Guardianships: When owners of a family business are incapacitated or mentally ill.

Using Guardianships to Solve Problems of Incapacity and Mental Illness in a Business Setting | A Business Lawyer’s Opinion on the Issue and Process.

Mental illness and physical limitations can be extremely debilitating to business especially when businesses demand and require so much of their owners. The truth is that the ability to operate, manage, and make sounds decisions is key to life and business.

Generally, a guardianship in Washington State can be ordered when one presents a significant risk of personal harm based upon a demonstrated inability to adequately provide nutrition, health, housing, or physical safety. Alternatively or in addition if that person poses a significant risk of financial harm based upon a demonstrated inability to adequately manage property or financial affairs, a guardianship in Washington State can also be ordered by the court. For more information on guardianships visit Washington Court’s portal at http://www.courts.wa.gov/guardianportal/.  The process is easy in theory but complex in application.

When a business owner or part owner begins experiencing the kinds of limitations discussed above, people start second guessing the owner, including, employees, vendors, clients, customers, and family. If there are multiple business owners, they could help pick up the slack and cover for the business owner, but then that behavior starts to tax the business, which can cause resentment. In one instance, we have had a client who operated a family business that had multiple family members as part owners. One part owner manifested mental illness and could not control his behavior that became increasingly odd. Ultimately, the other family members/business owners asked this part owner to stop coming to the office. The mentally ill owner could not contribute work, resources, or financially to the business until he was treated for his illness, and, was a liability to the business as a part owner. The remaining family members | owners were forced to seek a guardianship from the court.  This story is not unique.

In Washington State and the greater Seattle area, you can begin this process on your own though in family business settings we do not recommend doing so. That said, the Washington state court system has a website with the forms required. Regardless of whether you wish to pay for a lawyer to help with the process, you are probably best served by discussing this with an experienced business law attorney in Seattle or in Washington State who handles guardianships. The process can be confusing and it involves several court appearances and filings that must be done correctly or could risk not having a guardian appointed.  In addition, there the court will have concerns about overreaching and abuse that must be addressed.

Sometimes you can avoid this issue altogether by pre-planning or using a durable power of attorney though this route has its own set of problems.   Sometimes if it is too late or the mentally ill party does not recognize their behavior as “off”, it is better to simply seek a guardianship.

An experienced business law attorney can be extremely insightful in the guardianship process in Washington State and the Seattle area because measures can be taken immediately to rectify situations, trouble shoot, and prevent bigger issues from occurring down the road. Seek experienced business counsel who has the experience and understanding of the operations of a business, not just knowledge or text book theory. Patrick Kwan is a Seattle area business attorney with the law firm of Rhodes Legal Group, PLLC.  In addition to decades of hands on business experience, Patrick provides counsel for guardianships involving businesses in Washington State. E-mail him directly to inquire about discussing your problem at patrick@rhodeslegalgroup.com or call to set an appointment.

Guardianships in the Seattle area and Washington state are not reserved for only business law matters. Guardianships in Washington state extend to anyone if there is a risk of significant harm to the person through a demonstrated inability to care for themselves personally or financially. For a closer look at guardianships, types, and the process, visit Washington State Court’s portal for guardianships. The portal provides an in depth look and description of guardianships in Washington State and what they entail. For the opinion of an experienced guardianship attorney in Washington State, contact our attorneys.

ABOUT THE AUTHOR

Patrick Kwan is an experienced business law attorney based in Seattle, Washington with over 25 years of business experience. For more information on Mr. Kwan’s attorney page.

With near over 25 years of business world experience as an entrepreneur, distributor and manufacturer, Patrick Kwan is the kind of experienced business leader and lawyer who understands business from conception to sustained, profitable, on-going operation. Mr. Kwan brings his proven track record of success in innovation, leadership, business growth, management, sales, and operations to the counsel and practice of law. As an attorney, he is highly motivated, resourceful, hard-working, goal-orientated, a great team player, well-organized, and able to transcend adversity. Read more >>

Patrick Kwan

With near over 25 years of business world experience as an entrepreneur, distributor and manufacturer, Patrick Kwan is the kind of experienced business leader and lawyer who understands business from conception to sustained, profitable, on-going operation. Mr. Kwan brings his proven track record of success in innovation, leadership, business growth, management, sales, and operations to the counsel and practice of law. As an attorney, he is highly motivated, resourceful, hard-working, goal-orientated, a great team player, well-organized, and able to transcend adversity. Read more >>
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