Central PA Law Offices
Guardianship is a legal relationship which authorizes one individual to act as substitute decision maker for another. Guardianship arises in two different situations: (1) when a person is an adult and becomes incapacitated; and (2) when a person is a minor and the minor’s parents (the natural guardians) are dead or incapacitated. In Pennsylvania, both types of guardianship are created by order of the Court of Common Pleas, Orphans’ Court Division.
An incapacitated person is an adult whose ability to receive and evaluate information effectively and to communicate decisions in any way is impaired to such a significant extent that he is partially or totally unable to manage his financial resources or to meet essential requirements for his physical health and safety.
Limited and Plenary Guardians
Whenever the Orphans’ Court determines that an adult individual is incapacitated, it can appoint a guardian for his person (health care, residential and other non-financial issues) and/or his estate (real estate, investments and other financial issues). If the Orphans’ Court determines that the individual is totally incapacitated, then it will appoint a plenary guardian with the full powers authorized by law. If the Orphans’ Court determines that the individual is only partially incapacitated, then it will appoint a limited guardian with specific powers described in the court order.
Guardianship proceedings are costly and administratively burdensome compared to the alternatives described below. The most serious drawback of a guardianship is the lack of flexibility in its administration. A guardian is responsible to the Orphans’ Court and must file annual reports documenting the financial and personal status of the incapacitated individual. A guardian has less flexibility than a trustee or power of attorney when making investment decisions, and a guardian must obtain court approval to perform estate planning on behalf of the incapacitated individual.
A Revocable Trust and a Durable General Power of Attorney (see “Estate Planning” practice area) both provide an efficient and flexible means of conserving the property of an adult individual, without the appointment of a guardian. These alternatives are less costly to establish and maintain than a guardianship. However, the individual must be able to understand the trust and power of attorney documents and must voluntarily sign them.
When parents die, a guardian can be named for their minor children in the parents’ wills. Although this nomination is not binding on the Orphans’ Court, the court typically follows the parents’ wishes unless there are compelling reasons not to do so. The parents can also appoint a trustee in their wills. A guardian is not the same as a trustee. The guardian cares for the personal affairs of the minor children while the trustee manages the investments held for the minor children. The same person can serve as both guardian and trustee for minor children, but the courts prefer that these roles be separated to avoid the inherent conflict of interest.