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A Guardianship is the name for a judicial proceeding in which someone is appointed by the court to look after the financial and/or personal affairs of another.

If a Response Team has not been formed, a Guardianship becomes necessary when a person becomes incapable of managing his or her money and property. A Guardianship is also necessary when the person is incapable of making decisions about living arrangements or health care.

How is a Guardianship Established?

Someone must petition a court to establish a Guardianship. The Court schedules a hearing to determine whether the person over whom the Guardianship is sought is legally incapacitated. Medical evidence of incapacity is usually required. If the judge decides that the person is legally incapacitated and in need of protection, the judge
may appoint a Guardian over the person’s finances (Guardian of the Estate) or the person’s personal decision-making (Guardian of the Person) or both. The Court then supervises the Guardian by requiring the Guardian to file an accounting of the assets of the protected person at least every two years. The Guardian is occasionally required
to submit certain other reports, and must obtain Court approval for major types of transactions, such as sales of real estate.

What Are a Guardian’s Duties?

A Guardian’s primary responsibility is to manage the protected person’s affairs in the best interests of the protected person. Generally, a Guardian may not use the protected person’s assets for the Guardian’s benefit. Conversely, one does not assume personal financial responsibility for the protected person by becoming Guardian. A Guardian of
the Person will have authority over personal and health care decisions such as consent to treatment and decisions about where the protected person will live. The rule that the Guardian must use the protected person’s assets for his or her benefit includes some provision for those persons who are still dependent on the protected person including a spouse and minor or incapacitated children. However, transactions which benefit the spouse often must have court approval. 

Who May Be a Guardian?

The Court can appoint any competent adult or an institution, such as a bank trust department, to serve as Guardian to manage the protected person’s affairs. Indiana law gives preference to the spouse, adult children, and other close relatives if they are willing to serve. If the protected person has previously stated a preference of the person to be appointed through a Will, Power of Attorney, or similar declaration, the Court will usually consider the protected person’s preference.

What Are the Advantages and Disadvantages of a Guardianship?

The primary advantage of a Guardianship is that it gives clear legal authority to someone to act on the protected person’s behalf. Third parties involved in legal business with the protected person will seldom challenge the authority of a court-appointed Guardian. Another advantage of guardianship is that the court acts as a supervisor of
the Guardian’s activities. This is designed to ensure that the Guardian will always act in the best interests of the protected person.

Court oversight can also be a primary disadvantage of a Guardianship, especially when the relationship between the protected person and the Guardian is close and beyond question. The reports to the Court and the restrictions on the Guardian’s actions can result in increased expenses for legal fees. The law also limits the flexibility of the Guardian to do financial planning with the protected person’s assets. Transfers of the protected person’s assets to another person will be permitted only in very limited circumstances.

How is a Guardianship Terminated?

A Guardianship is terminated when the protected person dies. It will also be terminated if the court determines that the protected person has regained competence. Furthermore, if the assets of the protected person reach such a low amount that there is no need for court supervision, the Guardianship can be terminated. Often in this situation,
the Guardianship of the Estate will be ended, but the Guardianship of the Person will continue to allow for authority to make personal decisions. If a Guardian dies or becomes incapacitated, the Court will appoint a successor Guardian.

Is a Guardianship Always Necessary for Decisions On Behalf of a Protected Person?

Under Indiana’s 1987 Health Care Consent Act, a medical provider may rely on the spouse, adult child, sibling, or other close relative of an incapacitated person for medical decisions without the establishment of a Guardianship. This Act also authorizes the creation of Health Care Powers of Attorney discussed in the preceding section. Thus, if the finances and property of the incapacitated person can be handled through a Durable Power of Attorney, Trust, or other legal planning arrangement, health care decisions may be made under the health care consent law and the need for Guardianship may be avoided. Advance planning which equips your Response Team with the proper legal tools can completely avoid the necessity of a Guardianship.

Our law firm routinely works with seniors and their loved ones to determine the best course of action, file the required paperwork and represent them in proceedings with the appropriate administrative agencies. We also work with the guardian to keep an up-to-date accounting of the estate. 

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10293 North Meridian Street, Suite 150, Carmel, IN 46290
| Phone: 317.817.0300

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