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I am going to assume that this ward (the person who will be the subject of the guardianship) is an adult. If this is a minor, reply and let me know.
The ward does not have to live with the guardian. The guardian will, however, be responsible for the ward's decision making ability. Meaning, the ward will be able to make decisions for the ward on matters of medical, financial, and other matters. Often (especially if the ward has mental capacity issues), the ward's ability to enter into contracts is voided - the guardian has to do this on the ward's behalf.
The guardian will have a set of duties to the ward, which are outlined and explained HERE. This includes but is not limited to fiduciary duty, duty of loyalty, and other duties.
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