Understanding the role of a guardian (or even a durable power-of-attorney) over an incompetent ward is an invaluable tool for our family law clients. One could justify a whole CLE devoted to its usefulness in this context alone. Despite the value of a guardian’s role, the establishment of the guardianship relationship has its limits. This is the holding in a recent and seminal case from the North Carolina Court of Appeals, Dillree v. Dillree, 2022-NCCOA-835.

The Takeaway

A guardian over an incompetent spouse can separate the ward from her spouse if the guardian determines it to be in the ward’s best interest (i.e., her safety is at risk, dementia requires placement in a care facility, and the like). However, a guardian cannot create a legal separation. Namely, a guardian cannot form the determination on the ward’s behalf that such separation from her spouse is done with the intent required to cease the matrimonial cohabitation. Such power would allow the guardian to, in effect, create the necessary intent to begin the one-year separation period for purposes of a divorce and to establish the concomitant rights that come with forming such intent (equitable distribution rights, most specifically). Allowing otherwise, the court holds, is a bridge too far. There are, however, other tools at the guardian’s disposal to help protect assets and matrimonial rights for their principal, specifically, constructive trusts, charging orders, and the like.

Brief Factual Overview

In the Dillree matter, Ms. Dillree was appointed a general guardian (a person having authority over both the person and estate of the ward) under Chapter 35A of the North Carolina General Statutes. This was due to her declining mental state from Alzheimer’s disease. The guardian thereafter removed Ms. Dillree from the marital home away from her husband and into an assisted living facility where she would receive requisite care. Her husband’s own mental decline followed his wife’s removal from the residence. He, too, was subsequently declared incompetent and moved to a facility in another state. The parties had a significant marital estate which was critical to Ms. Dillree’s (and her husband’s) care. A critical element of this matter is that, prior to and following her removal from the marital residence, neither of the Dillrees had any intent to legally separate from one another. Despite having an imperfect marriage (whose isn’t!), the Dillrees’ separation from one another was purely a result of declining health and the need for around-the-clock care not because they were contemplating divorce.

Four years following the declaration of incompetency, the guardian filed a complaint seeking an equitable distribution of the marital estate on behalf of her ward as well as an interim distribution and injunctive relief to prevent the absconding of assets in joint accounts. The husband’s daughter subsequently filed a motion to dismiss on his behalf. She based her motion on a “lack of subject matter jurisdiction because Mr. and Ms. Dillree never legally separated, and, if they did, Ms. Dillree’s guardian did not have the authority to cause the separation.” The motion was denied and forms the basis of the appeal. The Court of Appeals ultimately agreed that the trial court lacked jurisdiction since the parties had never legally separated.

Holding

“We hold a general guardian lacks the authority to cause a legal separation on behalf of an incompetent spouse for purposes of equitable distribution. Because the guardian could not create a marital separation, Mr. and Ms. Dillree were not legally separated, so the trial court was without subject matter jurisdiction to hear the equitable distribution claim.”

Alternative Options for the Guardian

“Our decision shall not be construed to limit, in any way, a guardian’s statutory authority to physically separate an incompetent person from their spouse where it is in the incompetent person’s best interest. And, our decision notwithstanding, general guardians are not altogether foreclosed from accessing marital assets on behalf of an incompetent spouse. For example, a guardian may petition the trial court for a constructive trust. A guardian may also seek a charging order for the distribution of payments for the incompetent person’s health care. Finally, in the event of spousal abuse, a guardian unequivocally has the authority to take custody of the incompetent person, as Ms. Tobias has done in this case.” (citations omitted).

Important Excerpts and Relevant Statutory and Case Law

A trial court does not have subject matter jurisdiction over an equitable distribution claim before the date of separation. Standridge v. Standridge, 259 N.C. App. 834, 83638, 817 S.E.2d 463, 465-66 (2018).
The rights of the parties to an equitable distribution of marital property and divisible property are a species of common ownership, the rights of respective parties vesting at the time of the parties’ separation. N.C. Gen. Stat. § 50-21(a) (2021). See also id. § 50-20(k).
Separation begins on the date the parties physically separate with the requisite intention that the separation remain permanent.” Bruce v. Bruce, 79 N.C. App. 579, 582, 339 S.E.2d 855, 858 (1986). Living separate and apart “implies the living apart for such a period in such a manner that those in the neighborhood may see that the husband and wife are not living together.” Dudley v. Dudley, 225 N.C. 83, 86, 33 S.E.2d 489, 491 (1945).
It is well settled that general guardians are prohibited from maintaining an action for divorce on behalf of an incompetent person based on a year-long separation. The majority rule that a suit for divorce is so personal and volitional that it cannot be maintained by a guardian on behalf of an incompetent is sound. Freeman v. Freeman, 34 N.C. App. 301, 304, 237 S.E.2d 857, 859 (1977).
A guardian appointed in accordance with Chapter 35A of the General Statutes . . . may commence, defend, maintain, arbitrate, mediate, or settle any action authorized by this Chapter on behalf of an incompetent spouse. However, only a competent spouse may commence an action for absolute divorce. N.C. Gen. Stat. § 50-22 (2021).
Subsection 50-21(a) of Chapter 50 sets forth the general procedures for equitable distribution: “At any time after a husband and wife begin to live separate and apart from each other, a claim for equitable distribution may be filed and adjudicated.” However, neither this statute nor any other expressly grants a guardian the power to cause a separation for the purposes of equitable distribution or divorce.

May 19, 2023/by FamilyLaw