Guardians are often asked to sign leases and the financial responsibility is often misunderstood.
The best way to get a better understanding is to review the definitions of co-signing and the function of the guardianship.
When one becomes a guardian, certain rights are transferred from a person (ward) to the guardian. One of these rights that can be transferred is the right to into binding contracts such as leases.
Signing lease as guardian of: When a guardian signs a lease for the ward this does not necessarily mean the guardian is financially obligated or liable.
The cost of a ward’s care and housing usually come from the ward’s estate and/or other subsidies such as Social Security. For the guardian to avoid contractual obligations, they must carefully read and review contracts such as leases, and modify them if necessary. Also, a guardian can be held liable for negligently or fraudulently handling the ward’s estate. Liability can be avoided with reasonable prudence. Guardians maybe held to a “reasonable person” standard relative to making decisions. The guardian owes a duty to behave as a reasonable person would under the same or similar circumstances.
On the other hand, some types of guardianship can create financial liability. For instance, under the Michigan Mental Health Code, Chapter 6, the probate judge can confer general fiduciary financial authorities (“guardian of the estate”).
Co-signing: Anyone, including a guardian, can co-sign for another person. A guardian signing for a ward should not be confused with being a co-signer. Co-signing involves a promise to pay another person’s debt arising out of contract if that person fails to do so.