Cases and Issues of Adult Guardianship in Korea
Actress Yoon Jung-hee’s daughter filed for an adult guardianship trial at the Seoul Family Court, gathering social interest to the adult guardianship system. The adult guardianship system was newly legislated in a reflection that the prior incompetent persons system focuses only on financial support and does not consider individual will or situation. Two major changes were made; for one, voluntary guardianship via guardianship contract is introduced, which has made it possible to respect the adult guardians’ own intention in preference. In addition, the guardian’s integrity has been guaranteed by the new guardian supervisor system. Focusing on the two aforementioned characteristics of the guardianship system, this report provides further description on the legislation itself and how it is practiced. Most importantly, this paper analyzes 2017 GoDan284 and 2017Se515, which are two recent leading cases of adult guardianship system and suggests the future direction of adult guardianship system.
Recently, there has been a series of legal dispute over the appointment of actress Yoon Jung-hee’s adult guardian. In 2020, the three siblings of Yoon Jeong-hee filed a lawsuit against Yoon’s spouse Baek Gun-woo and their daughter Baek Jin-hee at the French court and lost the trial. Nevertheless, Yoon Jeong-hee’s brothers insisted that Yoon’s guardians did not give her proper care, but rather, embezzled her property. In response, Baek Jin-hee filed for an adult guardianship trial at the Seoul Family Court.
Likewise, several Korean chaebols, such as Lotte, have been disputing over who will be the guardian of their retired CEO. This is because the position guarantees a large inheritance. After a series of similar events, the adult guardianship system has gained public interest.
Adult guardianship in Korea has a short history; in fact, it was first implemented on July 1st, 2013. Based on partial amendments made to the Civil Act (March 7th, 2011), adult guardianship has since then replaced the traditional ‘incompetent person system.’
Both systems share a common goal-protecting the rights of those who lack the ability to make decisions. Nevertheless, the previous ‘incompetent person system’ had continuously been criticized in various ways. Since the incompetent person system primarily focused on financial aid, the overall welfare of incompetent and quasi-incompetent persons was not under its coverage. On top of that, one’s competence was uniformly determined, without thorough consideration of individual circumstances or the ward’s will. Only those with significant mental disabilities were meaningfully aided under the system.
The adult guardianship system was introduced to address such problems. Notable changes have been made; guardianship is now categorized into different types, people can make guardianship contracts, and procedural acts have been improved. Eight years have passed since the enactment of the law, and there is few public opinion against the enactment itself.
However, the adult guardianship system is facing a new phase. With the increase of the number of elderly people, dementia patients, and disabled people, more people are aided by the system. The more cases, the more blind spots. In addition, when an issue of inheritance is combined, the whole subject matter becomes even more complex.
With that being said, this article will analyze two recent leading cases regarding adult guardianship and discuss their implications. Introducing the adult guardianship system of the Korean civil law would be a good start.
Ⅱ. Guardianship System of Korean Civil Law
The adult guardianship system is subcategorized into two: legal guardianship and voluntary guardianship. Legal guardianship is again divided into adult guardianship, limited guardianship, and specific guardianship. Adult guardianship targets wards who suffer from severe mental constraints that lead to constant lack of ability to handle his/her own affairs. Limited guardianship is for those who suffer similar difficulties from time to time. Specific guardianship is used when the ward can handle most affairs by himself/herself, except for certain matters that need help from a guardian.
In contrast, arbitrary guardianship comes into practice by signing a guardianship contract to entrust one’s affairs to the person he/she trusts. It is done just in case his/her mental ability weakens in the future, even if he/she is currently capable of making decisions. As long as the contract is valid, the guardian appointed by the ward, the “voluntary guardian,” handles affairs according to the contents of the contract. Legal guardianship does not take place in this case. For the contract to be valid, it needs to be signed and notarized. Then the Family Court will appoint a voluntary guardianship supervisor to look after the guardian’s performance.
