CHANCERY COURT FOR HAMILTON COUNTY, TENNESSEE oSO NOW YOU ARE A GUARDIAN OR CONSERVATORx (Form 081 Revised 7/1/2011) To help you perform your guardianship or conservatorship duties properly, the general duties and obligations are described herein. If you fail to meet your obligations under the law, you may be personally liable. This is intended to aid you and the COURT to properly serve the interest of someone who is at least partially incapacitated (your ward). However, this is neither a complete statement of current law nor is it intended to eliminate the necessity of your consulting with your attorney. The provisions in this document pertain primarily to the situation where the ward has property (assets) and you are the guardian or conservator of the property (as well as “of the person”). If there are no assets or if you are not responsible for the property (assets), then inventory, bond, and accountings will normally be waived. 1. BOND. 1.1 BOND PREMIUMS. Bond premium for the first year will usually have to be paid to get the bond issued. You are required to pay the premium each year thereafter, until bond is cancelled by Court Order. 1.2 CORPORATE SURETY STATEMENT. T.C.A. §34-1-111(c)(1)(D) requires all annual accountings filed with the COURT to include a statement from the corporate surety that the bond is in force for the next annual period. Forms for this purpose are available at this office and your local bonding agency should complete the form. 1.3 BOND COSTS. The expense for the cost of a surety bond may be paid out of the ward’s estate. You may be able to reduce the bond cost expense by placing excess funds of the ward into restricted deposits subject to withdrawal only on COURT order. This procedure will require COURT approval and an agreement signed by a financial institution. 2. LETTERS. 3. WARD’S MONEY & ASSETS. 3.1 FIDUCIARY STATUS. As a guardian or conservator, you are a fiduciary for your ward. Thus, you must handle their funds for their best interest. The law does not require perfection. However, you will be held accountable for failure to follow the COURT orders and, of course, any misapplication or misappropriation of a ward’s assets. After your appointment is approved by the COURT, you will be required to provide a surety bond before the LETTERS OF GUARDIANSHIP or LETTERS OF CONSERVATORSHIP can be issued. Unless the COURT makes other provisions, the bond will have to be in effect throughout the period you serve under the Letters. No guardian or conservator can undertake the administration of the estate of a minor or disabled person before the guardian or conservator has been issued LETTERS OF GUARDIANSHIP or LETTERS OF CONSERVATORSHIP. After your appointment is approved by the COURT, and your bond has been made, you will then obtain the appropriate Letters which authorize you to take possession of the assets of your ward, the person for whom you are guardian or conservator. You must immediately take possession of all of your ward’s money and other assets and make a detailed inventory (see paragraph 4 below). You should also check to find out if your ward is receiving all benefits that they are qualified to receive i.e.: Veteran’s benefits, Social Security or Supplemental Security Income (S.S.I.), Medicare or Medicaid. Once qualified for Medicaid, you MUST follow the rules and regulations associated with those benefits, so that your actions in managing the assets do not disqualify your ward from eligibility. You should determine what assets of the ward should be retained and which should be sold. However, without COURT approval, you may not sell, trade, lease, mortgage, pledge, transfer or discard your ward’s property, or change investments. This is true even if the ward is your child, parent or other close relative. As guardian or conservator, you may not spend the ward’s money, even for the ward’s benefit, without COURT approval. Again, this applies even if your ward is your child, parent or other relative. COURT approval may be obtained to allow you to spend a budgeted amount each month by submitting a Property Management Plan to be approved by the Chancellor, or a motion seeking permission for specific purposes. 1 American LegalNet, Inc. www.FormsWorkFlow.com If you have questions or concerns regarding handling of accounts, investments or benefits, contact your attorney for advice or file for instructions with the COURT. 