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GUARDIANSHIP OF AN INDIVIDUAL WITH DEVELOPMENTAL DISABILITY

Michigan's Mental Health Code provides for the appointment of a plenary guardian of an individual if found by clear and convincing evidence that he/she is developmentally disabled and totally without capacity to care for himself or herself or his/her estate. The Mental Health Code provides for the appointment of a partial guardian if found by clear and convincing evidence that he/she is developmentally disabled and lacks the capacity to do some, but not all, of the tasks necessary to care for himself or herself or his/her estate. A developmental disability is defined as either of the following:

  1. An individual older than 5 years with a severe, chronic condition that meets all of the following:
    1. Attributable to a mental or physical impairment or combination of physical and mental impairments.
    2. Is manifest before the individual of 22 years of age.
    3. Is likely to continue indefinitely.
    4. Results in substantial functional limitations in 3 or more of the following areas of major life activity:
      1. Self-care
      2. Receptive and expressive language
      3. Learning
      4. Mobility
      5. Self-direction
      6. Capacity for independent living
      7. Economic self-sufficiency
    5. Reflects the individual's need for a combination and sequence of special, interdisciplinary, or generic care, treatment, or other services that are of lifelong or extended duration and are individually planned and coordinated.
  2. An individual from birth to age 5, with a substantial developmental delay or a specific congenital or acquired condition with a high probability of resulting in development disability as defined in (1.) if services are not provided.

What are the purposes of guardianship?

The guardianships for individuals with developmental disabilities shall be:

  1. Utilized only as is necessary to promote and protect the well being of the individual, including protection from neglect, exploitation and abuse;
  2. Designed to encourage the development of maximum self-reliance and independence in the individual; and
  3. Ordered only to the extent necessitated by the individual's actual mental and adaptive limitations.

If the Court determines that some form of guardianship is necessary, partial guardianship shall be the preferred form of guardianship for an individual with a developmental disability.

Who may petition for appointment of a guardian?

A petition for appointment of a guardian for an individual who has been allegedly diagnosed as developmentally disabled may be filed by any interested person or entity, or by the individual. Petition for Appointment of Guardian, Individual with Alleged Developmental Disability (Form PC658). It may be filed at the Probate Court of the county of residence of an individual with the alleged developmental disability or with the county in which an individual with alleged developmental disability was found if a county of residence couldn't be determined. See Addresses/Phone Numbers for contact information or Maps for directions. Such a petition generally needs to be filed and a guardian appointed when the individual reaches the age of majority because a parent can no longer make decisions on the individual's behalf.

The guardianship process

Kalamazoo Community Mental Health and Substance Abuse Services generally provide input and evaluations to determine the need for guardianship services for an adult alleged to be developmentally disability. The family many times has had some contact with Community Mental Health, and the need for the appointment of a guardian becomes known when the individual nears the age of 18. Community Mental Health and Substance Abuse Services Access Center at 1-888-373-6200 or locally at (269) 373-6000, assists families with questions about guardianship services for individuals with developmental disabilities by directing them to the appropriate department within Community Mental Health. Community Mental Health then arranges for and/or conducts the required evaluations and makes recommendations to the court. Their offices are located at 418 W. Kalamazoo Ave., Kalamazoo, Michigan, 49001.

The Petition For Appointment Of Guardian, Individual with Alleged Developmental Disability must be accompanied by a Report to Accompany Petition to Appoint, Modify or Discharge Guardian of Individual with Developmental Disability (Form PC659) which includes an evaluation of the mental, physical, social, educational, adaptive behavior and social skills of the person. The name and title of the person performing such evaluations and the dates performed (which must be within one year of the date of filing the petition) must be included on this report and, in addition, a list of all psychotropic medications, as well as any and all other medication that the individual is receiving on a continual basis that may or may not affect behavior.

When a petition for appointment of a guardian of an individual alleged to be developmentally disability and the accompanying report are completed, the petitioner, who may be assisted by Community Mental Health and Substance Abuse Services Access Center, will bring these documents to the Kalamazoo County Probate Court, 150 E. Crosstown Parkway, Kalamazoo, MI 49001. The petition and accompanying report will be reviewed for completeness and compliance with the Mental Health Code. If the report does not accompany the petition, the Court will order appropriate evaluations to be performed by qualified persons who may be employees of the state, the county, Community Mental Health and Substance Abuse Services, or the Court. The Court may order payment for evaluations of an individual with an alleged developmental disability by a public agency that serves the developmentally disabled. A date for hearing on the petition will be scheduled within 30 days from the date of filing the petition. The Court will appoint legal counsel for the respondent and will appoint Community Advocates for Persons with Developmental Disabilities as guardian ad litem to represent the best interests of the individual. Unless the petitioner is represented by private counsel, the Court, or petitioner at the direction of the Court, will prepare the necessary legal documents and notices, and cause them to be served on interested persons. An individual with an alleged developmental disability in guardianship proceedings has the right to:

  1. A jury trial;
  2. Present evidence and to confront and cross-examine witnesses;
  3. A closed hearing;
  4. To present at all proceedings; and
  5. To secure an independent evaluation at his/her own expense, or at the expense of the state if the alleged individual with developmental disability is indigent.

