The purpose of this article is to explain the powers and duties of a guardian of the estate of a disabled adult in Illinois. A guardian of the estate is a person appointed by the court to manage the financial affairs of a disabled or mentally incompetent adult. The guardian of the estate is distinguished from the guardian of the person, who is responsible for medical and other non-financial decisions on behalf of the disabled adult.
What Are the Powers and Duties of a Guardian of the Estate of a Disabled Adult in Illinois?
The powers of a guardian of the estate are established by the Probate Act (755 ILCS 5/11a-18). The guardian of the estate’s primary duty and power is to frugally manage the disabled adult’s finances and invest his or her assets. The guardian of the estate has the duty to use the assets of the estate for the comfort and “suitable support and education” of the ward and the ward’s dependent children. The guardian of the estate also has the power and duty to appear on behalf of the disabled adult in legal proceedings that affect the disabled adult’s finances.
What Types of Investments May a Guardian of the Estate Make Without Court Approval?
A guardian of the estate may make the following types of investments without obtaining court approval:
- Stocks, mutual funds, and common trust funds
- Insured accounts, deposits and certificates;
- Municipal or federal bonds, or any other investment guaranteed by the U.S. government;
- CDs;
- Real estate and loans secured by real estate;
- Corporate obligations;
- Life, endowment or annuity policies; and
- Illinois prepaid tuition contracts.
The guardian must obtain a court order to make other types of investments with estate funds.
What Actions of the Guardian of the Estate Require Court Approval?
While day-to-day financial management and investment actions can be taken by the guardian without getting specific approval from the court, certain actions by the guardian of the estate require court approval. These actions include, but are not limited to
- Making gifts;
- Transferring or disclaiming interests in property;
- Entering into contracts;
- Creating trusts for the disabled adult’s property that may extend beyond the life of the disabled adult;
- Certain changes to life insurance, annuities, and retirement plans;
- Changing the disabled adult’s residence;
- Changing the disabled adult’s will or trust;
- Leasing of real estate owned by the disabled adult prior to the court finding him or her to be disabled;
- Selling or mortgaging real estate or personal property.
How do Powers of Attorney Affect Guardianship of the Estate?
Powers granted by the disabled adult through a power of attorney executed while mentally competent prior to the adjudication of the disabled adult’s disability supersede any powers of the guardian of the estate.
What Reports Must a Guardian of the Estate of a Disabled Adult File in Illinois?
The guardian of the estate is responsible for filing several different types of reports with the court:
- Inventory: Within 60 days of being appointed guardian of the estate, the guardian must file an inventory. The inventory lists the assets of the disabled adult, including any rights of disabled adult to sue a third party. If any assets become known after the filing of this inventory the guardian of the estate has the duty to supplement the inventory.
- Accountings: Within 30 days of the one-year anniversary of being appointed guardian, the guardian of the estate must file an accounting, which details any receipts and disbursements made by the guardian of the estate, and includes supporting evidence showing the propriety of any disbursements. The evidentiary requirements for disbursements vary from county to county. The guardian bears the burden of proving that any disbursements were proper.
After the first accounting, subsequent accountings must be filed every three years unless an alternate timeframe is set by the court. An accounting must also be filed within 30 days after the guardian’s duty is terminated.
- Annual Budget: Although not statutorily required, the guardian or a third party may petition for an annual budget to be approved by the court. This provides some protection from liability for the guardian.
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