Who is a Legal Guardian?
A legal guardian is an individual who has the legal authority to care for the personal and property interests of another due to certain limitations or incapacity of the individual. Essentially, a guardian is any individual appointed by the court, usually in connection with a proceeding, to exercise the rights of the ward, subject to limitations , if any. A guardian is required to file an inventory and an accounting with the court on a regular basis. Such guardian is obligated to comply with any and all orders of the court in the guardianship proceeding.
There are two main types of guardianships. The first being a personal or general guardian. The second being a limited or special guardian. When the incapacity of the individual does not extend to all rights, a limited guardian may be appointed to exercise either specified rights, or all rights except those that may not be delegated, with the limitation stipulated in the order establishing the guardianship.
The Types of Guardianships
There are two types of guardianship: guardianship over the person and his/her property. The guardianship authority can either be exercised over the person or the property, or it can be exercised over both. In terms of people over whom the guardianship will be exercised, there are guardianships of a minor as well as guardianships of an adult. When the guardianship is over real estate, then this is known as guardianship over an incapacitated adult. The title of the guardianship will depend on whether the decision and directions are in reference to an adult or to a minor. Where management is over the property of a minor, it is known as "guardianship of a minor". Where management is over the property of an incapacitated adult, it is known as "guardianship over an incapacitated adult". Now if a court finds that an adult has become incompetent or has been incapacitated during majority, and is not yet dead, or if such person becomes incapacitated after majority, then the property of said person shall be managed by the guardian under the specified conditions.
Monetary Compensation for Guardians
In cases where a person has been appointed as legal guardian of a person or disabled person (legally termed "ward"), the appointed legal guardian may receive a compensation for the services. The compensation is based on the types of services to be performed as well as the time spent performing these services. Compensation typically involves a set hourly fee for the guardian’s services and expenses. Pennsylvania law (20 Pa.C.S.A. 5512) holds that all court appointed guardians of personal estate are entitled to reasonable compensation for their time and effort. This statute mandates approval of the compensation by the Register of Wills and/or the Orphan’s Court. In cases where the court holds a hearing to approve these fees, the amount of the compensation is set by the court.
The Pennsylvania Orphan’s Court Judges’ and Registers’ Fees Schedule (Judges’ and Register’s Fee Schedule) outlines the exact amounts as certain fees are based on the appraised value of the estate. Many times however, cases with undisputed facts will not require a court hearing, in this event it is common for fees to be indicated in the pre-printed settlement forms requested by the Register of Wills.
Although the Judges’ and Register’s Fee Schedule provides guidance, there are often instances where the court may award additional compensation to the guardian in excess of those amounts. In guardianship matters, the Register of Wills and/or Orphan’s Court must hold hearings to determine whether compensation outlays were reasonable and thus subject to approval by the court. In addition to guardian compensation, the court will examine other fees such as attorney fees, costs associated with the administration of the estate, and fiduciary commissions.
Ways Guardians are Compensated
Guardians are typically compensated through the estate funds. When there are sufficient assets, Guardianship fees are often paid by Court order. In a typical scenario when an elderly person appoints a relative as Guardian or as Power of Attorney, that person is often paid directly from the estate and for a Commission. They are also paid for their obligations under the law (bills, taxes, funeral, Guardianship accountings and inventories and other distributions) plus their time, if any. These payments are made pursuant to Court approval. Typically, the Court will grant compensation for the Administrator for the time and services they provided. The issue is whether the compensation is reasonable or excessive. In the absence of any unusual scheduling situations, the prevailing and customary rates in one’s geographical area will be considered. These rates are sometimes low, confirming the antiquated view of the legal profession’s worth. If the estate is large, meaning in the hundreds of thousands of dollars or more, the Guardian’s salary might have to be increased, if the estate is likely to suffer erosion due to inflation over the decades. Centralized, computerized accounting methods can often help greatly in the time taking to facilitate Guardian responsibilities.
Determining the Amount of Compensation
How much a legal guardian can get paid largely depends on a couple of factors: first, the amount of time they spend serving in that role. Second, the state guidelines where they are the guardian providing the services.
Determining Time Commitment
The role of guardian can easily become a full-time job. Some of the duties include: These are just some of the responsibilities and the time required will vary from guardianship to guardianship. The elderly or disabled individual could have chronic or acute medical conditions, or mobility or communicative limitations, that require an increased level of care and attention. Because the work can be time-consuming, the guardian may want or need to hire help. That’s why legal guardians are usually better off hiring a speculative attorney with knowledge of Medicaid, guardianship processes, and the like so that they can spend more time completing the work required. The extent of the time commitment will also depend on the nature of the guardianship. If the Guardianship is of the person , then there will be a bit less time commitment as compared to guardianship of the estate. Guardianship of the estate may require the guardian to work with an accountant or CPA to some extent. This increase in time will justify a higher rate being charged.