The guardian ad litem will visit with the individual with alleged developmental disability and make a report to the Court, either in writing or in person on the day of hearing. A Notice of Right to Request Dismissal of Guardian or Modification of Guardianship Order (Form PC661) is served on the ward, usually by the guardian ad litem. This notice informs the ward about his/her rights regarding future requests for modifications or the dismissal of the guardianship.

If the Court, after a full hearing and testimony, determines that a guardian is required, the appointment will then be made. The guardian must provide an Acceptance of Appointment (Form PC571) or bond, so Letters of Guardianship of Individual with Developmental Disability (Form PC662) can be issued. A guardian appointed by the Court shall not have the power, unless specified by Court order, to place an individual with developmental disability in a facility.

It is a good idea to nominate a standby guardian at the time of filing the petition. The Court can make a determination during the hearing and appoint the standby guardian, who would then also file an Acceptance of Appointment (Form PC571). In case of emergency and the guardian is unable to act, the standby guardian is then in place to make important decisions concerning the ward.

Who may be appointed guardian?

The Court may appoint as guardian for an individual with a developmental disability any suitable individual or agency, public or private, including a private association capable of conducting an active guardianship program for an individual with a developmental disability. The Court shall not appoint the Department of Mental Health as guardian or any other agency, public or private, that is directly providing services to the individual with developmental disability unless no other suitable individual or agency can be found.

Before the appointment, the Court shall make a reasonable effort to question the individual concerning his or her preference regarding the person to be appointed as guardian, and any preference indicated shall be given due consideration.

What is the guardian's responsibility after appointment?

To the extent ordered by the Court, the guardian has the following duties:

  1. Custody of the ward;
  2. Make provisions from the ward's estate or other sources for the ward's care, comfort and maintenance;
  3. The duty to make a reasonable effort to secure for the ward training, education, medical and psychological services, and social and vocational opportunities that are appropriate and as will assist the ward in the development of maximum self-reliance and independence;
  4. Within 63 days of the appointment, the plenary guardian of the estate must: a) file with the Court a complete Inventory (Form PC577) of the ward's assets; b) provide the ward with a copy of the Inventory; c) provide the ward's presumptive heirs with a copy of the Inventory; and d) provide the parent or guardian with whom the individual resides a copy of the Inventory (MCR 5.409);
  5. The guardian of the individual, plenary or partial, shall file with the Court at intervals ordered by the Court, but not less often than annually on the anniversary date of appointment, a report which shall contain statements about the ward's current mental, physical and social condition, living arrangements, treatment programs, medical, educational, vocational and other professional services given to the ward, and also a list of the guardian's visits with and on behalf of the ward. The Report of Guardian on Condition of Individual with Developmental Disability (Form PC663) and a booklet concerning their preparation are available at the Probate Court office by calling (269) 383-8666.

When may a guardian be discharged or have his/her duties modified?

A guardian for an individual with developmental disabilities may be discharged or have his/her duties modified when the individual's capacity to perform the tasks necessary for the care of his/her person in the management of his/her estate have changed so as to warrant modification or discharge. The individual with developmental disability, the person's guardian, or any interested person on his/her behalf may petition the Court for a discharge or modification order. A request if made by the individual with developmental disability, may be communicated to the Court by any means, including oral communication or an informal letter. Upon receiving this communication, the Court shall appoint a suitable person to prepare and file with the Court a petition reflecting the communication. Upon receipt of this petition, the Court shall conduct a hearing.

Upon conclusion of the hearing, the Court may do any of the following:

  1. Dismiss the petition;
  2. Remove the guardian and dissolve the guardianship order;
  3. Remove the guardian and appoint a successor;
  4. Modify the original guardianship order;
    or
  5. Make any other order, which the Court considers appropriate and in the interest of an individual who is developmentally disabled.

GENERAL INFORMATION

A. Fiduciary - Guardians of estates are particular types of "fiduciaries." The word "fiduciary" is a derivative from the Latin word "fides" meaning faith, honest or honor. A fiduciary is one appointed who has a duty to act primarily for the benefit of another. The individual with developmental disabilities is called the "ward."

B. Inventory - The Inventory (Form PC577) is a list of the assets in an estate. A guardian of the estate must file an Inventory within 56 days from the date of the Letters of Guardianship of Individual with Developmental Disability. NOTE: Property the protected person owns jointly or in common with others must be listed on the Inventory along with the type of ownership.

