Do Legal Guardians Receive Compensation? Regulation and Obligations

Responsibilities of a Legal Guardian

The combination of responsibilities may vary significantly based on the needs of the individual or persons for whom they are responsible. However, the overall idea is that parenting in its most basic form has been transferred to an adult who has been appointed by the courts to take over as the sole decision maker.
The guardian will generally be responsible for all of the following:
The legal guardian must have a firm understanding of the physical and emotional needs of children , whether they are infants or older individuals who have developed mental and physical problems into adulthood. Anyone who has questions about how an individual becomes a legal guardian in Connecticut, the legal requirements imposed upon them or whether compensation is commonplace for guardians should not hesitate to consult a knowledgeable Connecticut guardianship attorney.

Are Legal Guardians Compensated?

Regardless of the capacity in which she or he serves, the legal guardian can be compensated by the ward’s estate. Once authorized to do so under a court order, the legal guardian may reasonably delegate certain responsibilities relating to the care, custody, and control of the ward’s person or property, and must exercise "reasonable skill and caution" in doing so.
In Delaware, for example, a "guardian of the person" is not compensated, absent an otherwise specifically written agreement between the guardian and the ward, or by court order. By contrast, Chesapeake City in Maryland explicitly requires that a guardian of the property be compensated as a fiduciary of the ward’s property. Moreover, it specifically includes a codicil to a will that is to be considered when the will is probated to ensure that the guardian receives reasonable compensation.
Compensation may be in the form of a commission, or the actual costs incurred by the guardian in discharging his or her duties, including payment for reasonable expenses, provided that the court approves such expense payments.
However, some bills for services rendered as guardian may be considered "ineligible expenditure" and will not be reimbursed by Medicaid. Such expenses are incurred by the guardian but are not covered by Medicaid and include (as examples only), boarding homes, out of home placements, fees paid to guardians, case managers, and any other payments for personal time required to care for the individual.
Because a court will always review bills for guardian services, it is important to ensure that the amount of time spent on the case is reasonable in accordance with the services rendered. For example, if a guardian only sees a ward once or twice a year, and the time spent with the ward is minimal, and the time spent by phone is also minimal, the time billed should be commensurate.

What Influences the Payment of a Guardian

Various factors affect how much guardians can be paid to administer the estate of their ward. The laws of the state in which the guardianship is established is one factor, and the ward’s financial condition is another.
Compensation for personal representatives and trustees is often determined according to the provisions of the will or the trust document governing the estate, as authority is given to the trustees by the will or trust that has been created. Additional compensation can be paid for extraordinary services in settling an estate and/or trust.
In the case of guardianships, amounts paid to caregivers must be approved through the courts. Some states set a statutory compensation schedule for guardians, which is often based on the value of the ward’s estate or property. For example, Illinois statutory law allows guardians of the estate to receive 75 percent of the compensation provided under the statutory rules governing personal representatives/will executors, or $2,000 per year, whichever is less ( 755 ILCS 5/16-3). Guardians of the person (i.e., caregivers) are entitled to receive the lesser of 75 percent of the statutory compensation or $500 per year ( 755 ILCS 5/16-3).
When the financial resources of a ward are minimal, sufficient assets to pay guardian fees might not be available. In such cases, the judges hearing these cases in Cook County have instructed private guardians not to charge fees in such circumstances.
Although section 755ILCS 5/16-2 provides for servitude of the personal representative of an estate without charge, the judge also has the power to allow or disallow payment to the guardian for his or her services, depending on the facts of the particular case. As with guardianship issues in general, resolving such cases usually requires a hearing and testimony.
If the assets of an estate or trust are insufficient to cover guardian compensation, then in a contested case, the judge might consider the totality of the circumstances, including the parties’ assets, incomes, needs and expenses, as well as the services rendered, before reaching a decision.

Receiving Compensation as a Guardian

Currently, the Commonwealth of Pennsylvania permits the guardian of the estate and the guardian of the person to request compensation as provided in the Will or Trust of the estate of the incapacitated person. In order to receive such compensation, the guardian must file a petition with the master and/or the court requesting approval of the compensation. The compensation of the guardian is determined in tandem with approval of the accountings of the guardian of the estate. Guardians are also required to obtain approval of their compensation at the conclusion of the guardianship by filing an Official Visit Report. The current guidelines for compensation are as follows:
Guardian of Estate – 4% of the annual value of the estate; 2% at distribution.
Guardian of Person – $100 per month , plus reasonable expenses.
In Arnold v. Arnold, the Superior Court revised the prior formula for compensation of the guardian of an incapacitated person by ruling that the former guidelines were too low. The Arnold decision calls for the Supreme Court of Pennsylvania to update the guidelines. According to Arnold, guardians of the person are entitled to 5 percent of the previous year’s income of the incapacitated person, plus 5 percent of the value of the previous year’s assets left as of the last day of the previous year. According to the Arnold court, guardians of the estate are no longer limited to 4 percent.
Guardians of the person may also request additional compensation for services rendered beyond the norm.

Legal and Ethical Considerations

While guardians of the person do not get paid for caring for their loved one, Michigan law allows for guardians of estate to be compensated reasonably. In fact, should a guardian be required to account to the court, as described above, the court can approve or disapprove the compensation. Furthermore, should the accounting determine that some or all the disposition occurred without approval, a judge may order reimbursement back to the estate. Conflicts of interest can arise when the guardian compensates himself from the estate (as a trustee) for services performed as guardian for the same individual (which could render the guardian personally liable) and any agreement to do so should be approved by the court. Furthermore, if the guardian intends to ‘double dip,’ i.e. simultaneously serve as a trustee and receive a salary from the estate for being the guardian, the guardian shall clearly disclose the intention in writing to the court at the time that both responsibilities begin. However, the agreement will not be enforceable until approved by the court and the guardian shows with clear and convincing testimony that the dual duties are in the best interest of the estate and not self-serving.

Guidance on Guardians Seeking Payment

There are a number of resources available to legal guardians to assist in understanding and acquiring compensation for their work. The following is a non-exhaustive list of such resources: Local Bar Associations: Many times local bar associations (or probate lawyers in larger law firms) provide free or reduced-cost legal aid services to help legal guardians navigate the compensation issue . State Guardianship Programs: Many states offer support programs to guardians which assist in understanding the role of the guardian and the right to compensation. Online Community Forums: Many times community or personal websites relating to probate law and guardianship have forums where legal guardians can connect with each other, as well as attorneys who practice in the field, to provide insight on compensation issues that the volunteers may be facing.