Conservatorship procedure are generally public records.  Anyone can visit a probate court or go on line and review most of these documents.


Q. Why should you complete a Pre-Need Conservator form?

A. Sometimes, whether you like it or not, someone may file documents with the probate court requesting the courts appoint a conservator to act on your behalf.  Anyone is entitled to seek to have you conserved or to have a guardian appointed for you.

If the court decides that you do, in fact, need to be conserved and if you have previously completed a pre-need guardian form which designated a person who you trust to serve as your conservator or guardian, the court will give first priority to that person in its appointment.  If you have not prepared a pre-need guardian form, the courts may appoint someone you would not want making financial and health care choices for you.

FACT: Pre-Need Guardian for minor children.

If you have minor children, you should also complete a Pre-Need Guardian form designating someone you want to become your children’s guardian, in case you ever become incapacitated.  This document may not deny a natural parent their right to be a custodian, but single parents should definitely complete this form.


Minor Children

Protecting your precious assets....

Protecting your precious assets....


Parents have the right to appoint someone to be responsible for the daily care of their children, referred to as a Guardian of the Person.
Parents, grandparents and others have the right to give property to a minor child.  Individuals routinely name a minor child as a beneficiary on beneficiary forms or in their wills without understanding the consequences.

In most states, the law does not allow minor children to own and manage assets.   Naming your child or grandchild as a designated beneficiary on a beneficiary form or in your will usually means the probate courts must become involved in the management of their inheritance until the child becomes an adult.   In addition, giving money directly to a child with “special needs” may impact their ability to receive government benefits.

Q. Who do you want to manage your children’s daily care when you die or if you become incapacitated?

A. You have the right to nominate a guardian of the person to take personal care of your minor children.

The guardian of the person has day-to-day responsibility for your children, assuming the role of a substitute parent.    When you die, someone must petition the court to be appointed as the guardian of the person.   The court will normally defer to the person you nominate as the guardian of the person.

If you don’t nominate a guardian of the person, the court will do it for you, according to state rules of preferences.  A surviving parent usually comes first, followed by grandparents if neither parent is alive.

Fact:  Surviving parent rights.

If one parent dies, the surviving parent continues to have the right to take personal care of minor children.

When a divorce or single parent dies, the court generally appoints the surviving parent as guardian of the person for a minor or disabled child, even if the deceased parent would have been opposed to that.


Q. What age would you want a minor child to gain control of their inheritance?

A. There are three ways you can give property to a minor child.    You can set up a trust.   You can name a guardian in your will.   You can name a custodian.

Choice #1:  Trusts for Children

You can include instructions in your living trust or a testamentary trust in your will establishing a new trust for your minor children when you die.

You can specify what assets you want transferred to the trust to be used for the benefit of your minor children

You can name a trustee to manage these assets for your children, either an individual or a financial institution

There is no requirement for the probate courts to be involved in the management of trust assets

Unlike state laws which give inherited probate property to minors when they reach age 18 your trust can include instructions about the age at which you want the children to inherit the property, e.g., one half at age 25 and the remainder at age 35.

If you become mentally incompetent, your living trust can give the trustee the right to manage trust assets for your minor children.

Choice #2:  Custodianship

A law known as the Uniform Transfers to Minors Act (UTMA) allows you to name an adult custodian to manage specific accounts that will be held for the benefit of a minor child until the minor child is considered an adult.  You can name a custodian in your will, your living trust or on beneficiary forms.

No court process is required to approve the custodian.

No court supervision of the custodian is required

State laws determine what types of property can be owned in a custodial account.

Q. How do you designate a custodian on beneficiary form?

A. If you want “John Jones,” your minor child, to get the proceeds of a life insurance policy, you would fill out the beneficiary designation like this:  “Mike Smith, as custodian for John Jones under the Uniform Transfer to Minors Act.”  If you die or become incapacitated before John becomes an adult, Mike, the designated custodian, manages the account until John reaches the age at which state laws considers him or her to be an adult.

Q. How do you designate a custodian in your will?

A. If you want “Allison Astor”, a minor child, to be a beneficiary in your will, you would fill out the beneficiary instructions like this:  “All property I leave by my will to Allison Astor shall be given to her mother, Kim Astor, as custodian for Allison Astor under the Uniform Transfer to Minors Act of California.”

Choice #3:  Guardian of the estate Designated In Your Will

Q. How do you appoint someone to manage property on behalf of a minor child in your will?

A. If you have a will, you have the right to nominate a person or a financial institution a the guardian of the estate for our minor children.   When you die, the guardian will file papers with the court requesting approval of our nominee.  Once appointed by the courts, the guardian of the estate will assume financial control of the child’s bequest and manage it for the benefit of the child.

