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If a person who is over the age of 18 years becomes mentally incompetent or otherwise unable to manage their affairs, someone should be appointed as guardian and trustee for that person. In the absence of an Enduring Power of Attorney, the process by which a trustee and guardian are appointed is governed by the Dependent Adults Act. This Act sets out the circumstances in which the Court will appoint a trustee and guardian and which powers they will have.
Pursuant to the Act, the guardian and trustee must be appointed by and Order of the Court in order to manage the person's affairs and act on their behalf. In order for the Court to make such an appointment, it must be shown that there is sufficient medical evidence to justify declaring the person a dependent adult. Also, it must be shown that all potential guardians and trustees have received notice of the proposed Court application and that they consent to the appointment or that they oppose the application and on what grounds. When the matter is heard in Court, the presiding Judge will hear all parties present and then either grant full guardianship and trusteeship, deny the application based on insufficient evidence, or grant the Order appointing a guardian and trustee with restricted powers or added conditions to be followed.
Generally, a trustee is given the power to step in and act on behalf of the dependent adult with respect to dealings with any of the person's assets, including banking, investment decisions, debt repayment, payments to charities or family members, or sale, mortgage or renting out any residential properties. All these activities must be conducted in the same manner as the person normally would and with a view to what is in the best interest of the estate. The guardian is generally given powers to make decisions about personal aspects. These include making decisions about and consenting to medical treatment, where the person will reside, what activities the person will take part in. The guardianship can be restricted to medical consent or residential matters, or can be as broad as to decide the person's diet, social activities, education and training. The Court will grant such powers which are necessary in light of the evidence in the particular case being heard.
Once the Order is granted appointing the guardian or trustee, the trustee must gather all the information regarding the estate assets and liabilities and file them with the Court. Within two years of the appointment, the trustee and guardian must appear in Court in order for the Court to review the matter. The accounts must be passed by the Court as being complete and that the assets have been dealt with in an appropriate manner. With respect to the guardianship, there must be evidence regarding the continuing mental incapacity. After the first review by the Court, the matter must be reviewed at intervals as ordered.
If the dependent adult regains the ability to manage their affairs after an order has be granted, the appointment of a guardian and trustee can be revoked and a final passing of accounts will be required. If the dependent adult passes away while an order is in existence, the trustee must appear in Court and obtain an Order which passes the accounts and discharges the trustee. This must be done before an executor under the Will or an administrator under the Intestate Succession Act can begin to deal with the estate assets.
If there is an Enduring Power of Attorney in place, there is no need to have the Court appoint a trustee for a dependent adult. If there is a Personal Directive in place and the Act is in force, again, there is no need to have the Court appoint a guardian for the dependent adult.