3.2 RECORDS. Complete and accurate records must be kept of all money or other assets received and disbursed by you as guardian or conservator. A running list of receipts and expenses will be helpful. 3.3 ACCOUNTS. Checking accounts, savings accounts, certificates of deposit or other investment accounts should be placed in your name as guardian or conservator for your ward immediately after your appointment. All of your ward’s funds must be kept separate and apart from your own. There can be no joint ownership of accounts unless approved by the COURT. 3.4 GENERAL EXPENSES. You are usually authorized to spend the ward’s assets for the reasonable and necessary expenses of the ward, such as for doctors, nursing home, rent, medicines, food and clothing where such is directly charged to the ward. Do Not write checks for cash, withdraw cash from accounts or use credit cards or debit cards without Court approval! Where the expenses of the ward are mixed (such as where you provide food, room, etc. in your home to the ward), you shall be required to get approval of the COURT as to the amounts that will be allowed on a continuing basis. 3.5 GUARDIAN OR CONSERVATOR EXPENSES. If you have prior COURT approval for your fees and expenses, you may withdraw funds from the ward’s assets in strict compliance with the order. You may likewise petition the COURT for guardian (or conservator) fees at the end of an account period but only after you have properly filed your annual accounting and it has been approved. 3.6 ATTORNEY FEES & EXPENSES. You may use your ward’s funds to pay for your attorney’s services, or account fees only after COURT approval. 3.7 INVESTMENTS. The ward’s funds should be invested to earn income, but may only be invested in accordance with law. Losses from unauthorized or imprudent investments may render you personally liable. If there is a question about investments that are being considered, check with the COURT. The following investments generally ARE NOT considered in the best interest of the ward: • Life insurance policy on the life of the ward, with the Guardian/Conservator being the beneficiary/owner. Paid-up life insurance policies do not pay enough of a return on funds. • Stocks are speculative and unless great care is used, the ward can lose money, and you may be held liable for the loss. • Real estate is not generally considered a good investment in this circumstance, and must have Court approval. • 3.8 SEPARATE ACCOUNTS FOR WARDS. If you are a guardian or conservator for more than one ward, keep separate accounts for each. If a disbursement is permitted on behalf of all wards, it should be charged against each ward individually. 4. INVENTORIES. You must immediately take possession of all your ward’s money and other assets and make a detailed inventory. The inventory has to be filed with the COURT no later than sixty (60) days after your appointment. See Appendix ‘A’ This must be filed even though a preliminary inventory might have been filed with the petition seeking a guardian or conservator. 4.1 SUPPLEMENTAL INVENTORY. After the inventory has been filed, any assets or sources of income which for any reason have been overlooked MUST be reported in a supplemental inventory. 2 American LegalNet, Inc. www.FormsWorkFlow.com 4.2 INVENTORIES. The law requires an inventory every year. However, if you provide this information on the accounting each year, you can avoid the extra expense of a separate inventory. 5. ACCOUNTINGS. 5.1 WAIVER OF ANNUAL ACCOUNTING. Accountings may be waived by the COURT if: Each year at the anniversary of your appointment you are required to prepare an accounting showing in detail all income and disbursements for the year. The accounting is due within 60 days after each anniversary of your appointment. [T.C.A. §34-1-111(a).] The expenditures will have to be substantiated by check, voucher or receipt (unless prior approval has been received for cash payments) and explained. Receipts from an incompetent are invalid to substantiate expenditures. The accounting must show assets at the beginning of and at the end of the accounting period. See Appendix ‘B’ –Instructions & Outline for Annual Accountings. • (1) the fiduciary holds no property and the ward receives only minimal fixed periodic payments and the ORDER applies all the payments to the benefit of the ward [T.C.A. §34-1-111(h)(1).] OR • 5.2 (2) the accounting cost would exceed 25% of income produced by property held by the fiduciary [T.C.A. §34-1-111(h)(2).] TIME EXTENSION. With good cause, the COURT may extend the time for the accounting. [T.C.A. §34-1- 111(b).] 