C. Accounts - A guardian of the estate must make a complete itemized Account of Fiduciary (Form PC583 or PC584) of the administration of the estate to the Court at least once every year, or more often if directed by the Court. The accounting must show all receipts, disbursements, and sales of property during the accounting period. It will also show the property remaining in the hands of the fiduciary at the end of the accounting period, together with the form of such property. It must also have attached a current account summary or monthly statement from the financial institution. If this accounting is not received by the Court each year, within 56 days following the anniversary date of the appointment, the fiduciary is considered delinquent and subject to serious Court action. However, the Court cannot receive the accounting more than 56 days prior to the anniversary date. The "anniversary date" is the month and day the Judge signed the Letters of Guardianship of Individual with Developmental Disability.

D. Final Accounts - When the estate is ready for closing, the guardian of the Individual with a Developmental Disability must file a Final Account (Form PC 583 or PC584) and an itemized and complete list of all of the remaining property.

E. Notice - A Notice of Hearing (Form PC562) and copies of the Inventory and account(s) must be sent to all interested persons, with the original to be filed with the Court, along with a Proof of Service (Form PC564). The "interested persons" are defined by Court rule and include: 1) the protected individual or ward, if 14 years of age or older and can be located; 2) the presumptive heirs of the protected individual; 3) claimants; and 4) additional interested persons required by law or court rule.

F. Standards of Conduct - Fiduciaries are held to the strictest standards of conduct in regard to estates. If you have a question on whether your proposed action in an estate is lawful, you are advised to contact an attorney for legal advice.

G. Filing on Time - You have a strict obligation to file reports, inventories and accountings on time. Failure to do so can result in your removal as a fiduciary and subject you to a contempt of court action.

H. Commingling of Funds - A fiduciary is absolutely forbidden from commingling his or her own funds or properties together with the ward's assets. The most common violation here is creation of joint accounts. WARNING: If accounts are already joint at the time of your appointment, you should seek legal advice before you make any change.

I. Negligence in Handling the Estate - A fiduciary must handle the assets of the estate with the greatest care. A fiduciary can be held personally liable for failure in this duty. For example: If the fiduciary forgets to pay the insurance and the house burns down, the Court may hold the fiduciary liable for the loss.

J. Loss Through Self-Dealing - A fiduciary must not transact deals where the fiduciary's own self-interest is opposed to his or her duty to the estate.

K. Wanton and Willful Mishandling - A fiduciary may not purposely use the estate in a manner which is against the interest of the estate.

L. Borrowing - A fiduciary may not borrow or use funds of properties from the estate for the fiduciary's own purposes.

M. Tax Returns - The estate might be required to file certain tax returns. It is the fiduciary's duty to file these returns. Therefore, as soon as you are appointed and regularly thereafter, you should determine whether or not you must file tax returns.

N. Pre-Notice Cards: As a reminder, in guardianships a pre-notice postcard will be sent to the fiduciary the month prior to the due date along with the appropriate form to be completed and filed with the Court.

O. Prudent Investor Rule - A fiduciary shall invest and manage assets needed in a fiduciary capacity as a prudent investor would, taking into account the purposes, terms, distribution requirements expressed in writing and other circumstances of the fiduciary estate. It is important that the fiduciary become familiar with all the aspects of the prudent investor rule.

700.1501 Short title; definitions
Sec. 1501

(1) This part shall be known and may be cited as the "Michigan prudent investor rule". This part prescribes the Michigan prudent investor rule.
(2) As used in this part:
(a) "Governing instrument" includes, but is not limited to, a court order.
(b) "Portfolio" means all property of every kind and character held by a fiduciary on behalf of a fiduciary estate.

700.1502 Prudent investor rule

Sec. 1502.

(1) A fiduciary shall invest and manage assets held in a fiduciary capacity as a prudent investor would, taking into account the purposes, terms, distribution requirements expressed in the governing instrument, and other circumstances of the fiduciary estate. To satisfy this standard, the fiduciary must exercise reasonable care, skill, and caution.
(2) The Michigan prudent investor rule is a default rule that may be expanded, restricted, eliminated, or otherwise altered by the provisions of the governing instrument. A fiduciary is not liable to a beneficiary to the extent that the fiduciary acted in reasonable reliance on the provisions of the governing instrument.

700.1503 Portfolio strategy; risk and return objectives

Sec. 1503.

(1) A fiduciary's investment and management decisions with respect to individual assets shall be evaluated not in isolation, but rather in the context of the fiduciary estate portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fiduciary estate.