Under the previous system, the relative council served as a supervisory agency for guardians. However, because it did not perform its original function properly, the guardian supervisor system was introduced. The guardian supervisor can supervise the affairs of the guardian and can take legal actions to protect the ward at times when circumstances are urgent. The guardianship supervisor also acts on behalf of the guardian in a conflict of interest between the ward and the guardian.
Ⅲ. Case #1 – Jeju District Court Decision 2017GoDan284 Decided November 8, 2017
After a car accident in 2011, A (51) has suffered from a first-degree brain lesion disorder and quadriplegic disorder. A’s only kin was his biological brother, B. While B was taking care of A from time to time, B applied to the Jeju District Court for the initiation of adult guardianship in 2014 and was appointed as A’s adult guardian the same year. In February of the following year, B transferred 140 million won of insurance money that A received from the car accident to his bank account, took out 120 million won, added it to his bank loan, purchased a villa, and completed registration of the villa in his name.
In August 2016, the court discovered this fact during supervision and recommended that B return the cash to A’s account or transfer B’s share of the villa, worth 120 million won, to A’s name. But B repeatedly ignored the court’s recommendation. B claimed that he did not have enough cash to pay the gift tax necessary in handing over the shares to his younger brother. On top of that, he demanded 240 million won as his guardian compensation, saying that he should be paid for taking care of A for the last five years. In October 2016, the court suspended B’s authority as guardian and appointed an expert; an attorney, as a temporary guardian. The attorney accused B of embezzlement and B was soon charged with it.
This case clearly shows that the success or failure of the guardianship system is not just about appointing guardians; it depends on how consistent the guardians are thereof. In order to guarantee that the legal guardians faithfully serve their duties, they are obliged to report to the court every year on how they managed the ward’s property. The court keeps track of such record and determines who goes off the rail. However, the number of guardianship cases is increasing at a rapid pace and the number of court personnel is far from enough. In this context, it is worth discussing ways to ensure the guardian’s devotion.
Returning to the case, the court sentenced B to eight months in prison. The key issue was whether the exceptional rule of crimes and complaints among relatives to property offenses (or ‘the exceptional rule’) also applies to adult guardians. The exceptional rule exempts people from punishment in the event of property crimes such as theft and embezzlement among kinsmen. The clause is aimed at preventing excessive intervention of state power in family affairs. Since the introduction of the adult guardianship system, there has been a lot of controversy in the legal community over whether the provision applies to the misconduct of guardians as well. This is because if the provision is applied to guardians, who are at most cases the relatives of the wards, they would not be punished even after they use the wards’ property for their own good.
The court’s conclusion was as follows: it is true that if the guardian is the ward’s relative, he or she would be in principle exempted by the exceptional rule. However, once that relative becomes one’s official legal guardian, he/she bears public obligations to manage the ward’s property in accordance with the principles of good faith. Thus, the exceptional rule is not applied in this case.
This ruling is significant as the first legal judgment on the relationship between adult guardians and kinship rituals, which has been controversial ever since the adult guardianship system was first introduced. In fact, since there had not been relevant leading cases in Korean courts, the prosecutor referenced cases of Japan, whose court has a clear principle not to apply exceptional rule to cases of adult guardians. Considering the ongoing demand on adult guardianship, it is crucial to rethink the relationship between the exceptional rule and guardianship crimes.
Ⅳ. Case #2 – Supreme Court Decision 2017Se515 June 1, 2017
C was called for an adult guardianship trial due to his age limitation in the ability to make decisions. In 2016, the first trial court held a limited guardianship trial, to which C later appealed. While the trial was ongoing, C signed a guardianship contract, completed the registration, and requested the family court to appoint a supervisor of voluntary guardianship. C also requested to discontinue the limited guardianship trial. The Court of Appeal rejected the appeal, but C reappealed.
Put in simple terms, this case is a matter of conflict between legal guardianship and voluntary guardianship. The decision for the case not only answers the question, but also stresses the principles of adult guardianship. As mentioned earlier, the biggest reason for the establishment of the adult guardianship system was to reform the existing incompetent system that defined the decision-making skills of wards uniformly without considering individual circumstances or the ward’s will. Therefore, the primary aim of adult guardianship is to respect the right of self-determination of wards. Voluntary guardianship via contracts is the most consistent method for the goal.
