Guardianship can be instituted for individuals who have reached the age of 18 but are unable to make decisions for themselves in personal and/or financial matters.

When guardianship is instituted for an individual, it means that they are appointed a guardian who acts on their behalf in the matters covered by the guardianship.

In most cases, the individual under guardianship remains legally competent and can still make decisions independently. They also retain their right to vote.

However, in some situations, there may be a need to prevent an individual from being financially exploited or entering into disadvantageous agreements, such as purchasing unnecessary items at a high cost.

In such cases, the individual's financial legal capacity may be restricted, making them legally incompetent to enter into binding financial agreements.

When an individual becomes legally incompetent, they also lose their right to vote in legislative and parliamentary elections. The guardian cannot exercise the voting rights on behalf of the legally incompetent individual.

A guardianship should not entail more than is absolutely necessary.

It constitutes an intrusion into the personal freedom of the individual, as the guardian can make decisions on behalf of the individual.

A guardianship can be limited to cover only what is necessary in a specific situation. For example, it may include matters such as inheritance, the sale of real estate, or necessary personal and financial decisions regarding plans to move to a nursing home.

A guardianship can also be time-limited.

There are three main types of guardianships. These are:

• Ordinary guardianship
• Guardianship with deprivation of legal capacity
• Co-guardianship

Ordinary guardianship

Before ordinary guardianship can be instituted, several conditions must be met. 

If the individual seeking guardianship is not the person themselves, the conditions are the most stringent. These conditions include:

• The individual must have a mental illness (or severe dementia), a mental disability, or a severely deteriorated health condition. This must render the individual incapable of making decisions on their own.
• The individual must require a guardian. Not everyone who needs a guardian meets the above-mentioned conditions.

The requirements for instituting ordinary guardianship are not as strict if individuals themselves apply. In such cases, the Family Law Administration can institute guardianship if the individual, due to illness or severely deteriorated health, is unable to manage their own financial affairs. In such cases, guardianship may only cover financial matters.

Guardianship with deprivation of legal capacity

Deprivation of legal capacity can be imposed in addition to regular financial guardianship if it is necessary to prevent the individual from endangering their assets, income, or other financial interests significantly, or to prevent financial abuse.

It is essential to note that ultimately, when legal capacity is taken away from individuals, guardianship concerning financial matters is implemented.

Individuals deprived of legal capacity are legally incompetent and cannot enter into binding financial agreements unless it is otherwise determined. They also lose their right to vote in legislative and parliamentary elections.

The Courts have the authority to deprive individuals of legal capacity.

Co-guardianship

Co-guardianship is the least intrusive form of guardianship. The prerequisite for establishing co-guardianship is that the individual themselves applies for guardianship.

The requirements for implementing financial co-guardianship are not as strict. However, for a financial co-guardianship to be established, the individual must function well enough to collaborate with the co-guardian regarding financial matters. Co-guardianship can be established for individuals who, due to being inexperienced, having deteriorated health, or similar circumstances, require assistance in managing their own assets or handling other financial affairs.

Co-guardianship can be limited to cover specific financial assets and transactions. Co-guardianship cannot be established for personal matters.

The co-guardian and the individual work together in the affairs covered by the co-guardianship.

There is no oversight of co-guardianships. For example, rules regarding the submission of financial statements to the Family Law Administration for approval, asset management, and obtaining approval from the Family Law Administration for specific actions (dispositions) are not applicable to co-guardianships.

The following individuals and entities can apply for the establishment, modification, or termination of guardianship:

• The individual themselves
• Spouses, children, parents, siblings, or other relatives or next-of-kin
• Municipal councils
• Guardians
• Chief of Police
• The Ministry of Social Affairs (the Department of Social Services)

Others apart from the abovementioned are not eligible to apply.

The application form is available upon request. The application must be submitted to the Family Law Administration. If the application is for the deprivation of legal capacity, it should be sent to the Court (Føroya Rættur).

When the Family Law Administration receives an application for guardianship, the individual (the one for whom guardianship is being sought) is always informed about the application, regardless of how little the individual may understand.

The Family Law Administration also always notifies the relevant parties, but not if the individual themselves applied for guardianship.

The Family Law Administration requests a medical opinion from the individual's doctor. The doctor is asked to provide a medical assessment so that the Family Law Administration can determine whether the health requirements for guardianship are met. Please note that a specific medical assessment is required for guardianship purposes. The form for medical assessment is available upon request. 

If the individual resides in an institution, the Family Law Administration requests a statement from the institution.

