Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Friday, March 22, 2013

Comprehensive Article on Standards for Financial Decision-making Published

RobertOdin1 MorganRobert B. Fleming, Esq. (Partner, Tucson law firm of Fleming & Curti, P.L.C) and Rebecca C. Morgan (Boston Asset Management Chair in Elder Law, the Director of the Center for Excellence in Elder Law at Stetson University College of Law and the Director of Stetson's online L.L.M. in Elder Law) recently published their article entitled Standards for Financial Decision-Making: Legal, Ethical, and Practical Issues, 2012 Utah L. Rev. 1275 (2012).  The introduction to the article is reproduced below: 

This Article reviews the standards for guardians of the estate when making financial decisions. Guardianship is a particularly statutory mechanism, and there are differences among the states as to the statutes. Thus, in discussing the standards for guardians in making financial decisions, this article will focus generally on the National Guardianship Association (NGA) Standards, with some state statutes or cases provided as illustrations.

Since this Article focuses on the standards for guardians in making financial decisions, it is important to understand what the term “standard” means. According to Black's Law Dictionary, a standard is “[a] model accepted as correct by custom, consent, or authority . . . [or a] criterion for measuring acceptability, quality, or accuracy . . . .” A standard is not the same thing as a duty.
A standard is then the “model behavior” for a guardian of the estate in discharging the guardian's duties--the way the guardian should conduct business. Much like the National Academy of Elder Law Attorneys (NAELA) Aspirational Standards, a standard informs the guardian of the ethical and professional way to do things. However, absent incorporation into a statute, the standard would not have the force of law. A guardian who does not conduct business in compliance with the standard may not be subject to sanctions under local law, but the standard may still have significant effect as a method of setting and identifying community and professional expectations. There is a possibility that professional guardians may be liable for professional malpractice, ethical violations, or even removal and surcharge for failure to follow well-recognized standards if those standards have become community practice.
This Article will look at background, terminology, and general principles; review the standards applicable to the guardian of the estate, with emphasis on the NGA Standards; review some of the more common financial decisions made by guardians and how the standards apply to them; consider some of the issues for the future; and will conclude with a summary of recommendations. Because this Article reviews a number of common financial decisions, it does not provide an in-depth discussion of the types of decisions. Instead, this Article briefly describes the decision, applies the NGA standard, and discusses the practical approach to making the decision. For consistency, we recognize that in some states, “guardian” is used to refer to the person and “conservator” to the property. In this Article, however, “guardian of the estate”--or just “guardian”--will be used as a shorthand to encompass terms including guardian of the property or estate, or conservator, unless there is a need to make a distinction for the purpose of clarity, or when referring to a particular law that uses conservatorship--such as the Uniform Guardianship and Protective Proceedings Act (UGPPA).


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