CPG CPG Property and Asset Management 1 — Questions and Answers
Question 1: What is the primary fiduciary duty of a CPG when managing a ward's property and assets?
- Maximize investment returns regardless of associated risk
- Manage assets prudently and solely in the ward's best interest (Correct answer)
- Combine the ward's assets with the guardian's for easier management
- Liquidate all non-cash assets as quickly as possible
Correct answer: Manage assets prudently and solely in the ward's best interest
A CPG's primary duty is to act as a prudent fiduciary, managing the ward's property and assets solely in the ward's best interest.
Question 2: Which investment standard typically governs decisions made by a professional guardian regarding a ward's assets?
- The speculative investor standard seeking maximum gains
- The prudent investor standard requiring care, skill, and caution (Correct answer)
- The guardian's personal investment philosophy and preferences
- The maximum return standard regardless of risk level
Correct answer: The prudent investor standard requiring care, skill, and caution
The prudent investor standard requires guardians to make investment decisions with the care, skill, and caution that a reasonable, prudent person would exercise.
Question 3: Why must a CPG maintain separate accounts for each ward's funds?
- It is more convenient for the guardian's bookkeeping
- It prevents commingling and protects each ward's assets from being mixed with others (Correct answer)
- Banks require all customers to maintain separate accounts
- It reduces the guardian's personal tax obligations
Correct answer: It prevents commingling and protects each ward's assets from being mixed with others
Maintaining separate accounts prevents commingling, which protects each ward's assets and preserves clear financial accountability for every individual ward.
Question 4: What is the purpose of completing an inventory at the commencement of a guardianship?
- To calculate the guardian's fee schedule
- To document all of the ward's assets and liabilities at the time guardianship begins (Correct answer)
- To record only the ward's checking and savings accounts
- To establish the guardian's legal authority over the ward
Correct answer: To document all of the ward's assets and liabilities at the time guardianship begins
An inventory documents all of the ward's assets and liabilities at the inception of guardianship, establishing a critical baseline for fiduciary management.
Question 5: When should a CPG obtain an independent appraisal of a ward's real property?
- Never, because appraisals are prohibitively expensive
- Only when explicitly ordered by the court
- Before selling, transferring, or making significant decisions about the property (Correct answer)
- Only after a sale has already been completed
Correct answer: Before selling, transferring, or making significant decisions about the property
An independent appraisal should be obtained before selling, transferring, or making significant decisions about real property to verify fair market value.
Question 6: A CPG discovers a ward owns real property that is vacant, generating no income, and incurring high maintenance costs. What should the guardian do?
- Immediately sell the property without seeking court approval
- Do nothing since the property legally belongs to the ward
- Evaluate all available options and seek court authorization before making major decisions (Correct answer)
- Transfer the property to a family member for management
Correct answer: Evaluate all available options and seek court authorization before making major decisions
The CPG should evaluate all options—including sale or rental—and seek court authorization before making any major decision regarding the property.
CPG CPG Property and Asset Management 1
What is the primary fiduciary duty of a CPG when managing a ward's property and assets?