Once the Family Law Administration has received the medical assessment and a possible statement from the institution, the individual for whom guardianship is sought is informed about the contents of the medical assessment and the statement from the institution. The individual can then request a meeting with the Family Law Administration or provide comments on the matter before a decision is made.

After this, the Family Law Administration usually makes a decision on the guardianship case.

If the Family Law Administration determines that the case is questionable, it may refer the case to court. This applies, for example, if the individual for whom guardianship is sought opposes the guardianship.

A guardian is a person who makes decisions in financial or personal matters on behalf of an individual for whom guardianship has been established. This occurs because the individual requires such assistance and is not capable of making such decisions themselves.

Therefore, a guardian is someone who makes necessary decisions for the person under guardianship.

When the Family Law Administration institutes guardianship, a guardian is appointed simultaneously. The guardian can, for example, be someone within the family or someone else who knows the individual well.

The Family Law Administration can only appoint one guardian and cannot compel anyone to become a guardian.

If it is not possible to find a suitable guardian or if there is disagreement among the closest relatives about who should be the guardian, the Family Law Administration may appoint one of the guardians registered with the Family Law Administration (a fixed guardian).

A fixed guardian has the right to demand payment for the work related to the guardianship. Typically, the payment is sought from the person for whom guardianship is instituted.

The guardian is responsible for managing the affairs of the individual for whom guardianship has been instituted and acts (makes decisions) on their behalf in matters covered by the guardianship.

The guardian must ensure that the income is used for the benefit of the individual under guardianship and ensure that any assets are preserved and provide suitable utilization.

The guardian cannot act unlimitedly because several actions (dispositions) that the guardian is responsible for require prior approval from the Family Law Administration. 

The tasks and duties of the guardian are described in the guardian directions.

If the guardian neglects their duties to the detriment of the person under guardianship, they are liable for any damage caused intentionally or negligently.

Below are mentioned some tasks and duties of the guardian.

Management of assets

If the guardianship involves assets totalling DKK 75,000 or more, the guardian is not allowed to keep the money in regular banking accounts but must place it in an approved management department. BankNordik/Føroya Banki and Betri Banki are approved management departments.

Furthermore, there are fixed rules regarding how the guardian can invest the assets.

The Family Law Administration may permit the assets to be invested differently if there are specific circumstances warranting such actions.

Approval from the Family Law Administration is required if assets, in return for a mortgage, are to be invested in real estate owned by the guardian or if assets, in return for a mortgage, are to be invested in real estate that is permanently or partially furnished and intended for special business operations.

Income accounting

The guardian must keep accounting records of how they manage the income of the individual for whom guardianship has been established. Every year, the guardian must submit an income account to the Family Law Administration. The forms for maintaining the income account are available upon request.

The calendar year is the accounting year, and the guardian must submit the income account before June 1 of the following year.

Regarding the approval of the accounts, the Family Law Administration examines whether the guardian uses the income for the benefit of the individual under guardianship, ensures that the utilization is reasonable, and that the guardian has obtained approval from the Family Law Administration for actions (dispositions) requiring approval.

Asset accounting

The guardian must keep accounts for the portion of the assets they manage, but they are only required to submit them if the portion they manage is DKK 75,000 or more.

Use of assets

Regardless of whether the assets are held in a regular Faroese bank account or in an approved investment department, the guardian is not allowed to use the assets without prior approval from the Family Law Administration.

If it becomes necessary to use a portion of the assets, the guardian must submit an application to the Family Law Administration. The application form is available upon request.

The Family Law Administration then assesses whether the proposed action (disposition) is reasonable and beneficial for the individual under guardianship, taking into account the amount involved.

Gifts

The guardian must obtain approval from the Family Law Administration before giving gifts from the income. However, gifts with insignificant value do not require approval. There is no specific threshold set for determining when a gift has insignificant value. Gifts under DKK 500 related to Christmas and birthdays presents for recipients with whom the individual under guardianship is related to are generally exempt from approval if they are financially reasonable and meet the recipient's needs.

The Family Law Administration usually exercises caution in approving larger gifts. Larger gifts are typically approved only if it has been customary to give gifts of similar size to the specific recipient, or if there is a special reason. For instance, the reason could be that similar gifts were given before the guardianship, or the recipient is experiencing financial difficulties. If the gift is to be made from the assets, the Family Law Administration is even more cautious about approving it.

Real estate

If the individual under guardianship wishes to acquire real estate, it requires approval from the Family Law Administration, even if the property is received as a gift or inheritance, whether wholly or partially.