5.3 the ANNUAL ACCOUNTING. Each year, when the annual accounting is filed, the accounting must contain: Sworn, itemized listing of receipts and expenditures/disbursements made during the period for accounting [T.C.A. §34-1-111(c)(1).] Detail the property held by the fiduciary at the end of the period [T.C.A. §34-1-111(c)(1).] Attach: ♦ The Original of each bank statement, brokerage statement or other document reporting any financial information. [T.C.A. §34-1-111(c)(1)(A).] ♦ The Original Cancelled Checks or “Substitute Checks” written on the fiduciary account. Substitute Checks provided by financial institutions MUST be substantially the same size as the original checks – and copies of front and back must be provided. Banks are exempt from this if they are the fiduciary. [T.C.A. §34-1-111(c)(1)(B).] If you presently have a Conservatorship or Guardianship account at a bank with a policy of sending only “Image Statements” (copies of the front only of checks), notify the bank that “Substitute Checks” are required to be given to the Court with your accounting each year. [T.C.A. §34-1-111(c)(1)(B).] and [T.C.A.§34-1-130]. It is your responsibility to provide all items required by law. Since the Check 21 Act has been passed, it will be your responsibility to inform the bank regarding the form needed for your checks in your bank statements. Therefore, contact your bank immediately. There are also some credit unions which have not been returning checks to Conservators and Guardians. These accounts cannot be used unless “Substitute Checks” can be provided to you. A Copy of the previous year’s U.S. and Tennessee income tax returns, or reasons why none ♦ is required. [T.C.A.§34-1-111(c)(1)(C).] ♦ Statement by corporate surety that bond is in force for the next accounting period. [T.C.A. §34-1-111(c)(1)(D).] A Corporate Surety form will be sent to you with your reminder notice each year. Contain a statement concerning the physical or mental condition of the disabled person [T.C.A. §341-111(c)(2).] The statement shall report on the condition/location of your ward. You must include the following information in this report: 3 American LegalNet, Inc. www.FormsWorkFlow.com • • • Physical and mental condition of ward, including any significant changes during the reporting period Where the ward is located and the name of the caregiver A statement demonstrating to the COURT the need, or lack of need, for the continuation of the Conservatorship/ Guardianship EVEN IF THE ANNUAL ACCOUNTING IS WAIVED, THIS REPORT ON THE CONDITION/LOCATION OF YOUR WARD IS STILL REQUIRED. WE DO NOT CHARGE FOR FILING THIS REPORT. 5.4 EXHIBITS. Original bank statements, original cancelled checks or substitute checks and other exhibits filed with the COURT can be picked up at this office after two (2) years. We will maintain two (2) years’ records in our file. Notification will be sent periodically that Exhibits are to be released. If Exhibits are not picked up, they may be destroyed after 90 days. 6. OTHER RELEVANT INFORMATION. 6.1 COURT APPROVAL. COURT approval or COURT orders are those that are signed by the Chancellor. 6.2 NOTICE OF DEATH OF WARD. If your ward dies, you have a duty to notify the COURT of such death in writing as soon as possible. You will have 120 days from the date of death to file your Final Accounting. 6.3 CHANGE OF ADDRESS. If you or your ward change addresses, you have a duty to notify the COURT of such new address in writing as soon as possible. 6.4 RESTRICTED ASSETS. In certain cases when assets will not be needed for the ward’s support, they may be restricted and no annual accounting is then required until the guardianship or conservatorship is terminated. However, an Annual Report on the condition of the ward will be required. Check with your attorney. 6.5 LOCATION OF WARD. If you are guardian or conservator for an incompetent person, a most important duty will be to place your ward where he or she will receive care and treatment appropriate to his or her condition, and in the least restrictive environment. 