Guardian Cannot Use IRAs to Pay Estate Expenses

A Florida appeals court rules that an emergency temporary guardian cannot keep and utilize a ward’s IRAs to pay guardianship estate expenses. In Araguel v. Bryan, (Fla. Dist. Ct. App., No. 1D20-2789, August 17, 2022).

Ms. Jane Kaigler Araguel had three IRAs and appointed her children, Mr. Patrick J. Araguel, III, and Mr. Leslie Landon Bryan, as beneficiaries. Before she passed away, the lower court appointed a professional emergency temporary guardian, despite her sons’ requests to become their mother’s guardians. After Ms. Araguel died, the trial court approved the guardian’s motion to use Ms. Araguels’ assets — including her IRAs — to pay for the guardian’s expenses, his attorney’s fees, Ms. Araguel’s attorneys, and other costs associated with the guardianship.

Mr. Araguel, III, appealed. He asserted that because Florida law exempts IRAs from creditor’s claims, his mother’s IRAs must pass to him and his brother directly upon her death.

Relying on section 731.204(4), which provides that “claim” does not include estate administration fees, the guardian contended that Florida law allowed him to manage his ward’s property until the court discharged him. The guardian argued that the guardianship estate was not a creditor under Florida statutes.

On appeal, the court interprets section 222.21 of Florida law, which provides that the contents of retirement accounts are safe from creditors, except a surviving spouse or a person with an applicable domestic relations order. Examining the plain meaning of “claim” and “creditor,” the court concludes that guardianship estate fees constitute a creditor. As the statute does not exempt guardianship estate expenses, it bars guardianship estate claims on retirement accounts.

The appellate court rejects the guardian’s argument that it should use the meaning of “claim” from other sections of Florida statutes — sections 731.204(4) and 744.1025 — rather than the plain meaning. Section 731.204(4) clearly states when its definition of “claim” applies, and it does not reference section 222.21. Although section 744.1025 permits a guardian to retain possession of funds, no evidence shows that the IRAs continued to be in the guardian’s control after Ms. Araguel’s death, as IRAs transfer to beneficiaries upon a person’s death. When Ms. Araguel passed, her sons should have received the IRAs, and the estate creditors should not have had access to the assets.

The court of appeals reverses the portion of the trial court’s order that allowed the guardian to pay estate fees from Ms. Araguel’s IRAs.

Justice Thomas dissents, asserting that the emergency temporary guardian is not a creditor according to section 222.21. Section 744.527(2), he contends, allows the guardian to keep funds to pay the final estate administration fees after the ward’s death. Agreeing with the guardian, Justice Thomas relies on the definition of “claim” in section 731.204(4), which excludes estate administration fees.

Review the opinion in full.