You've been appointed guardian of a loved one's estate due to their legal incapacity. Your primary obligation to your ward is to manage their estate for their best interests, but what exactly does that mean? Are there any actions you're specifically required to take? How much discretion do you have, and under what circumstances are you required to ask for probate court permission to take an action on behalf of your ward?
These are questions many Ohio residents have when they suddenly find themselves responsible for another person's finances. Whether you are taking charge of the estate of an elderly parent with dementia or a sibling or adult child with a traumatic brain injury, here are some things you must understand about managing the estate of a ward in Ohio.
If your ward has cash assets, you are required to deposit those funds into an interest-bearing account in a bank or savings and loan association located within the state of Ohio. If your ward is fortunate enough to have money in excess of what is needed to pay current obligations, you must invest those funds on their behalf. There is a variety of permissible investments, including municipal, state, and federal bonds; savings accounts; certificates of deposit; annuities, and more.
Failure to invest the funds in an acceptable manner within a reasonable time can result in personal liability for you, the guardian. If the probate court determines that you failed to meet this obligation, you could be held liable for any loss of interest that the funds would have earned but for your negligence.
As guardian, you are also responsible for the management of any real property owned by your ward. You may mortgage real estate owned by your ward with the advance permission of the probate court. You may also, with probate court permission, purchase real property for the ward. If you do this, the property must be titled in your ward's name.
It's unlikely that you'll need to deal with dower issues, but if you do, know that Ohio law grants guardians the right to "sell, compromise, release or adjust the ward's right of dower" with the probate court's approval. Dower is an interest in real estate that is designed to protect the rights of a spouse who does not hold title to the property. If your ward has title to real property by tax title only, you are authorized by Ohio law to quitclaim the ward's title to the person who is entitled to redeem the real property.
In Ohio, guardians of the estate may also complete the ward's contracts for the lease or sale of real estate. If you wish to lease the property for a term of three years or less, you do not need to apply for probate court approval. However, if the term of the lease is to exceed three years, you must receive a grant of authority from the probate court. In the event that you want to lease the real property for the purpose of drilling, mining, or mineral extraction, you must also get the court's permission.
Admittedly, few guardians are in a position to lease their ward's property for mining or oil drilling. But a much more common scenario is the need to make improvements to the ward's property. If you wish to make improvements, you must also apply to the probate court for authority to do so. The court may require reports as to whether the proposed improvements are likely to be beneficial to the ward's estate, and can set limits as to the resources allowed for the improvement.
What else are you authorized to do in management of your ward's estate? You are permitted to open the ward's safe deposit box, exercise stock options, and surrender a life insurance policy of the ward for its cash value (or elect options under insurance or annuity policies). You can convey your ward's interest in real or personal property, whether that interest exists in the present, or is a future or contingent interest. You may also create revocable trusts for your ward's property, and enter into contracts so long as these do not extend beyond the disability or life of your ward. Essentially, you have all the powers to manage property that your ward would have if he or she were not disabled, except the power to make a will for the ward. However, you are answerable to the probate court for any actions you take on the ward's behalf.
If you have questions about how to manage your ward's estate, schedule a consultation with an experienced Ohio guardianship attorney.
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