Guardianships exist in many forms. Likewise, the amount of work they require differs significantly among the variety of guardianships. Guardians are appointed over a person, over their property, or even over both. The two situations in which we most commonly encounter guardianships are related to minors and too incapacitated persons. Incapacity is a broad label, usually including any person who can no longer care for themselves or manage their own finances. This article addresses Guardianship Fees in New Jersey.
New Jersey has adopted the same fee schedule for guardians and trustees. The bifurcated approach that allows a guardian to take a percentage based fee on any income received during the year, and another percentage based on the principal. It should be noted, similarly to trustee compensation, a court can approve a fee larger than the statutorily prescribed limit for unusual or extraordinary services. These fees can be taken annually until the guardianship ends.
Guardians in New Jersey are entitled to a 6% fee on all income received by guardian annually.
Guardians are entitled to an annual commission on the corpus of the trust. This includes money that qualified as income in previous years and has since been reinvested. The statutory fee for all property is .005 of the first $400,000 and .003 on the value of the corpus that exceeds $400,000.
So for example, the corpus commission on a trust with a value of $3.5 million would be:
|$400,000 x .005 = $ 2,000|
|$3,100,000 x .003 = $ 9,300|
|Annual Corpus Commission = $ 11,300|
In addition to income and corpus commissions, when the guardianship is terminated, the guardian is entitled to a percentage-based termination fee. This fee depends on the value of the trust and amount of time they served as guardian prior to termination. Finally, the above fees and percentages change based on the number of guardians serving. The above assumes that only one guardian is serving. If more than one guardian is serving, a small percentage is added to the overall commission, to be divided among the serving guardians.
In our blog we will provide examples from case law of what happens when a Guardian charges a commission above these limits in New Jersey. Guardianship Fees in New Jersey is an important subject to both the Guardian, the incapacitated person and the rest of the family.
If you have questions about guardianship fees in New Jersey or any other estate planning concerns contact our office for a free consultation.
Great firm. Great people. Happy to refer folks in need to estate planning to Peter and his team. They do great work.
Peter and his staff handled all of our needs in a very professional and timely matter.
Peter has done a great job with the estate planning for my father. He is very thorough and patient as we, the family need to make decisions.
Peter Klenk ESQ is a thoughtful and capable attorney who we work with on estate planning issues. His firm recently provided us with new Wills, Power of Attorneys and our instructions regarding major health issues. These documents are important for estate and life planning. Peter and his team are masters in the complexities of Estate Law. We highly recommend Peter and his Associates to provide thoughtful advice and outstanding work on these complex issues of the law. Make sure your estate planning documents are up to date, and Peter can be relied on to do an excellent job. Well done Peter!
Knowledgeable lawyers, helpful attitude, fair fees.