In Pennsylvania, guardianships exist in many forms, and the amount of work they require differs significantly among the variety and likewise the guardianship fees in Pennsylvania very. 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 incapacitated persons. Incapacity is a large label, usually including anyone who can no longer care for themselves or manage their finances.
The Pennsylvania Supreme Court is currently reviewing, with the help of a new Elder Law Task Force, the status of guardianships in Pennsylvania. The need for the Task Force arose due to an increasing number of guardianships, driven by an aging baby boomer population, and by a current lack of regulation. In Philadelphia alone, there were an estimated 5,000 guardianship cases in the last ten years.
Watching that trend leads to a question we often receive: what is the appropriate compensation for a guardian?
Guardians undertake a wide variety of tasks, for which they deserve adequate compensation. One way to address guardianship fees is the document signed by the ward creating and authorizing the guardianship. If compensation has not been specified, the guardian must be careful in determining their fee. Further complicating the problem is the fact that, in many situations, a guardian is appointed by a Court, not by the ward.
Ultimately, any fee charged must be “reasonable.” In defense of any fee charged, a guardian should keep detailed records of the time expended serving as guardian and of the nature of tasks completed. Attempting to recount years worth of actions is a monumental task if your fee should ever be challenged. A judge is much less likely to approve an unsubstantiated and under-documented fee.
For example, if a guardian happens to work as a financial advisor, he or she likely cannot charge his professional hourly rate for every action he makes as guardian unless the ward had previously agreed to this specific fee structure. In the Lundy Estate case, a judge found it inappropriate to charge the same hourly rate for all services and slashed the financial advisor’s claimed fee.
We will provide more examples of what “reasonable” guardianship fees in Pennsylvania look like in specific cases as new opinions are published on our blog.
If you have questions about guardianships or any other estate planning concerns contact our office for a free consultation.
Peter Klenk is the founding member of Klenk Law, a seven attorney boutique estate planning law firm. We serve clients in Pennsylvania, New Jersey, New York, Minnesota and Florida. Peter Klenk received his Masters in Taxation LL.M. from NYU Law School and his J.D. from the University of Minnesota Law School. He served his country in the Navy JAGC during Desert Storm. Easy to talk to, feel free to call Peter for an appointment. We will make the process as easy as possible!
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