Brenda K. Uekert, PhD
Over the last several years, I have watched the media highlight stories of financial exploitation by a guardian or conservator, all occurring under the watch of a probate court. While in some cases, the issue was one of outright theft, the vast majority of complaints appear to be around the issue of excessive fees that quickly diminish the estate of the protected person. Media attention has led to significant conservatorship reforms in several states (see our State Task Force Activities section).
- In Nebraska, the Supreme Court launched a review committee to make recommendations on guardianship and conservatorship reform. The committee was created following a 2010 series of articles in the Omaha World Herald documenting multiple cases of theft by a court-appointed guardian-conservator.
- In Arizona, the Supreme Court’s Committee on Improving Judicial Oversight and Processing of Probate Matters released a Final Report advocating major reform of their guardianship system. The Committee was created in 2011, following a series of Arizona Republic stories detailing the stories of several people who lost much of their estates to attorneys and fiduciaries appointed to protect them.
This week, the San Jose Mercury News ran a three-part series focusing on “excessive” conservator fees in the Santa Clara County Probate Court. The media posting includes a video (Loss of Trust) highlighting the case of Denny Reed, a 37-year old man who lost the majority of his estate after being placed under a court-appointed trustee. By the court’s own admission, it does not have fee guidelines that could be used to rein in the fees charged by conservators and trustees. To the court’s credit, it is working diligently to develop guidelines and processes to protect the estates of protected persons. In my experience, the lack of fee guidelines in probate courts is not unique to Santa Clara. In fact, I hazard to guess that the vast majority of courts that oversee guardianships and conservatorships do not have established fee guidelines or fee caps. No court wants to be in Santa Clara’s shoes—yet it is a real possibility for many.
Rather than dwell on the underlying issues that have hampered conservatorship monitoring and the establishment of appropriate fees and services, this is an opportunity to present some of the more typical ways in which courts set fee structures (see our section on Fees and Services for a more thorough discussion.) Generally, courts tend to rely on several approaches when setting fee guidelines:
- Courts have set hourly rates for guardians/conservators—often relying on a fee workgroup and local surveys as the basis for pay scales. For instance, Florida’s 13th Judicial Circuit has a Guardian Fee Workgroup that used a statewide fee survey to establish pay scales, based on level of experience.
- In combination with fee rates, service caps have been put in place to ensure that excessive hours are not billed for routine tasks. For example, the Florida court cited above limits billable guardian duties to two hours of bill paying per month. Texas’s Travis County Probate Court took a similar approach in its Standards for Court Approval of Attorney Fee Applications. The Standards outline court-approved fees and provides guidelines for specific types of charges, including travel, legal research, preparation of fee applications, conversations with court and clerk staff, copies and faxes, and deliveries.
- Some courts allow fees to be based on the percentage of assets or income. For example, the Superior Court of California, County of San Francisco, Uniform Local Rules of Court (Rule 14) allows fees to be based on hourly rates with supporting time record, or fees may be requested based upon a guideline of 1% of the fair market value of assets at the end of the accounting period or 6% of income, in the Court’s discretion.
While fee guidelines may not be popular, they provide guidance for the court and for those who are assigned responsibility over another person’s estate. They are essential. In the future, there is likely to be added pressure to move from local fee guidelines to state guidelines—a concept that will soon be introduced in Arizona. Already in California, there is a growing movement for statewide caps on conservator fees.
Beyond the need for fee guidelines and caps, the probate world may soon hear more about the concepts of “Cost Monitoring and Control.” Arizona’s new legislation moves increasingly toward an approach that strives toward the sustainability of the estate. Judge Mroz’s presentation of Arizona’s experience at this spring’s National College of Probate Judges is an excellent starting point on which courts and states can make improvements in their oversight of guardianships and conservatorships.