The Family Law Administration is usually cautious in approving the purchase of real estate.

If it is necessary to mortgage or sell the real estate held under guardianship, approval from the Family Law Administration is also required. 

Creating debt

The guardian must obtain approval from the Family Law Administration to incur debt beyond what is typically required to meet ordinary daily needs.

Unusual transactions (dispositions) otherwise

The guardian must obtain approval from the Family Law Administration for all unusual transactions (dispositions).

It is not possible to fully list what qualifies as unusual, thus requiring approval from the Family Law Administration. But for instance, it can be mentioned that the guardian cannot enter into agreements with an insurance company on behalf of the individual without approval. Buying and selling of assets may also be an unusual disposition requiring approval from the Family Law Administration. Moreover, transactions involving currency exchange, such as in real estate or unusual assets, also require approval from the Family Law Administration.

If the guardian is uncertain whether approval is necessary for a particular transaction, it is always advisable to consult with the Family Law Administration.

The appointment as guardian may be revoked if guardians misuse their role or fail to demonstrate suitability for the tasks as a guardian. The appointment of guardianship also lapses if the guardian becomes subject to guardianship.

There is no requirement for revoking the appointment solely based on direct misuse of their duties or unsuitability for the role. Revocation may also occur if it becomes necessary for the welfare of the individual under guardianship. This may occur, for example, in cases where cooperation is severely lacking, without implying that the guardian has neglected their duties.

If circumstances arise that necessitate a more limited or wider-ranging guardianship, the guardianship arrangement should be amended. This requires notification to the Family Law Administration about the proposed amendments. If the Family Law Administration itself becomes aware of the altered needs, it may independently decide that a guardianship arrangement should be amended.

If a married person is under guardianship and the spouse is guardian, the Family Law Administration oversees the guardianship as described above. 

If the guardian is someone other than the spouse, the guardian and the spouse jointly manage the part of the community property covered by the guardianship. This means, among other things, that:

• The guardian is not required to submit accounts to the Family Law Administration.
• It is not necessary for the guardian to obtain approval from the Family Law Administration for specific actions (dispositions), such as the sale of real estate.
• The property does not need to be managed in an approved management department.

Minors, i.e., individuals under 18 years of age who are not married, are under guardianship. These children and young people are legally incompetent. This means that:

• They cannot independently bind themselves financially by entering into contracts.
• They cannot manage their own property.
• It is the guardian/guardians who act on their behalf when it comes to financial matters.

In the Guardianship Act Chapter 6, you can read more about the actions (dispositions) that minors aged 15 or older can carry out independently.

The person with parental custody is the guardian. If parents have joint custody, both parents are guardians and act together and make decisions jointly on behalf of the minor.

If the guardians cannot agree on a financial decision, the Family Law Administration will make the decision for them.

If a guardian abuses their role, or proves to be unsuitable for the task, or if it is necessary due to the guardianship of the minor, the Family Law Administraion may remove the guardianship from the person who has parental custody.

If the parents have joint custody and one of the parents becomes subject to guardianship according to the rules on guardianship for adults, or loses guardianship, the other parent becomes the sole guardian.

If both parents lose guardianship, or if a parent who has sole custody loses guardianship, the Family Law Administration appoints a new guardian.

Guardians of a minor child must always obtain approval from the Family Law Administration to use the child's property. This may be necessary, for example, if the minor has inherited or received compensation. Approval must be obtained before the property is utilized.

If it concerns money that the minor has earned through work, received as a gift, or acquired through unrestricted inheritance via testament, approval is not required.

It is not customary for parents who act as guardians for their minor children to have property released for regular expenses, such as food, clothing, housing, and recreational activities. The reason for this is that parents have a duty of maintenance towards their children.

Therefore, as a general rule, parents must cover such expenses themselves. However, the Family Law Administration may, in exceptional circumstances, release funds if the parents are financially struggling. In such cases, a thorough assessment is made in each individual case. Significant factors include information about the child's financial situation and personal circumstances, including possible handicaps, as well as information about the parents' financial situation and personal circumstances.

The above applies regardless of whether the property is held in an approved management department or in a regular account.

Property of DKK 75,000 or more

If the property held within the guardianship amounts to 75,000 kr. or more, it must be deposited into a management department. Approved management departments include Føroya Banki and Betri Banki.

Property below DKK 75,000

If the property held within the guardianship amounts to less than 75,000 kr., the guardian/guardians must deposit the property into an account at a bank. The account should be established in the name of the child and have a designation indicating that the account is under the guardianship management.