Can the Tennessee Public Guardianship Program pay bills of a deceased client and bill the estate later, and is the current bond enough to cover the program?

Subject

Opinion No. 13-36, Duties and Liabilities of District Public Guardian, May 2, 2013

Plain-English summary

Tennessee's Public Guardianship for the Elderly Law (Tenn. Code Ann. §§ 34-7-101 to -105) creates a state-run guardianship program for elderly disabled people who lack a willing or able family member or friend to serve as conservator. The state is divided into nine districts, each with a district public guardian and staff. The program is administered by the Tennessee Commission on Aging and Disability.

The Commission asked two questions:

1. Post-death bill payment. Could a district public guardian pay bills incurred by a deceased client (after the client's death), and then seek reimbursement from the client's estate under an indemnification agreement?

The AG said no. A district public guardian's authority is limited to the powers of a conservator under §§ 34-1-101 to -3-109. Tenn. Code Ann. § 34-7-104(a)(2). Like a conservator, the public guardian's payments must be made from the client's property, not from state funds. § 34-1-113. The guardian/conservator's authority ends at the client's death, except for the "sole purpose of making reasonable and proper funeral arrangements." § 34-1-113(e); In re Blessing, 1998 WL 862480 (Tenn. Ct. App. 1998). So even with an indemnification agreement, the public guardian lacks statutory authority to advance state funds to pay post-death bills.

2. Bond sufficiency. Were the current bond levels ($200,000 per Public Guardian position and $100,000 for specific positions) sufficient to ensure the program's fiduciary responsibilities?

The AG said this is a policy question requiring weighing of several factors. The state tort claim limits under Tenn. Code Ann. § 9-8-307 (which caps individual tort claims at $300,000 and per-occurrence claims at $1,000,000) may be one factor. Tort claims against district public guardians for state-employee acts or omissions are subject to that statutory cap, with awards paid out of the Risk Management Fund (§ 9-8-109).

But § 9-8-307 isn't the only relevant factor. The bond required by § 34-7-104(k) must "ensure the fiduciary responsibilities of the district public guardian in all court appointed cases." Other factors to consider include the number and types of cases handled, the liability risk associated with those cases, and the historical record of whether prior bond levels have been sufficient. The Commission's policy judgment on appropriate bond level depends on all those factors.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Public Guardianship for the Elderly Law remains in place. Tenn. Code Ann. § 9-8-307 was amended in 2017 to raise the individual tort claim cap. Anyone advising on a current public-guardian post-death question or bond sufficiency analysis should check the current statute and any subsequent AG opinions or appellate decisions.

Background and statutory framework

The Public Guardianship Program. Tenn. Code Ann. §§ 34-7-101 to -105. Purpose: aid disabled persons 60 or older who lack family or friends willing and able to serve as conservators. § 34-7-102(a). The program is meant to be the least intrusive alternative, letting the elderly participate as fully as possible in decisions affecting them. § 34-7-102(b).

Administration. The Tennessee Commission on Aging and Disability administers the program. § 34-7-103. The state is divided into nine development districts, each with a district public guardian and staff.

Powers of the district public guardian. § 34-7-104 sets out the guardian's powers and duties. Per § 34-7-104(a)(2), the guardian's powers are limited to those of a conservator under §§ 34-1-101 to -3-109. The guardian can execute a power of attorney with a client under the Uniform Durable Power of Attorney Act (§§ 34-6-101 to -111), but the guardian's own authority can't exceed conservator authority. § 34-7-104(a)(3).

Fiduciary payment authority. Like a conservator, the public guardian's payments must come from the client's own property. §§ 34-1-113 (payments), 34-1-115 (investments), 34-1-116 (sale of property). The state doesn't advance funds.

Post-death authority. Tenn. Code Ann. § 34-1-113(e) provides that after the conservatee's death, the fiduciary's duty continues "for the sole purpose of making reasonable and proper funeral arrangements for the disposition of the remains of the disabled person, at death." In re Blessing confirmed this is the only post-death authority. A fiduciary cannot advance state money to pay other post-death debts of the deceased even with an indemnification arrangement.

The bond requirement. Tenn. Code Ann. § 34-7-104(k) directs the Commission on Aging and Disability to arrange "the purchase of a statewide bond . . . that will ensure the fiduciary responsibilities of the district public guardian in all court appointed cases."

