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Conflicts of Interest for Florida Guardians

CONFLICTS OF INTEREST

Guardians owe a fiduciary duty to their wards. A fiduciary duty is one of the highest legal duties one person can owe to another. Therefore, guardians must be very careful to avoid any conflict of interest that would violate the fiduciary duty to the ward. A guardian cannot profit from his or her relationship with the ward, except for the payment of reasonable fees and expenses. Conflicts of interest are prohibited by Florida Statute §744.446, which states:

744.446 Conflicts of interest; prohibited activities; court approval; breach of fiduciary duty.

(1) It is essential to the proper conduct and management of a guardianship that the guardian be independent and impartial. The fiduciary relationship which exists between the guardian and the ward may not be used for the private gain of the guardian other than the remuneration for fees and expenses provided by law. The guardian may not incur any obligation on behalf of the guardianship which conflicts with the proper discharge of the guardian’s duties.

(2) Unless prior approval is obtained by court order, or unless such relationship existed prior to appointment of the guardian and is disclosed to the court in the petition for appointment of guardian, a guardian may not:

(a) Have any interest, financial or otherwise, direct or indirect, in any business transaction or activity with the guardianship;

(b) Acquire an ownership, possessory, security, or other pecuniary interest adverse to the ward;

(c) Be designated as a beneficiary on any life insurance policy, pension, or benefit plan of the ward unless such designation was validly made by the ward prior to adjudication of incapacity of the ward; and

(d) Directly or indirectly purchase, rent, lease, or sell any property or services from or to any business entity of which the guardian or the guardian’s spouse or any of the guardian’s lineal descendants, or collateral kindred, is an officer, partner, director, shareholder, or proprietor, or has any financial interest.

(3) Any activity prohibited by this section is voidable during the term of the guardianship or by the personal representative of the ward’s estate, and the guardian is subject to removal and to imposition of personal liability through a proceeding for surcharge, in addition to any other remedies otherwise available.

(4) In the event of a breach by the guardian of the guardian’s fiduciary duty, the court shall take those necessary actions to protect the ward and the ward’s assets.

Professional guardians are forbidden from borrowing money from their ward’s or from purchasing property from their wards. A non-professional or a family member may purchase property from the ward if (1) they first obtain permission from the court after notice to interested parties, or (2) they buy the property at a public sale. These transactions are governed by Florida Statute §744.454, which provides:

744.454 Guardian forbidden to borrow or purchase; exceptions.

A professional guardian may not purchase property or borrow money from his or her ward. A guardian who is not a professional guardian may do so if:

(1) A court by written order authorizes the sale or loan after a hearing to which interested persons were given notice; or

(2) The property is sold at public sale and the guardian is a spouse, parent, child, brother, or sister of the ward or a cotenant of the ward in the property to be sold.

CONCLUSION

A guardian can do many things without the court’s permission although the guardian must be mindful of the potential for conflicts of interest. Many other things require the court’s permission, especially with regard to property interests. Some sensitive areas regarding experimental treatments, commitment to certain treatment facilities, and other highly personal issues (divorce, sterilization, and abortion) require extraordinary authority. When in doubt, always consult your attorney BEFORE you act. If there is still a doubt after consulting your attorney, it is better to ask permission of the court. No one ever got in trouble for asking for permission unnecessarily. If you are reluctant to seek court permission because you are afraid that the court will deny the request, then maybe you ought not to be doing it in the first place. If you have a valid, well-articulated reason and the best interests of the ward in mind, then chances are that the court will agree. For your own protection, you have to be particularly careful where a disgruntled interested person may object to what you are doing. If you get court permission after notice to them, they will not be able to complain after the fact and cause you trouble later.

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