6.6 REPORT REQUIREMENTS. You may have an agreement with your attorney to notify you when reports are due. Such may be helpful to you. However, the law places the duty upon you to make proper and timely reports. 7. TITLE 34 GUARDIANSHIPS – ESTATES OF INCOMPETENTS. The law pertaining to guardians and conservators is generally found: T.C.A. §34-1-101 — §34-1-131 GUARDIANSHIPS AND CONSERVATORSHIPS T.C.A. §34-2-101 — T.C.A. §34-3-101 — §34-1-106 GUARDIANSHIP GENERALLY §34-3-109 CONSERVATORSHIP GENERALLY T.C.A. §34-5-101 T.C.A. §34-6-101 T.C.A. §34-6-201 T.C.A. §34-7-101 T.C.A. §34-8-101 §34-5-122 UNIFORM VETERAN’S GUARDIANSHIP LAW §34-6-109 UNIFORM DURABLE POWER OF ATTORNEY ACT §34-6-216 DURABLE POWER OF ATTORNEY FOR HEALTH CARE §34-7-105 PUBLIC GUARDIANSHIP FOR THE ELDERLY §34-8-503 UNIFORM ADULT GUARDIANSHIP AND PROTECTIVE GENERALLY — — — — — PROCEEDINGS JURISDICTION ACT 4 American LegalNet, Inc. www.FormsWorkFlow.com 8. Some Do’s & Don’ts. As a Guardian or Conservator, you are a fiduciary, entrusted with the care of someone else’s property (trust). The following DO’s and DON’TS are some of the basic rules which you should follow to properly and conveniently perform your duties. 8.1 DO. • Take immediate control of your ward’s assets, set up Conservator/Guardianship accounts and make appropriate investments within 45 days. • Check to find out if your ward is receiving all benefits that they are qualified to receive. • File an inventory within 60 days, unless waived by the Court. A form is attached. • Use Conservatorship/Guardianship checking account for all money paid out. Your canceled checks are the best record of how you have spent the money – and Original Cancelled Checks or “Substitute Checks” will be required with your annual accounting. • Keep accurate records of all receipts and disbursements. • Make all deposits of income in a timely manner. ‘Direct Deposit’ income when possible. • Obtain written Court approval BEFORE you pay out any substantial monies or dispose of any property or change any investments. • Consult with your attorney on any matters of uncertainty for help and advice. • Notify the Court IMMEDIATELY regarding changes in address for you or the ward. • Notify the Court IMMEDIATELY in the event your ward dies. 8.2 DON’T. • Don’t treat the property as your own -- even if you are an heir or relative. IT IS NOT YOURS until the Court and the law says it is. Keep the assets separate from yours. Not doing so could be a criminal offense. • Don’t spend any substantial amounts without the Court’s written approval. • Don’t purchase life insurance on the life of the ward. • Don’t sell, trade, lease, mortgage, pledge, transfer or discard your ward’s property, or change investments without court approval. • Don’t write checks for cash, withdraw cash from accounts, use debit cards or credit cards without specific Court approval. • Don’t delay in making reports to the Court. Failing to file inventories and accountings in a timely manner could result in severe action by the Court and your removal as Conservator/Guardian. • Don’t be afraid to ask your attorney for advice and guidance. It will help make the work easier for both of you. 5 American LegalNet, Inc. www.FormsWorkFlow.com “APPENDIX A” PART IN THE CHANCERY COURT FOR HAMILTON COUNTY, TENNESSEE IN THE MATTER OF INVENTORY FILE N0. WARD I, ________________________________, CONSERVATOR/GUARDIAN Guardian Conservator for the Ward respectfully NAME report that the assets of the Ward’s estate have come into my hands, and are listed as follows: ___________________________________________________________________________ ___________________________________________________________________________ ______________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________ I SOLEMNLY SWEAR that this list is a full, true, and perfect inventory of all the goods, chattels, rights, and credits of the Ward’s estate which have come to my knowledge or possession, or into the hands and possession of any person for me, to the best of my knowledge and belief, so help me God. STATE OF TENNESSEE COUNTY OF HAMILTON } } Sworn to and subscribed before me, ______________________________________ Signature of Conservator/Guardian ______________________________________ Address this _____ day of ______________, 20__. __________________________________ Notary Public ______________________________________ Attorney My commission