What are the Duties of a Guardian of a Minor in New Jersey?
Full Question:
Answer:
Fiduciaries, such as guardians, owe two main duties to their wards: a duty of loyalty and a duty of care. The duty of loyalty requires that fiduciaries act solely in the interest of their wards, rather than in their own interest. Thus fiduciaries must not derive any direct or indirect profit from their position, and must avoid potential conflicts of interest. The duty of care requires that fiduciaries perform their functions with a high level of competence and thoroughness, in accordance with industry standards.
The elements of a cause of action for breach of fiduciary duty are:
(1) Plaintiff and Defendant share a relationship whereby:
(a) Plaintiff reposes trust and confidence in Defendant, and
(b) Defendant undertakes such trust and assumes a duty to advise, counsel and/or
protect Plaintiff;
(2) Defendant breaches its duties to Plaintiff; and
(3) Plaintiff suffers damages.
The elements of a claim for breach of fiduciary duty are not fixed as the claim may arise from virtually any case where one party accepts the trust and assumes the duty to protect a weaker party.
Affirmative defenses to a claim for breach of fiduciary duty can include, but are not limited to:
(1) The passing of the statute of limitations for filing the claim.
(2) Lack of fiduciary relationship (for example, when the parties did not enter a fiduciary relationship, but rather conducted business in an arm’s length transaction there is no duty to protect the other party or disclose facts which the other party could have discovered by its own diligence.)
(3) Lack of standing
(4) Approval (for example, if the alleged actions followed full disclosure to and the consent of the Plaintiff)
(5) Business judgment rule (ex. that the corporate fiduciary's actions were motivated by a bona fide interest in the well being of the corporation where shareholders are the ones owed the fiduciary duty)
Please see the following NJ statutes:
3B:12-51. Powers and responsibilities of a guardian of the person of a
minor generally
A guardian of the person of a minor has the powers and responsibilities
of a parent who has not been deprived of custody of his minor and
unemancipated child, except that a guardian is not legally obligated to
provide for the ward from his own funds.
3B:12-52. Powers and duties of a guardian of the person of a minor
In particular, and without qualifying the provisions of N.J.S. 3B:12-51,
a guardian of the person of a minor has the following powers and duties,
except as modified by order of the court:
a. He must take reasonable care of his ward's personal effects
and institute an action for the appointment of a guardian of his
ward's estate if necessary to protect it;
b. He may receive periodically money payable for the support of the
ward to the ward's parent, guardian or custodian under the terms of any
statutory benefit or insurance system, or any private contract, devise,
trust, conservatorship or custodianship. Any sums so received shall be
applied to the ward's current needs for support, care and education in the
exercise of a reasonable discretion, with or without court order, with
due regard to the duty or ability of any person to support or provide for
the ward and with or without regard to any other funds, income or
property which may be available for that purpose. He must exercise due
care to conserve any excess funds for the ward's future needs unless a
guardian has been appointed for the estate of the ward, in which case the
excess shall be paid over at least annually to that guardian. He may
institute an action to compel the performance by any person of a duty to
support the ward or to pay sums for the welfare of the ward;
c. He is empowered to facilitate the ward's education, social, or other
activities and to authorize medical or other professional care,
treatment, or advice. He is not liable by reason of this consent for
injury to the ward resulting from the negligence or acts of third persons
unless it would have been illegal for a parent to have consented. He may
consent to the marriage or adoption of his ward or to his ward's military
service.
3B:12-53. Powers and duties of a guardian of the estate of an unmarried
minor as guardian of the minor's person
A guardian of the estate of an unmarried minor, as to whom no one has
parental rights, has the duties and powers of a guardian of the person of
a minor described in this article until the minor attains the age of 18
or marries, but the parental rights so conferred on a guardian of an
estate do not preclude appointment of a guardian of the person.
3B:12-54 Duty of guardian to deliver property when minor attains
18 years of age.
Except as provided in section 2 of P.L. 2003, c. 258 (C. 3B:12-54.1),
when a minor who has not been adjudged an incapacitated person attains 18
years of age, his guardian, after meeting all prior claims and expenses
of administration, shall pay over and distribute all funds and properties
to the former ward as soon as possible.
3B:12-54.1 Trusts for certain beneficiaries providing deferred
distribution of funds.
