New York Guardianship law, as set forth in Article 81 of the Mental Hygiene Law, contains many provisions delineating such matters as procedural requirements and Guardianship powers. Among these many items is an important section concerning Compensation of Guardian. Section 81.28 of the Mental Hygiene Law provides, in part, that "The Court shall establish, and may from time to time modify, a plan for the reasonable compensation of the guardian or guardians." Such compensation is usually paid from the Incapacitated Person's assets.
While the statutory language leaves the compensation issue open to determination in each Guardianship case, the Courts typically refer to the statutory commission provisions for Trustees, Executors and Administrators contained in the New York Surrogate's Court Procedure Act for a basic standard in calculating and awarding Guardian's compensation. For example, Section 2307 of the Surrogate's Court Procedure Act provides the following basic schedule for the award of Executor's and Administrator's Commissions:
(a) For receiving and paying out all sums of money not exceeding $100,000 at the rate of 5 percent.
(b) For receiving and paying out any additional sums not exceeding $200,000 at the rate of 4 percent.
(c) For receiving and paying out any additional sums not exceeding $700,000 at the rate of 3 percent.
(d) For receiving and paying out any additional sums not exceeding $4,000,000 at the rate of 2 ½ percent.
(e) For receiving and paying out all sums above $5,000,000 at the rate of 2 percent.
Section 81.28 allows the Court in its discretion to modify a Guardian's compensation despite the generally accepted parameters and, in appropriate cases, to deny the Guardian payment of fees, particularly where the Court finds that the Guardian did not satisfactorily perform his or her fiduciary duties. Such was the case in In Re Conners, 881 NYS2nd 613 (Supreme Court Kings County 2009), where Judge Betsy Barros, denied compensation to the attorney/Guardian, stating in part:
In this matter, the guardian failed to preserve his
ward's assets, failed to preserve her trust, failed to
file an initial report, filed his bond some five months
after the order and judgment was entered, and failed to
obtain his commission. When the windfall of executor
failure to preserve his ward's trust, is coupled with the
trustee commissions already obtained, this Court finds
that yet a third commission to Mr. Connors would be an
unjustified reward for his services as guardian.
As pointed out by the Court, a Guardian owes an individual duty of loyalty to the Incapacitated Person and should not be compensated if this fiduciary duty is breached.
Interestingly, the issue of Guardianship compensation may arise when a Guardianship petition is dismissed after an appeal following the appointment of a Guardian. In such situations, the Court must determine which party is responsible to pay the Guardian for the services rendered prior to the dismissal. If the Court finds that the Guardianship petition was not brought in good faith, it may require the petitioner to pay the Guardian's compensation. For example, in Matter of Isadora, 773 NYS2d 96 (AD2d 2004), the Appellate Division determined that the lower Court should not have revoked a power of attorney and health care proxy and appointed a Guardian. In reversing the Judgment, the Court directed that the Guardian's compensation be paid by the petitioner.
New York Guardianship Attorney Jules Martin Haas, Esq. has been representing clients in New York Guardianship Proceedings, Trusts and Estates matters and Surrogate's Court proceedings throughout the past 30 years. If you or someone you know is involved with or has questions about a New York Guardianship or estate, please contact me at (212) 355-2575 or email: firstname.lastname@example.org, for an initial consultation.