Most courts require the guardian of the estate to purchase a surety bond as part of the guardianship process.

Most state laws terminate the guardianship of the estate when the minor becomes a legal adult (turns 18 or 21) at which time the funds are given over to the child

The guardian of the estate will be required to file annual reports with the courts, which become public records and are available for public access.  The actions of the guardian may be subject to court review and may restrict how the guardian can use the funds for the benefit of a minor child.

Q What is the disadvantage of using a will to name a guardian of the estate for a minor child?

A.  When you name a minor child as a beneficiary, some states set limits on the amount of money a guardian of the estate can manage on behalf of a minor child.   If the amount of inheritance exceeds state limits, some states require a separate court procedure, sometimes referred to as a conservatorship.  The conservator will be required to report on a regular basis how he manages and spends the child’s inheritance.  For a fee.

The court appointed conservator becomes responsible for deciding how to invest and spend the money left to the minor child, not the guardian you named.  Their choices may be dictated by state statutes.

Using California as an example:

  • If a minor inherits $5K or less, his parent may hold the inheritance money and/or property in trust for the benefit of the minor until he or she reaches the age of 18.
  • If the minor inherits more than $5k but not more than $20K the court has discretion to hold the money on any condition it determines to be in the best interest of the minor.
  • If a minor inherits more than $20K, the court may:
    • Order a guardian of the estate to be appointed so that the money is deposited with the guardian.
    • Order the money to be deposited in an insured account
    • Order the money to be transferred in whole or in part to a custodian account in compliance with the California Uniform Transfers to Minor Account and order the money to be deposited with the country treasurer.


Q.  What if you have a child with special needs?

A.  Consider a type of trust referred to as a special needs trust.  A special needs trust is a trust that provides for children with special needs but does not cause them to become ineligible for certain government benefits such as SSI and Medicaid.  The laws concerning eligibility are complex and changing.  Because of this, you should seek the help of a competent lawyer.


Q. What if you think of your pets as your children

A. If you love your pets, plan for their existence after you are gone.   An estimated 500,000 pets are euthanized each year because no plans were made for them in the event of their owner’s death or long-term illness.

You generally cannot make a gift of money or other property to a pet in a will or living trust.  The law considers a pet to be property and one piece of property cannot hold title to another piece of property.   Language giving gifts directly to pets is not going to be enforced by the courts.

What you can do is designates someone you trust to take responsibility for your pets when you die or if you become so incapacitated you can’t care for them.  You can also give money, either outright or in trust, to this person.  Although the money is to be used for the care of your pets, the courts have no way to enforce these terms if you simply give the money outright.

Q. What is a pet trust?

A. Some states have trust laws which allow a trust to be set up for “the care of a designated domestic or pet animal.”  The trustee is prohibited from using any of the principal or income of the trust for anything other than the welfare of the designated animal.  Just as important, state laws have made the terms of the trust enforceable.

The pet owner can designate a person with the power to enforce the trust, that is, to make certain the trustee is using the principal and income for the benefit of the pet.  If the pet owner does not name a trust enforcer, any individual may ask the court to appoint a court enforcer.

The trust terminates when no living animal is covered by the trust.  The instructions in the trust should state who inherits the property when the pet dies.

Other states allow a Pet Trust to be established, but the court will not enforce it.   If you select the caregiver wisely you will have some assurance that the pet will receive proper care.  However, the effectiveness of this arrangement turns on the reliability of the person you choose; no mechanism exists to force the caregiver to use the property for the benefit of the pet.

A large amount of money or other property left to the pet trust may cause your heirs to challenge the bequest and the court to reduce it.  The trust should state how you want the funds paid and whether the caretaker should be paid for his or her services.

If you want to set up a trust for your pets, it is better to do it while you are alive so that your pets will be immediately taken care of when you die, rather than a testamentary trust.  You should also fund the trust so money is available without delay.  If you wish to stipulate how you want your pet buried, be sure to include these instructions within the trust.

Other states permit the establishment o pet trusts but do not require the courts to enforce their provisions.

If your state does not allow pet trusts, ou should consider finding someone willing to take care of your animals when you die.  You should include the identification of this person and the pets in your will or living trust.  You can decide whether you want to leave money to this person for the care of your pets.  There may be no legal supervision to assure that this person will take care of your pets or spend the money on the pets.

If you don’t have someone willing to take care of your pets, you can consider giving your pets to a sanctuary when you die.  For a set fee, the sanctuary agrees to take care of your animals during their lifetime.  Many sanctuaries are connected to schools of veterinary medicine and some veterinarians are establishing animal sanctuaries.