Duty 2: Manage Martin's money and property carefully

As Martin’s guardian of the estate, you might pay bills, oversee bank accounts, or pay for things he needs. You might also make investments, pay taxes, collect rent or unpaid debts, get insurance if needed, cancel any unneeded insurance, and do other things in the guardianship order.

You have a duty to manage Martin’s money and property very carefully. Use good judgment and common sense. As a fiduciary, you must be even more careful with Martin’s money than you might be with your own!

Follow these guidelines strictly according to the court’s procedures:

• File a bond and take an oath. A bond is a special type of insurance policy that is required so the court can make sure you carry out your duties. You will have to file a bond in court within 20 days of being appointed as guardian. If you fail in your duties and, as a result, money is lost or stolen, the bonding company will pay the money back. Then the company will try to collect the money from you. You can pay for the bond with Martin’s money.  
  
  Only people with good financial records and credit histories can get a bond. If you have had a bankruptcy, you will not likely be able to get a bond.  Try to check this before you are appointed as guardian of the estate or as soon as possible. Take all steps the court advises about getting a bond.
  
  You will also be given an oath, by which you will swear to discharge your guardianship duties faithfully. Once you have taken the oath and once the court has approved the bond, you will officially be the guardian of Martin’s estate.  This date—known as the “qualification date”—is important, as many deadlines are calculated from this date. You will at that point be issued letters of guardianship.
• Make an inventory and file it with the court. To make careful decisions, you need to find out what Martin owns and owes. You will have 30 days from the day you officially become guardian to file a full, detailed inventory listing all of Martin’s income and property and its appraised value. You must attach to that inventory a detailed list of debts or liens others have claimed against Martin’s property. To avoid any risk to Martin’s money and property, you must make the inventory as quickly as possible. Be ready to share it with family members who are listed with the court as interested parties.
  
  An inventory may include all kinds of property. A list of claims and debts might include unpaid credit card bills and other outstanding loans. Your list might include: 
   
  • checking and savings accounts;
  • cash;
  • pension, retirement, annuity, rental, public benefit, or other income;
  • real estate;
  • cars and other vehicles;
  • insurance policies;
  • trusts for which Martin is a beneficiary;
  • stocks and bonds; and
  • jewelry, furniture, and any other items of value.
• Provide notice of the guardianship to Martin’s creditors. Within one month of officially becoming guardian, you must post a notice in a newspaper so that anyone to whom Martin owes money can contact you to settle those claims. Once you have done so, you must file a copy of the notice in court. Within four months of officially becoming guardian, you must send notice of the guardianship to whoever holds a mortgage or lien on any of Martin’s real estate, and to anyone else to whom Martin owes money.
• Protect Martin’s property. Take possession of Martin’s property and keep his money and property safe. Have Martin’s income and bills sent to you. Put his valuable items in safe deposit boxes and lock other items he is not using in storage. Keep Martin’s cash in bank accounts that earn use as he pleases if the court order allows you to do so. If it does not, you can ask the court for permission within 30 days of officially becoming guardian. If you spend more than the monthly allowance, ask the court to approve the excess expenses. Think about any special expenses that may arise, such as dental work or any medical care or equipment that Medicare, Medicaid, or other health insurance will not cover. Try to stick to your budget. If something very costly occurs, you may need the court to approve the expense.
• Make a financial plan. Make a budget as if you were making one for your own household. List how much you expect to pay for a nursing home, assisted living or home care, rent, food, medical care, and home maintenance or repair. Be sure to include a monthly amount for Martin to use as he pleases if the court order allows you to do so. If it does not, you can ask the court for permission within 30 days of officially becoming guardian. If you spend more than the monthly allowance, ask the court to approve the excess expenses. Think about any special expenses that may arise, such as dental work or any medical care or equipment that Medicare, Medicaid, or other health insurance will not cover. Try to stick to your budget. If something very costly occurs, you may need the court to approve the expense.
• Invest carefully. You have a duty to invest any extra money Martin has. Within 180 days of officially becoming guardian, you must either begin investing Martin’s extra money or develop a written investment plan. In making investment decisions, you must exercise the same care you would use in managing your own financial affairs. You must also consider other factors like:
  • the anticipated costs of supporting Martin;
  • Martin’s age, education, income, and ability to earn income;
  • the nature of Martin’s estate;
  • and any other resources available to Martin.
• To be sure you meet this standard, you should consider investing only in safe investment options like government bonds or deposit accounts insured by the Federal Deposit Insurance Corporation (“FDIC”). If you are making investments for Martin, talk to a financial professional. The Securities and Exchange Commission (“SEC”) provides tips on choosing a financial professional in this Investor Bulletin. Discuss your choices and goals for investing based on Martin’s needs and values.
• Pay all taxes on time. You are now responsible for paying Martin’s taxes from his money. You must notify the IRS of the guardianship by filing a Form 56. You must file his federal income tax return and take care of any other taxes for which Martin may be responsible, including any applicable gift tax and property taxes due on any real estate he owns.
• Pay all bills on time. Make sure bills are sent to you. Review bills and bank statements promptly.
• Buy insurance if necessary and cancel any insurance policies that Martin does not need.
• Collect any rent or debts owed to Martin. Find out if anyone owes Martin money, and try to collect it. If you do not, you may be personally liable. If a lawsuit is necessary to collect Martin’s money, you are the person who must bring the suit. You might need the court’s permission to bring such a suit.
• There’s no place like home. You will need the court’s permission to sell any real estate Martin owns. You may, however, rent out his property for a term of one year or less without court permission, if doing so is in the best interest of Martin’s finances. If you do so, you must file a report with the court (generally within 30 days) describing the property, its value, and the terms of the rental.
  
  Martin may want to continue to live in the home he owns or rents. In that case, determine if living in his home is safe and if Martin can manage in the house. If needed, put in guard rails, grab bars, smoke detectors, extra lighting, and other things to help him stay at home. Tax credits or deductions might be available if you make the home easier to live in, but you should talk to an accountant or an attorney before claiming a credit or taking a deduction. Work with any other decision-makers (such as an agent under a medical power of attorney or any guardian of the person if you have not been appointed to fill this role).
  
  If it is not safe to live at home even with changes—or if Martin wants to move—consider other places that meet Martin’s needs. Try to keep him connected to people and things important to him. Options might be living with someone else or living in a retirement community, a senior apartment, group home, assisted living, or nursing home. You may need court approval for a move, a 7-day period to allow objection may be necessary, and you may be required to notify certain family members.

Can Martin get any benefits?

Find out if Martin is eligible for any financial or healthcare benefits from an employer or a government. For instance, you could help Martin apply for other private benefits such as employer pensions or disability, or public benefits such as Medicaid, housing assistance, or food stamps (now known as Supplemental Nutrition Assistance Program or “SNAP”). Use the National Council on Aging benefits check-up at BenefitsCheckUp.org.

The Area Agency on Aging where Martin lives can help you find information. Find the local Area Agency on Aging through the Texas Health and Human Services Commission at hhs.texas.gov/services/aging.
 

Medicaid is complicated.

Get legal advice and be very careful about decisions that may affect Martin’s eligibility for Medicaid, especially before you sell Martin’s home or sign anything that affects Martin’s ownership of his home. The Medicaid program provides medical assistance and long-term care to low-income people. For more information, visit: hhs.texas.gov/services/health/medicaid-chip. To apply for Medicaid visit yourtexasbenefits.com.