State Guidelines
Each state has different guidelines governing how much a legal guardian can be paid for their time. For example, guardianship payment rates are classified according to different categories or levels of care. A judge can establish these guidelines, in addition to any factors specifically pertinent to each case. According to Iowa Code 633.635, the guardian of the estate "must reasonably expend the funds required for the ward’s welfare and make a diligent effort to collect and receive all claims and money due the ward." This also includes "all money and personal property received by the fiduciary on behalf of the ward." States are mandated to periodically review the appropriateness of the rate schedules.
Ethical and Legal Implications of being a Guardian
Compensation for guardians is a sensitive issue. This is particularly true because these obligations are often voluntary, and people tend to have both negative and positive feelings regarding money in general. This is discussed more in-depth in the section on "against petition," but suffice it to say that guardians should not enter into the role for the money, but they should be aware that their actions as a guardian have great impact on the estate of the ward, and on the funds of the ward. They should be compensated fairly, especially when the job puts burdens on their time and family.
The law is strict in its obligations to both guardians and conservators. Florida Statutes §744.361, which primarily deals with the guardian’s general duties, states that: A guardian of the property of a minor or a person with a disability may not personally profit from the handling of the ward’s estate. The guardian may be reimbursed from the estate for all reasonable expenses, including costs of travel, food, lodging, and other necessities. A guardian may receive reasonable compensation for his or her services from the estate of the ward only if authorized by the court.
Additionally, guardianship is a special privilege granted by the court. There are many safeguards for the benefit of the ward, such as requiring the guardian to file accountings with the court so that the court can oversee the administration each year. A guardian must also observe basic fiduciary principles. Again, the Florida Statutes describe what these duties are. The failure to adhere to these duties can be harshly prosecuted in court. Florida Statutes ch. 744, part VIII creates crimes for the dishonest administration of guardianships. Some of these crimes are felonies. A guardian might have a personal civil liability to the ward for the misappropriation of the funds or other assets entrusted to the guardian. The breach of fiduciary duty claim requires proof to a higher standard than just negligence. It is up to the court to determine whether the breach of fiduciary duty occurred. The guardian must be prepared to defend against any accusations.
Guardianship Compensation Essentials
In order to receive compensation, a guardian must file a motion with the court seeking compensation for services rendered on behalf of the ward. Rule 12.440(a) of the Florida Probate Rules provides the procedure by which a guardian can request a hearing regarding fees. It states:
(a) Request for Hearing.
- (1) In addition to matters set forth in rule 5.020(a), a person desiring a hearing shall file a motion stating that a hearing as to the matters specified therein is desired. The motion shall be served as required by rule 5.040. If a hearing is requested, the court shall consider the matter and enter a decision as it may deem proper.
- (2) A request for a hearing on any timely objection or audit exception shall be filed in writing within 20 days after service of a copy of the objection or the filing of the accounting. Upon failure to request a hearing in accordance with this subdivision, the action or proposed order shall be deemed approved and the proceeding closed without a hearing.
- (3) Upon application of an interested person for a hearing on a matter, the court shall direct the filing of notice of such hearing and other matters pertinent to an adjudication of such matter, including necessary notice to interested persons, and fix the time and manner of service of the notice.
- (4) Unless otherwise ordered by the court, the affiant for any verified statement filed with the court shall be deemed to have established a prima facie case for the matter stated therein.
- (5) In the absence of a motion filed pursuant to this subdivision, upon expiration of 30 days after service pursuant to rule 5.040 of a notice of opportunity to request a hearing on any matter, without a timely request by an interested person, the matter shall be deemed approved and the proceeding closed without hearing.
Notably, subsection (2) above states that upon failing to request a hearing, the matter will be deemed approved. If you receive a notice of opportunity to request a hearing pursuant to this rule, you MUST request a hearing in order to object to the issues being noticed. If you fail to do so in accordance with the rule, you are waiving your right to object.
State-Specific Compensation Info
Even though federal law does not regulate how much compensation can be paid to a guardian, the states are, of course, free to do so, and a number of them do. For instance, some states have statutes that set the guardian compensation at a specific percentage of the ward’s estate, while others allow for a sliding scale based on the amount of the estate.
Some state statutes reference percentages, but provide the courts wide discretion in setting the amount of compensation. This allows the court to look at a number of factors that can affect compensation.
For example, Mississippi law states that a guardian of an "incapacitated person" in that state is entitled to reasonable compensation from the ward’s assets. While the statute does not provide a percentage, the courts have determined that compensation on a sliding scale from 5% of the ward’s gross estate for estates up to $20,000, to 3% for estates of $500,000 and above is reasonable .
Other states allow for guardian compensation to be set by either the court or a local probate association. In Maine, for instance, the law requires that guardian compensation fees be "reasonable" and that the compensation be based on the number of hours spent by the guardian and the skill necessary to perform the services. The Maine Bar Association has set cost guidelines for guardian compensation that range from $200 to $400 per hour depending upon what services the guardian is performing.
Pennsylvania, meanwhile, has taken a different approach to guardian compensation. Following its adoption of the Uniform Guardianship and Protective Proceedings Act in 1992, Pennsylvania no longer permits fiduciary commissions. Instead, guardians and conservators are entitled to have their reasonable expenses reimbursed. The only time the state appoints a paid guardian is when a state agency petitions the court to do so.