North Carolina legal assistants working with estate lawyers may be interested in a day-long seminar, Estate Planning and Probate Practice for Paralegals, to be held in Chapel Hill on January 25, 2012. I will be presenting the portion on Assisting with Guardianships.
I've been at the North Carolina Guardianship Association conference for the last couple of days. One issue that I never really gave much thought to is that the Veterans Administration, as a federal agency, does not recognize state guardianships. Neither the adjudication of incompetency under state law nor the appointment of a guardian is given credence by the VA.
Thus, a guardian has no authority to deal with VA benefit payments, and must initiate a federal proceeding to attempt to gain that right. The VA will make its own determination of incompetency, based on different standards than state law. Then, if the veteran or spouse is determined to be incompetent, a federal fiduciary is appointed. This may or may not be the same person as the guardian.
The federal fiduciary deals only with the VA payments, and must use the money in accordance with a strict spending plan set by the VA. There is virtually no discretion involved.
This is a basic outline of initial procedures and considerations in an incompetency and guardianship proceeding in North Carolina. Such proceedings are necessary when an adult can no longer care for or make decisions for himself or herself and there are no feasible alternatives in place.
Petition for Adjudication of Incompetence is filed with the Clerk of Court.
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I'm leaving on vacation tomorrow, so it's a hectic day in the office, but I wanted to share the link to the pamphlet Responsibilities of Guardians in North Carolina, which is published by the NC Administrative Office of the Courts.
It provides a good summary of requirements and prohibited acts for guardians of minors and incompetent persons. However, it should not substitute for the counsel and services of an experienced guardianship attorney. In my view, it is important for ALL guardians to have a lawyer they can turn to to ask questions, prepare petitions and accountings, etc. The consequences of doing the wrong thing, or failing to do the right thing, are too great, and could even result in personal liability for the guardian.
Guardians should also be aware of the North Carolina Guardianship Association, which offers certification as a guardian and a guardianship manual.
Be back the week of October 19th...
Here's a change to North Carolina Guardianship law which took place October 1, 2008 that I didn't report earlier. North Carolina General Statute Section 35A-1251 was modified to allow a guardian of the estate to sell personal property up to $5,000 in value without a court order. The previous limit was $1,500. The limit applies in the aggregate to all personal property sold within an accounting period (generally one year).
Guardians must also get a court order before selling real property or spending principal belong to a ward. Income may be spent without court order, but all transactions must be reported in the accounting due each year.
While guardianship is unavoidable in some cases, the prior establishment of trusts and durable powers of attorney can avoid the time, expense and trouble of guardianship for most minors and incapacitated persons.
Clerks of Court, the ex officio judges of probate and guardianship matters in North Carolina Counties, can now order mediation in those cases. Parties to the proceedings can also request that mediation be ordered. See this memo on the Clerk Mediation Program from the North Carolina Court System website.
While I don't get involved in many contested matters, I have seen mediation work wonders. In many court systems, mediation is mandatory for civil proceedings. It can save time and money for the parties and help ease the crowded court dockets.
Hartford Fire Insurance Company has sued the Wake County, North Carolina Clerk of Court, alleging that the Clerk's office failed to properly oversee funds held in guardianships for three minor children. The court-appointed guardian transferred the funds to her personal account, causing the insurance company to have to make good on the guardians' bonds. See this article in the News and Observer for the full story.
This is a perfect example of why everyone, even young, working class folks, should make sure they have an estate plan in place. If this young woman had a will with a testamentary trust for her children, she could have named a responsible and knowledgeable trustee to handle the insurance money, avoiding the expense and other problems of guardianship. Instead, her children's financial future was left to chance.
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