State tort claim limits. Tenn. Code Ann. § 9-8-307(a)(1)(A)-(V) lists the kinds of tort claims that can be brought against the state. § 9-8-307(e) caps individual tort claims at $300,000 and per-occurrence at $1,000,000. Awards are paid out of the Risk Management Fund (§ 9-8-109). Tort claims against a district public guardian for state-employee acts and omissions fall under this regime.

Why state tort caps aren't the whole answer. The opinion's key insight: § 9-8-307 caps liability claims against the state. But § 34-7-104(k)'s bond is to ensure the guardian's fiduciary responsibilities. Fiduciary breaches (defalcations, mismanagement, fraud) might not all fall within the state tort claim framework. Some might be uncovered by the state's risk management, leaving the bond as the only protection. So the bond sizing analysis needs to weigh fiduciary risk, not just state tort exposure.

Common questions

Can a public guardian pay a client's outstanding bills after the client dies?

Only funeral expenses. § 34-1-113(e). For any other outstanding bills, the public guardian's authority has ended. The client's estate would handle those through probate.

What if a power of attorney has an indemnification provision allowing the guardian to bill the estate later?

The indemnification provision doesn't help. The public guardian lacks statutory authority to advance state funds to pay client bills in the first place. § 34-1-113 requires payments come from the client's property. The Public Guardianship Law doesn't override this.

What if the guardian has been paying bills on behalf of the client right up to the moment of death?

Pre-death payments are fine if they come from the client's property and the guardian acted within authority. Post-death is the line. The fiduciary relationship doesn't continue except for funeral arrangements.

How does the Commission set the bond level?

It's a policy decision. Tenn. Code Ann. § 34-7-104(k) requires a bond that "ensures the fiduciary responsibilities of the district public guardian." The Commission weighs multiple factors: number and type of cases handled, liability risk per case, historical bond adequacy, and (as one consideration) the state's tort claim limits under § 9-8-307.

Are the state tort claim limits relevant?

Yes, as one factor. § 9-8-307 caps tort claims against the state at $300,000 per individual and $1,000,000 per occurrence, with awards from the Risk Management Fund. That tells you something about the state's exposure on the tort side. But the bond's purpose under § 34-7-104(k) is to ensure fiduciary performance, which is broader than tort liability. So the tort caps alone don't determine the bond level.

Citations

Tenn. Code Ann. §§ 34-7-101 to -105 (Public Guardianship for the Elderly Law); § 34-7-102 (purpose); § 34-7-103 (administration); § 34-7-104 (powers and duties, bonding); §§ 34-1-101 to -3-109 (conservator framework); § 34-1-113 (fiduciary payments, post-death); §§ 34-6-101 to -111 (Uniform Durable Power of Attorney Act); § 9-8-109 (Risk Management Fund); § 9-8-307 (state tort claims). Case: In re Blessing, No. 01A01-9712-CH-00691, 1998 WL 862480 (Tenn. Ct. App. Dec. 14, 1998).

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2013/op13-036.pdf

Original opinion text

S T A T E O F T E N N E S S E E
OFFICE OF THE
ATTORNEY GENERAL
PO BOX 20207
NASHVILLE, TENNESSEE 37202

May 2, 2013

Opinion No. 13-36

Duties and Liabilities of District Public Guardian

QUESTIONS

1. Could a district public guardian under the Public Guardian Program pay bills incurred on behalf of a consumer in the Program after the consumer's death if the Program can seek reimbursement from the consumer's estate in accordance with an indemnification agreement executed by the consumer and the Program pursuant to the Uniform Durable Power of Attorney Act, codified at Tenn. Code Ann. §§ 34-6-101 to -111?

2. The District Public Guardian Program is currently bonded by the State of Tennessee pursuant to Tenn. Code Ann. § 34-7-104(k). The current bond amount gives $200,000 in protection to each Public Guardian position and $100,000 for specific listed positions in each district. In light of other liability protections for the State of Tennessee and its employees under Tennessee law, are those amounts sufficient for the program?

OPINIONS

1. No. A district public guardian lacks statutory authority to make such payments.

2. The question of the appropriate level of bonds needed to "ensure the fiduciary responsibilities of the district public guardian in all court appointed cases," as required by Tenn. Code Ann. § 34-7-104(k), is necessarily a policy decision dependent on the weighing of various factors and possible risks. Liability protections for the State of Tennessee and its employees may be one consideration weighed in evaluating the appropriate level of bond coverage but is likely not the only factor that should be considered in determining the appropriate bond level.

