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The Duty of a New York Guardian to File an Account with the Court

shutterstock_1465659569-300x201Article 81 of the Mental Hygiene Law provides the procedures and requirements regarding guardianship of an incapacitated person.  The statute allows for the appointment of a guardian for property management and for personal needs.  Whether or not a person requires a guardian is determined by the Court after a hearing.  One of central inquiries when determining incapacity is the extent to which the alleged incapacitated person can perform activities of daily living such as caring for personal hygiene, banking and financial affairs and other ordinary and regular daily living functions.  The New York Probate Lawyer Blog has published numerous articles about guardianship and the Court proceedings for appointment.

A guardian, like all fiduciaries, has duties and responsibilities.  If any of these obligations are breached, the guardian may be held personally responsible.  The guardian can also be discharged.  There is a duty to provide the Court with a full annual accounting of guardianship activities.  MHL Section 81.31 entitled “Annual report” states that the guardian must file a report with the Court every May.  The statute delineates the information that must be included in the report.  The Court, through a Court Examiner, reviews each accounting and either approves it or asks the guardian for additional information.  The Court Examiner may seek Court intervention if the guardian is not acting or reporting properly.  The Court’s primary goal is to insure that the interests of the incapacitated person are protected.  The Court Examiner typically will review all of the guardian’s information including bank statements and financial records to make certain that the information in the report is accurate and authentic.

The guardian’s duty to account and the Court Examiner’s review were recently discussed in a Queens guardianship case entitled Matter of Soifer.  This case was decided by Queens Supreme Court Justice Bernice Siegel on October 29, 2020.  In Soifer, the incapacitated person’s cousin had been acting as guardian.  The Court Examiner raised a concern with the Court because the cousin was also a trustee of a trust that was created for the incapacitated person’s benefit under her mother’s Last Will.  The cousin was a remainder beneficiary of the trust.  The Court Examiner felt that the cousin’s role as Court appointed guardian and trustee / beneficiary under the Will created a conflict of interest.

After reviewing the facts, the Guardianship Court determined that there was no conflict of interest as long as the guardian / trustee was not committing any wrongdoing or was not otherwise unfit to serve.

However, the Court did direct that the guardian include the activities of the trust as part of the information provided in the guardian’s annual report.  Even though the trust existed outside of the guardianship, the Court felt that such accounting was necessary to protect the interests of the person who was incapacitated.

Guardianship cases and accounting proceedings in guardianship and estate cases in Surrogate’s Court can be complicated.  The assistance of experienced attorneys and fiduciary accountants can be essential to success.  Call Me Now for a free confidential review of your issue.  We provide reasonable and flexible fee arrangements and personal representation.

New York Guardianship and Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 40 years resolve issues relating to guardianship and probate and estate settlement throughout New York City including the Bronx, Queens, Brooklyn, Manhattan, Nassau and Suffolk County.  If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial free consultation.

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