Can a Maryland Guardian Exercise Control Over a Ward’s Estate Planning Trust?

Maryland law empowers judges to appoint a guardian to oversee the affairs of an incapacitated adult (who is known as a ward). There are actually two distinct types of adult guardians: a guardian of person, who oversees the ward’s living situation and care; and a guardian of property, who takes charge of the ward’s property and finances. In many cases, both types of guardianships are necessary, and the court may appoint different persons to carry out each role.

Guardian Allowed to Complete Transfer of Home Under Incapacitated Ward’s Trusts

A guardian of person’s authority can also extend to assets that a ward transferred to a revocable living trust before they became incapacitated. Under Maryland trust law, the guardian can exercise any of the powers the ward could under the trust, provided the guardian first obtains court approval and the proposed action does not otherwise violate the terms of the trust documents. Such powers commonly include the power to sell trust property or revoke the trust altogether.

A recent decision from the Appellate Court of Maryland, In the Matter of Floyd, illustrates how such powers work in practice. The ward in this case is a woman suffering from dementia. She was previously married. Her husband owned a house in Maryland and had two adult stepsons from a prior marriage. After the husband died in 2014, the ward and the stepsons agreed that she would transfer title to the house, which she now owned, to a revocable living trust. She would serve as trustee during her lifetime, and upon her death or decision to leave the house, the property would be transferred to the stepsons.

The ward received her dementia diagnosis approximately two years later in 2016. In 2018, she created a second revocable living trust. This trust named the ward’s sister as successor trustee and stated the house would also go to her sister upon the ward’s death. Three years later, the sister started exercising control over the ward’s financial affairs under a power of attorney.

After Prince George’s County Family Services started raising questions about the sister’s handling of the ward’s property, however, a circuit court judge decided to appoint separate persons to serve as the ward’s guardian of person and guardian of property. One of the ward’s stepsons was named to fill the latter role.

In his new capacity as guardian of property, the ward asked the circuit court for permission to complete the transfer of the ward’s home to himself and his brother. The sister opposed, alleging the 2018 trust left the property to her. The Appellate Court eventually resolved the dispute in favor of the stepson. The Court explained that under both the 2014 and 2018 trusts, the ward had been the settlor and trustee. Upon her incapacity, the stepson as guardian stepped into the role of trustee for both trusts. That granted him the authority to “take any action with regard to the trusts that [the ward] may have taken, given that he first ask for and receive court approval for each action,” which he did with respect to the transfer of the house.

Contact a La Plata Guardianship Lawyer Today

Becoming the guardian of an incapacitated adult is an important responsibility. If you are thinking about taking on such a position, you should work with an experienced La Plata guardianship attorney who can guide you through the process. Contact Fanning Law today at 301-934-3620 to schedule a consultation. We serve clients in LaPlata, Waldorf, and Lexington Park.

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