ANALYSIS

The District Public Guardian Program is established as part of the Public Guardianship for the Elderly Law ("the Law"), codified at Tenn. Code Ann. §§ 34-7-101 to -105. The General Assembly intended as part of this Law to establish a public guardianship system "to aid disabled persons who are sixty (60) years of age or older who have no family member or friend who is willing and able to serve as conservator." Tenn. Code Ann. § 34-7-102(a). The guardianship "permits the disabled elderly to . . . determinatively participate as fully as possible in all decisions that affect them, . . . assists such persons to regain or develop their capacities to the maximum extent possible, and . . . accomplishes such objectives through the use of the least intrusive alternatives." Tenn. Code Ann. § 34-7-102(b).

To accomplish these goals, the Law creates a statewide program to provide guardianship for the elderly that is administered by the Tennessee Commission on Aging and Disability. Tenn. Code Ann. § 34-7-103. The Law divides the State into nine development districts, and each district has a public guardian and staff. Id. The powers and duties of the district public guardian are set forth at Tenn. Code Ann. § 34-7-104. While a district public guardian may accept and execute a power of attorney with a disabled elderly consumer as defined by the Law, see Tenn. Code Ann. § 34-7-104(a)(3), the powers of the guardian are limited to those powers granted a conservator under Tenn. Code Ann. §§ 34-1-101 to -3-109. Tenn. Code Ann. § 34-7-104(a)(2). Thus, like a conservator, the district public guardian is restricted on the payments to be made on behalf of the elderly consumer, and such payments are required to be made from the property of the elderly consumer. See Tenn. Code Ann. §§ 34-1-113 (payments by fiduciary), 34-1-115 (investments by fiduciary) & 34-1-116 (sale of property by fiduciary).

1. The aforementioned statutory framework governing the powers of a district public guardian does not allow the guardian to make payments from State funds to pay the debts of an elderly consumer after the consumer's death, even if the power of attorney executed by the elderly consumer allows the guardian to obtain reimbursement of such payments from the elderly consumer's estate. See Tenn. Code Ann. §§ 34-1-113 & 34-7-104(a)(2). Moreover, as recognized by the Tennessee Court of Appeals, the "only duty remaining to the fiduciary after the death of the conservatee involves funeral and burial for the conservatee." In re Blessing, No. 01A01-9712-CH-00691, 1998 WL 862480 at *8 (Dec. 14, 1998). See also Tenn. Code Ann. § 34-1-113(e). Again, the public district guardian has no greater authority than a conservator under Tennessee law, and the guardian's powers are thus limited in the same manner as a conservator's powers. Tenn. Code Ann. § 34-7-104(a)(2).

2. The Tennessee Commission on Aging and Disability has the duty to arrange out of the program budget the purchase of a statewide bond "that will ensure the fiduciary responsibilities of the district public guardian in all court appointed cases." Tenn. Code Ann. § 34-7-104(k). The question of the sufficiency of current bonding levels can only be answered in the context of what amount will ensure the performance of those fiduciary responsibilities, and the answer to that question is a policy decision based upon the consideration of numerous factors.

One factor that might be considered is the liability limits established by the General Assembly for the State of Tennessee and State personnel acting on the State's behalf. The General Assembly has permitted claims against the State as enumerated in Tenn. Code Ann. § 9-8-307(a)(1)(A) through (V) but has placed a $300,000 statutory cap on tort claims, with a $1,000,000 limit on all claims per occurrence. Tenn. Code Ann. § 9-8-307(e). Awards on tort claims are payable out of the Risk Management Fund. Tenn. Code Ann. § 9-8-109. Any tort claims against a district public guardian for appropriate acts or omissions of state employees would be subject to Tenn. Code Ann. § 9-8-307.

However, these liability limits are not the only relevant factor for assessing the appropriate bonding level for the Public Guardian Program. Under Tenn. Code Ann. § 34-7-104(k), the bond obtained must ensure the district public guardians' present fiduciary responsibilities in all appointed cases. Other factors that could be considered include, but are not limited to, the number and types of cases handled by these guardians, the liability risk associated with these cases and the historical record whether the bonds obtained have been sufficient to ensure the performance of these guardians' fiduciary responsibilities.

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

MARY M. BERS
Senior Counsel

Requested by:
Jim Shulman
Executive Director, Commission on Aging and Disability
500 Deaderick Street, Suite 825
Andrew Jackson Building
Nashville, Tennessee 37243-0860