Pennsylvania Guardianship Fees
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 to incapacitated persons. Incapacity is a broad label, usually including any person who can no longer care for themselves or manage their own 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 10 years.
Watching that trend leads to a question we receive often: what is the appropriate compensation for a guardian?
To date, Pennsylvania has not adopted a statutory scheme to determine guardianship fees. Guardians undertake a wide variety of tasks, for which they deserve adequate compensation. One way that guardianship fees can be addressed is within 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 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” looks like in specific cases as new opinions are published in our Blog.
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