expires: ____________ ______________________________________ 6 American LegalNet, Inc. www.FormsWorkFlow.com SOME HELPFUL INFORMATION: YOUR INVENTORY SHOULD INCLUDE: 1. Cash on Hand 2. Money on Deposit – with Bank Name, Account Number and Balance in Account 3. Stocks and Bonds – with detail listing, including Investment Company, if applicable 4. Monthly Income – Source and amount received 5. Household furnishings of value – NOT a complete listing of all cups, saucers, etc. 6. Interest in business 7. Insurance payable to Estate 8. Notes Payable to Ward and Debts owed by the Ward 9. Farm products/ livestock/ equipment 10. Automobiles and Trucks – model and approximate value 11. Boats, Recreational Vehicles 12. Jewelry, Collectibles or other personal property of value 13. Real Estate – with address, ownership information and value Your Inventory must be signed by Conservators/Guardians and MUST be notarized. This can be done in our office, if the form is brought here and then signed. NOTE: Your Inventory should be sent to all the next-of-kin who were listed in the original pleadings and/or added at any time. Please attach a “Certificate of Service” (like the one on the following page) to your Inventory and list all those who have been sent copies. 7 American LegalNet, Inc. www.FormsWorkFlow.com Docket No: CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing INVENTORY OF ASSETS has been placed in the United States Mail addressed to: List all next-of-kin – names and addresses This the _________ day of ______________20____. ______________________________ Conservator This form indicates that you have mailed a copy of the INVENTORY to all family members Attach Certificate of Service to your Inventory (Form 081, Rev. 7/1/11) 8 American LegalNet, Inc. www.FormsWorkFlow.com “APPENDIX B” INSTRUCTIONS AND OUTLINE FOR AN ANNUAL ACCOUNTING STEP 1. START WITH BEGINNING BALANCE. This amount should be the monies and other assets turned over to you when you were appointed Conservator or Guardian; STEP 2. LIST EACH DEPOSIT AND INCOME RECEIVED. These should include all social security benefits, VA benefits, interest from all sources, dividends, gifts, etc. Each receipt should be listed individually, by date, payer and amount; STEP 3. TOTAL THE INCOME; STEP 4. ADD THE BEGINNING BALANCE AND THE INCOME. This gives you the TOTAL CHARGE for the accounting period; STEP 5. LIST ALL DISBURSEMENTS. This should be every check written, the date, to whom and the amount. Be sure to also include service charges, check charges or any other bank withdrawals. Transfers may be listed, but should not be included in the totals; STEP 6. TOTAL THE DISBURSEMENTS; STEP 7. SUMMARIZE THE TRANSACTIONS IN THE FOLLOWING FORM: Beginning Balance __________________________ Total Income + __________________________ TOTAL CHARGE __________________________ Total Disbursements ENDING BALANCE STEP 8. - __________________________ __________________________ THE ENDING BALANCE. This should match the balance on the ending bank statements. This ENDING BALANCE should then be broken down into the various amounts in your accounts and state the bank where these assets on hand are deposited, such as: The Local Bank - Checking The Local Bank - Savings The Other Bank - CD #123 500.00 1,000.00 10,000.00 STEP 9. SEND ALL EXHIBITS WITH THE ACCOUNTING. You must submit all of the original bank statements and the original cancelled checks or “substitute Checks”. Where Certificates of Deposit have not matured, you will need to ask the bank to give you a printout detailing the account for the accounting period. STEP 10. SUBMIT REPORT ON THE CONDITION AND LOCATION OF YOUR WARD. This report should include information regarding the physical and mental condition of the ward, any significant changes during the reporting period, where the ward is located, who is the caregiver and a statement which demonstrates whether the Conservatorship or Guardianship should be continued. STEP 11. SUBMIT A STATEMENT FROM YOUR CORPORATE SURETY. Attached to the Notice to file your accounting will be a form which your surety will need to complete, and this form must be submitted with your accounting. STEP 12. MAKE SURE THERE IS A SWORN STATEMENT WITH YOUR ACCOUNTING – EITHER A NOTARIZED STATEMENT OR SWORN IN FRONT OF THE COURT CLERK. [Form 035, Rev. 2011) 9 American LegalNet, Inc. www.FormsWorkFlow.com