In the event that any part of an intestate estate passes to the
decedent's issue pursuant to N.J.S. 3B:5-4, and if any such issue shall
not have attained the age of 18 at the time such part of the intestate
estate would pass to such issue, such part may pass as follows:
a. The parent or guardian of such issue or any other individual
with standing may apply to the Superior Court, Chancery Division,
Probate Part in the county in which the decedent was domiciled for
permission to place all, or any part, of the funds passing to such
issue in a separate trust for the exclusive benefit of such issue.
b. The terms of the trust may provide as follows:
(1) The trust assets and the income therefrom shall be used for the
exclusive benefit of the beneficiary, including but not limited to the
beneficiary's health, support, maintenance and education, including
college and post-graduate work, in the discretion of the trustees;
(2) The beneficiary shall have the right to request distributions of
trust principal as follows: one-third of the principal after attaining
the age of 25 years, one-half of the then balance after attaining the age
of 30 years, and all of the then balance after attaining the age of 35
years; or at such other ages as the court, in its discretion, shall
determine;
(3) Should the beneficiary die prior to the termination of the
trust, the remaining trust principal and accrued income shall be
distributed to the beneficiary's estate;
(4) Two individual trustees, or one corporate trustee, or a combination
thereof, shall serve at all times, with or without bond, as the court
shall determine in its discretion; and
(5) Such other terms and conditions of the trust as the court shall
determine in its discretion.
c. In ruling on such an application, the court:
(1) may allow any award from the federal "September 11th Victim
Compensation Fund of 2001" to be the subject of a trust created pursuant
to this section or be included in such a trust, regardless of whether
such an award is found to pass to a minor issue of the decedent pursuant
to N.J.S. 3B:5-4 or otherwise; and
(2) shall consider all relevant factors, including but not limited to
the amount of money involved, the availability of other resources for
current maintenance and support, the stability of the entity offering an
investment covered by the application, income tax consequences, any
special needs or vulnerabilities of the minor and the financial and
psychological consequences of putting all or a substantial part of the
minor's estate out of reach for a long period of time.
d. The court shall retain jurisdiction of the trust until its
termination. The beneficiary's parent, guardian, trustee or other
individual with standing, including the beneficiary if he or she has
attained the age of 18 years, may apply to the court at any time for
modifications to the terms of the trust. Modifications may be made in the
court's discretion.
3B:12-55. When authority and responsibility of guardian terminate
The authority and responsibility of a guardian of the person or estate
of a minor terminate upon the death, resignation or removal of the
guardian or upon the minor's death, adoption, marriage or attainment of
18 years of age, but termination does not affect the guardian's liability
for prior acts, nor his obligation to account for funds and assets of his
ward. Resignation of a guardian does not terminate the guardianship
unless it has been approved by a judgment of the court.
3B:12-39. Delegation of parent's or guardian's powers regarding ward's
care, custody or property; limitations.
Delegation of parent's or guardian's powers regarding ward's care,
custody or property; limitations.
A parent, other than where custody of a minor has been awarded by a
court of competent jurisdiction, with the consent of the other parent, if
the latter is living and not an incapacitated person or a guardian of the
person of a minor or an incapacitated person, by a properly executed power
of attorney, may delegate to another person, for a period not exceeding
six months, any of his powers regarding care, custody, or property of the
minor child or ward, except his power to consent to marriage or adoption
of a minor ward.
3B:12-40. Duty of guardian of ward's person to account to guardian of his
estate
If another person has been appointed guardian of the estate, all of the
ward's estate received by the guardian of the person in excess of those
funds expended to meet current expenses for support, care and education
of the ward must be paid to the guardian of the estate, and the guardian
of the person must account to the guardian of the estate for funds
expended.
3B:12-41. Guardian of ward's person entitled to reimbursement for
expenses; payments to third persons.
Guardian of ward's person entitled to reimbursement for expenses;
payments to third persons.
If another person has been appointed guardian of the ward's estate, the
guardian of the ward's person is entitled to receive reasonable
reimbursement and fees for his services and for room and board furnished
to the ward, provided the same has been agreed upon between the guardian
of the person and the guardian of the estate; and provided, further, that
the amounts agreed upon are reasonable under the circumstances. The
guardian of the person may request the guardian of the estate to expend
the ward's estate by payment to third persons or institutions for the
ward's care and maintenance.
