When Banks Make Their Own Rules

We lawyers really have to look foolish to our clients when we explain to them the purpose and significance of Letters of Guardianship. After all, we lawyers seem to only know state law and federal law, whereas there are corporate bureaucracies that have their own law that must be followed.

Today’s example, class: Certain banks want something more than the Letters of Guardianship to serve as evidence of the guardian’s powers. They want the order appointing the guardian. And maybe they want a copy of that order that’s been “certified” within the past 30 days. Orders of appointment can sometimes go into details about the finances and the medical status of the protected person (ward). Well then, why not a copy of the petition for guardianship too, and maybe the medical evidence to support the petition?

(Breathe in…breathe out…breathe in…breath out…)

You see, here’s the idea with Letters of Guardianship: The court issues an order appointing you guardian, but on the condition that you sign an oath before the Clerk and, if required, you post a surety bond. Then, and only then, can the Clerk issue Letters. See Indiana Code § 29-3-7-3.

If the court order has placed any limitations on the guardian’s powers, those limitations must be endorsed on the Letters of Guardianship. See Indiana Code §§ 29-3-7-3(c) and 29-3-8-8(b).

The Letters are the legal evidence of a guardian’s powers – not the order of appointment itself. “Letters are evidence that the guardian has all, and the protected person does not have any, rights to possess and dispose of the guardianship property.” See Indiana Code 29-3-7-6(a).

Third parties are protected from liability when dealing in good faith with a guardian, and such third parties (that means you, banks) are “not required to inquire into the existence of the power or the propriety of its exercise except as to restrictions endorsed on the letters.” Indiana Code § 29-3-11-1(a)(2).

Some of my colleagues, whom I respect tremendously, simply give in to the corporate bureaucrats and staple a copy of the Order to the Letters of Guardianship. I say give them a copy of the damn order if they ask for it. But make them ask for it, and in the process try to educate them on why what they’re asking for is unnecessary and perhaps, in some cases, an unwelcome intrusion into matters that are frankly none of their business.

About H. Kennard Bennett

Ken Bennett is a partner in the elder law firm of Bennett & McClammer and is Founder & Team Leader at Scout Guardianship Services. He also founded and serves as Executive Director and Senior Counsel to the Center for At-Risk Elders, Inc., a public interest law firm that, among other things, operates the CARE Volunteer Advocates Program, providing guardianship services to low-income, unbefriended, incapacitated adults.

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