In this article, we explain the Illinois guardianship estate accountings process and answer the following questions:
Guardianship estates in Illinois with moderate to significant assets typically require regular accountings to be completed by the guardian of the estate. There are many similarities between the ongoing accountings for a decedent’s estate and a guardianship estate, but what differences should the guardian of the estate be aware of? Let’s take a closer look at the guardianship accountings process in Illinois.
The first step in the accounting process for a guardianship estate is to gather all the necessary financial documents. This includes items like checks written, bank statements, receipts, bills paid, etc. If it is the first accounting, all financial documents since the inventory was completed should be collected. For all accountings thereafter, any financial transactions, bank statements, etc from the last accounting up to the current accounting period need to be included.
The collected information will be entered into a court-formatted cash-flow document, detailing all disbursements, receipts, and the current assets on hand. Ideally, the accountings will balance with the cash-flow of the guardianship estate and will then be verified by the guardian.
The guardian should retain originals and/or copies of all documentation prepared for the estate accountings in case there are any complications that arise with the accountings or another party files an objection.
Once all the financial documents have been processed and the accounting is completed, the original accountings should be filed with the court prior to the guardianship estate accounting hearing. All interested parties should receive a copy of the accounting as well as a proper court notice informing them of the upcoming hearing date for the accounting. The judge should review a copy of the accountings prior to the court date.
It’s common for a guardianship estate’s value to fluctuate from year to year if it contains active investments or part of the estate’s funds are wrapped up in business. Once the accounting has been finalized it will be reviewed by the guardian and depending on the value of the estate action may need to be taken regarding the surety bond.
The surety bond is the equivalent of insurance for the beneficiaries against something unexpected happening to the estate. If the fiduciary steals from the estate or malfeasance occurs the bond company will reimburse the beneficiaries and then take legal action against the perpetrator to recoup the losses.
If an estate goes up in value the surety bond will need to be increased and if the estate goes down in value the surety bond will need to be decreased. Also, if it is determined that the beneficiaries’ bond premiums have been too high over a period the bond can be retroactively lowered to pay back the estate for the overpayment.
Generally, guardianship accountings need to be completed yearly. However, the judge presiding over a given guardianship accounting hearing may order that another accounting is not necessary for two or three years. No matter the timeframe between accountings, the guardian will need to keep track of all financial transactions and balances throughout the entirety of an accounting period.
If an interested party takes issue with the guardianship estate accounting they can file an objection with the court. The court will schedule a hearing and the legitimacy of the objections will be heard. If the judge feels there is no merit to the objections she will deny the objections and dismiss the complaints. However, if it is found the accountings are incomplete or inconsistencies arise in the final report the judge may require the guardian of the estate to file an amended accounting. If deliberate mismanagement of funds and mishandling of assets by the guardian exists he or she may be removed as representative and subject to legal action by the beneficiaries and the court.
Often, with complex estate accountings, the final numbers won’t balance. Any discrepancies must be analyzed to determine if further action is necessary. If the discrepancy on a large estate is a few hundred dollars the court may feel the amount is within a reasonable range and accept that the estate has been managed appropriately over the accounting period. However, if the discrepancy is thousands of dollars or more the court will likely order the guardian to review the accountings to determine what went wrong.
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