A guardianship is a court-mandated arrangement in which one person, a guardian, is tasked with taking care of a ward's nutritional, housing, health care and educational needs. If the ward is a minor, his parents must be deemed by the court to be unable or unwilling to meet the child's needs. Custody is awarded to the parent who makes legal decisions for the child in the event of a divorce or other separation.
Guardianship is generally established over a ward in a probate court and lasts until one of the following conditions is met: the death of either party, the ward turning 18 years old, a parent proving that she is capable and willing to care for the ward, a guardian's voluntary resignation of guardianship or a court's decision that the guardianship is no longer in the best interest of the ward. While a ward is usually a minor, he does not have to be in cases of physical or mental disability. Guardians are usually related to the ward in some way but generally not the parents. Guardians are required to make reports to probate court on the ward's well-being at least annually.
Custody is generally determined in family court and can change frequently as circumstances change. Custody is almost always awarded to parents, and only a child may have a custodian. The term "ward" is not used in custodial arrangements. Third-party custody is rare but possible, requiring the potential custodian to prove that both parents in an already extant suit are incapable of caring for a child. No annual report is required of a third-party custodian.
These two terms are similar but legally different and often interact in complex ways. Courts resolve any conflicts by asking what is in the best interest of the child.