The Korean civil law also reflects this. Article 959-20 of the Civil Code writes that in cases where a guardian contract has already been registered, trials to authorize adult guardianship, limited guardianship, and specific guardianship is only allowed when the ward’s rights are protected by doing so.
Considering the ideology of the adult guardianship system and civil law regulations, voluntary guardianship comes before legal guardianship if the guardian contract is registered. However, civil law regulations are not clear on the ‘time of registration of a guardian contract’. Therefore, as in the case above, it is problematic if a guardian contract is signed and registered according to his/her will after his/her relatives apply for a court guardianship trial.
The court decided that the regulations above apply to cases not only when the contract is registered before the trial for legal guardianship begins, but also after the trials have begun. Therefore, in principle, the court would have authorized voluntary guardianship. However, legal guardianship can be chosen to be an alternative if it is a better choice for protecting the ward’s interests. In such cases, the guardianship contract is ineffective. In this very case, the appeal was rejected because the need for legal guardianship was recognized, considering various socioeconomic circumstances.
The significance of this ruling is that legal guardianship has only supplementary qualities to voluntary guardianship. That is, even if a trial for legal guardianship is in progress, it can change into a voluntary guardianship if the ward wishes so. Of course, it would not be the case if the court believes that the legal guardianship is a better choice, but it is very unlikely to happen.
A guardian contract is one of the most effective ways to prevent inheritance disputes. The aforementioned inheritance issue of Yoon Jung-hee and Korean chaebol families could have resolved without major disputes if the guardian had signed a guardian contract in advance when the ward had the ability to make decisions. If a guardian is not designated through a contract and one’s mental capacity is reduced due to disability, disease, and aging, etc., the children often contend for legal guardian positions, in which they can engage in the disposal of the ward’s property. Such disputes often end up in the Supreme Court. There would be no conflicts like this if guardians are set in advance.
Nevertheless, the number of sponsorship contracts in Korea is very low. Even if contracts are signed, they often turn out to be futile since passing the guardianship supervisor’s selection trial is tough. Often, people fail to prove that the ward had intact decision-making abilities at the time they signed the contract. Contracts that are excessively disadvantageous to the wards are also deemed to be signed under an imperfect mental state and considered invalid. 
In order to increase the accessibility of a guardian contract, it is urgent to develop a guardian contract model. Raising awareness of the guardian contract and referring to legislative examples of other countries where the guardian contract system is stable will be a good start.
In addition, if the trust system is activated, the property management of the defendant can be stably carried out according to the guardian’s will. A trust is a system in which a consignee chooses a trustee and transfers property rights to the trustee. Then, the trustee manages the property according to the consignee’s wants and attributes the revenue to the beneficiary designated by the consignee. If it is impossible to withdraw or change the trust contract, or at least require the consent of all first-priority heirs to do so, the property will be protected even after the ward’s ability to withdraw or change the contract is reduced. If the ward faces difficulties in managing real estate lease and financial assets, trustees can take care of assets on behalf of the ward. It is also possible to design various asset successions through trusts. Another great advantage of the trust property is that the creditor of the trustee or trustee cannot enforce it, thereby reducing the risk of bankruptcy.
The traditional perception in the Korean society about adults with low decision-making abilities was that they should be protected by excluding them socially and economically. In modern times, however, perspectives have changed. Wards should be supported to have equal rights to others, to make the most of their abilities, and to live according to their intent. The implementation of an adult guardianship system based on the fundamental ideology of “respecting the right of self-determination” was the first step for the change.
Although adult guardianship rates are far from high, demand for the system is expected to increase due to changes in family types, rapid aging, and increased dementia incidences. As mentioned earlier, if the guardianship supervision continues to ensure quality guardianships and the voluntary guardianship contract and trust system are activated, the goal of the adult guardianship system will achieved.
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