3B:12-42. Reporting condition of ward's person and property to court
A guardian shall report at time intervals as ordered by the court,
unless otherwise waived by the court, the condition of the ward and the
condition of the ward's estate which has been subject to the guardian's
possession or control as ordered by the court.
a. A report by the guardian of the person shall state or contain:
(1) the current mental, physical and social condition of the ward;
(2) the living arrangements for all addresses of the ward during
the reporting period;
(3) the medical, educational, vocational and other services provided to
the ward and the guardian's opinions as to the adequacy of the ward's
care;
(4) a summary of the guardian's visits with the ward and activities on
the ward's behalf and the extent to which the ward has participated in
decision-making;
(5) if the ward is institutionalized, whether or not the guardian
considers the current plan for care, treatment or habilitation to
be in the ward's best interest;
(6) plans for future care; and
(7) a recommendation as to the need for continued guardianship
and any recommended changes in the scope of the guardianship.
b. The court may appoint an individual to review a report, interview
the ward or guardian and make any other investigation the court directs.
c. Agencies authorized to act pursuant to P.L. 1985, c. 298 (C.
52:27G-20 et seq.), P.L. 1985, c. 145 (C. 30:6D-23 et seq.), P.L. 1965,
c. 59 (C. 30:4-165.1 et seq.) and P.L. 1970, c. 289 (C. 30:4-165.7 et
seq.) and public officials appointed as limited guardians of the person
for medical purposes for individuals in psychiatric facilities listed in
R.S. 30:1-7 shall be exempt from this section.
3B:12-43. Expenditures to be made by guardian out of ward's estate
A guardian of the estate of a minor or incapacitated person may expend
or distribute so much or all of the income or principal of his ward for
the support, maintenance, education, general use and benefit of the ward
and his dependents, in the manner, at the time or times and to the extent
that the guardian, in an exercise of a reasonable discretion, deems
suitable and proper, taking into account the requirements of the "Prudent
Investor Act," P.L. 1997, c. 36 (C. 3B:20-11.1 et seq.), with or without
court order, with due regard to the duty and ability of any person to
support or provide for the ward if the ward is a minor, and without due
regard to the duty and ability of any person to support or provide for
the ward if the ward is an incapacitated person, and with or without
regard to any other funds, income or property which may be available for
that purpose.
3B:12-44. Recommendations to be considered by guardian of ward's
estate in making expenditures
In making expenditures under N.J.S. 3B:12-43, the guardian of the
estate of a minor or incapacitated person shall consider recommendations
relating to the appropriate standard of support, education and benefit
for the ward made by a parent or guardian of the person, if any. The
guardian of the estate may not be surcharged for sums paid to persons or
organizations actually furnishing support, education or care to the ward
pursuant to the recommendations of a parent or guardian of the person
unless the guardian knows that the parent or the guardian is deriving
personal financial benefit therefrom, or unless the recommendations are
clearly not in the best interests of the ward.
3B:12-45. Other factors to be considered by guardian of ward's estate in
making expenditures
In making expenditures under N.J.S. 3B:12-43, the guardian of the
estate of a minor or incapacitated person shall expend or distribute sums
reasonably necessary for the support, education, care or benefit of the
ward with due regard to:
a. The size of the ward's estate;
b. The probable duration of the guardianship and the likelihood that
the ward, at some future time, may be fully able to manage his affairs
and the estate which has been conserved for him; and
c. The accustomed standard of living of the ward and members of
the ward's household.
3B:12-46. Persons for whose benefit expenditures may be made by guardian
of ward's estate
The guardian of the estate of a minor or incapacitated person may
expend funds of the ward's estate under N.J.S. 3B:12-43 for the support
of persons legally dependent on the ward and others who are members of
the ward's household who are unable to support themselves, and who are in
need of support.
3B:12-47. Persons to whom funds may be paid
Funds expended by the guardian of the estate of a minor or an
incapacitated person under N.J.S. 3B:12-43 may be paid by the guardian to
any person, including the ward, to reimburse for expenditures which the
guardian might have made, or in advance for services to be rendered to
the ward when it is reasonable to expect that they will be performed and
where advance payments are customary or reasonably necessary under the
circumstances.
3B:12-48. Powers conferred upon a guardian
A guardian of the estate of a minor or an incapacitated person has all
of the powers conferred upon the guardian by law and the provisions of
this chapter except as limited by the judgment. These powers shall
specifically include the right to file or defend any litigation on behalf
of the ward, including but not limited to, the right to bring an action
for divorce or annulment on any grounds authorized by law.