(2) Among circumstances that a fiduciary must consider in investing and managing fiduciary assets are all of the following that are relevant to the fiduciary estate or its beneficiaries:

(a) General economic conditions.
(b) The possible effect of inflation or deflation.
(c) The expected tax consequences of an investment decision or strategy.
(d) The role that each investment or course of action plays within the overall portfolio, which may include financial assets, interests in closely-held enterprises, tangible and intangible personal property, and real property.
(e) The expected total return from income and the appreciation of capital.
(f) Other resources of the beneficiaries.
(g) The need for liquidity, regularity of income, and preservation or appreciation of capital.
(h) An asset's special relationship or special value, if any, to the purposes of the fiduciary estate or to 1 or more of the beneficiaries.

(3) A fiduciary shall make a reasonable effort to verify facts relevant to the investment and management of fiduciary assets.

(4) A fiduciary may invest in any kind of property or type of investment consistent with the standards of the Michigan prudent investor rule. A particular investment is not inherently prudent or imprudent.

(5) A fiduciary who has special skill or expertise, or is named fiduciary in reliance upon the fiduciary's representation that the fiduciary has special skill or expertise, has a duty to use that special skill or expertise.

700.1504 Diversification

Sec. 1504.

A fiduciary shall diversify the investments of a fiduciary estate unless the fiduciary reasonably determines that, because of special circumstances, the purposes of the fiduciary estate are better served without diversifying.

700.1505 Duties at inception

Sec. 1505.

Within a reasonable time after accepting appointment as a fiduciary or receiving fiduciary assets, a fiduciary shall review the assets, and make and implement decisions concerning the retention and disposition of assets, in order to bring the fiduciary portfolio into compliance with the purposes, terms, distribution requirements expressed in the governing instrument, and other circumstances of the fiduciary estate, and with the requirements of the Michigan prudent investor rule.

700.1506 Loyalty

Sec. 1506.

A fiduciary shall invest and manage fiduciary assets solely in the interest of the beneficiaries.

700.1507 Impartiality

Sec. 1507.

If a fiduciary estate has 2 or more beneficiaries, the fiduciary shall act impartially in investing and managing the fiduciary assets, and shall take into account any differing interests of the beneficiaries.

700.1508 Investment costs

Sec. 1508.

In investing and managing fiduciary assets, a fiduciary may only incur costs that are appropriate and reasonable in relation to the assets, the purposes of the fiduciary estate, and the skills of the fiduciary.

700.1509 Reviewing compliance

Sec. 1509.

Compliance with the prudent investor rule is determined in light of the facts and circumstances that exist at the time of a fiduciary's decision or action, and not by hindsight. The prudent investor rule requires a standard of conduct, not outcome or performance.

700.1510 Delegation of investment and management functions

Sec. 1510.

(1) A fiduciary may delegate investment and management functions provided that the fiduciary exercises reasonable care, skill, and caution in all of the following:
(a) Selecting an agent.
(b) Establishing the scope and terms of the delegation, consistent with the purposes and terms of the governing instrument.
(c) Periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
(2) A fiduciary that complies with the requirements of subsection (1) is not liable to the beneficiaries or to the fiduciary estate for a decision or action of the agent to whom the function was delegated.
(3) In performing a delegated function, an agent owes a duty to the fiduciary estate to exercise reasonable care to comply with the terms of the delegation. If an agent accepts the delegation of a fiduciary function from a fiduciary that is subject to the laws of this state, the agent submits to the jurisdiction of this state's court.

700.1511 Language invoking standard of prudent investor rule

Sec. 1511.

The following terms or similar language in a governing instrument, unless otherwise limited or modified, authorize any investment or strategy permitted under the Michigan prudent investor rule:
(a) "Investments permissible by law for investment of trust funds".
(b) "Legal Investments".
(c) "Authorized investments".
(d) "Using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital".
(e) "Prudent man rule".
(f) "Prudent trustee rule".
(g) "Prudent person rule".
(h) "Prudent investor rule".

750.1512 Application to existing fiduciary estates

Sec. 1512.

The Michigan prudent investor rule applies to a fiduciary estate that exists on or is created after this act's effective date. As applied to a fiduciary estate that exists on this act's effective date, the Michigan prudent investor rule governs only a decision or action that occurs after that date.

P. Other Duties - There are other duties of a fiduciary which are imposed on you when you accept this important trust. This publication is not intended to advise you of your complete responsibility as fiduciary. You should consult with your attorney, or, if not represented by an attorney, take it upon yourself to become fully aware of your responsibility as a fiduciary.

Further questions:

If you have questions about guardianships for persons with alleged developmental disabilities, you should discuss them with an attorney or contact Community Advocates for Persons with Developmental Disabilities at (269) 342-9801. Community Advocates can provide information on alternatives to guardianships.

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