I. Introduction

One of the responsibilities of a Guardian¹ of the person and/or property of an incapacitated person (hereinafter "Guardian") appointed pursuant to Article 81 of the Mental Hygiene Law (hereinafter "Article 81") is to periodically report to the Court.² While preparing the required reports can often be a time-consuming task, accurate and detailed recording keeping during the reporting period, combined with an understanding of the reporting requirements of Article 81, can greatly reduce the time spent and increase the quality of the report produced.

II. An Overview

Initially, the Guardian is required to report no more than 90 days after having received a commission.³ Assuming that the Guardian is both a Guardian of the person and a Guardian of the property⁴, this initial report offers, among other things, an inventory of the assets under the control of the Guardian5 the Guardian's plan for restructuring these assets⁶ , a report of the Guardian's personal visits with the incapacitated person⁷, the steps taken by the Guardian to provide for the personal needs of the incapacitated person8, and the Guardian's plan for the personal needs of the incapacitated person.⁹

In addition to the initial report, the Guardian is required to file with the Court an annual report¹⁰ detailing, in addition to much of the information required by the initial report, any major changes in the condition of the incapacitated person¹¹, the medical treatment received by the incapacitated person during the reporting period ¹² , the sufficiency of the incapacitated person's residential setting ¹³ , and the changes to the assets of the incapacitated person which are under the control of the Guardian. ¹⁴ In most cases, the annual report will report for the calendar year ¹⁵ and must be filed in the month of May. ¹⁶

In Westchester County, if a Guardian is appointed after October 1st, that Guardian is not required to file an annual report for the calendar year in which the Guardian is appointed. However, the Guardian's initial report should contain, in addition to the requirements for an initial report set forth above, an accounting for the changes to the assets of the incapacitated person which are under the control of the Guardian in the same manner as required in the annual report. This report should be filed in accordance with the time period for filing the initial report.

In appropriate circumstances, the Guardian may obtain permission from the Court, which appointed the Guardian to render an intermediate report or a final report. ¹⁷ Such a report is generally necessitated if the Guardian "dies or is removed, suspended, discharged pursuant to the provisions of [Article 82], or allowed to resign" ¹⁸ or if the incapacitated person dies or the Guardianship is otherwise terminated. If the Court grants permission for the filing of such a report, the report should contain the information required to be contained in the annual report. ¹⁹

III. Record-keeping by the Guardian

The key to preparing not only sufficient, but also clear and accurate reports is good record-keeping. Upon the issuance of the commission, the Guardian should begin to prepare for reporting; either initially or annually, by setting up a system to clearly and accurately assemble the details necessary to satisfy the reporting requirements of Article 81. The system should clearly and accurately assemble not only financial information, but also personal and medical information pertaining to the incapacitated person.

First, each Guardian must designate a place to record relevant Guardianship information and keep relevant Guardianship papers, separate from the personal records of the Guardian. Next, the Guardian must chose a system which he or she is comfortable with whether it be setting up notebooks, file folders, computer files supplemented with a method of filing documents, or a file box with divided sections. The method by which the information is kept is not as important as the fact that it is being kept in a timely and organized manner.

The continuing task to determine what type of information needs to be recorded. As a general rule, the Guardian should record any and all acts done on behalf or in connection with the incapacitated person. ²⁰ These acts can range from the receipt of a phone call from a neighbor to the investment of $1 million. Both, need to be recorded with sufficient detail to allow them to be adequately reported.

Record keeping with sufficient detail and organization is crucial if the Guardian expects to be able to prepare the financial portion of any report with ease and clarity. In order to better appreciate the necessity for keeping various types of records, record-keeping suggestions will be made throughout this article when a reporting requirement for which back-up documentation is required is discussed.

IV. The Initial Report

As was previously indicated, the initial report must be filed with the Court within ninety days of the Guardian having received a commission ²¹ and must discuss the steps which the Guardian has taken to comply with the order of appointment. ²² Specifically, the report must contain:

1. Background information ²³ : The report should indicate the name and current address of the Guardian. It should indicate the date and Court of appointment and should have a copy of the Order of appointment attached. It should identify the amount of the bond, the surety company, and the date that the bond was filed.

2. Proof that the Guardian has completed an adequate training program ²⁴ : An incapacitated person is entitled to have a Guardian appointed who is "sufficiently capable of performing the duties and exercising the powers of a guardian necessary to protect the incapacitated person." ²⁵ As such, most Guardians ²⁶ are required to complete a training program and attach proof of such completion to their initial report. ²⁷

3. An inventory of the assets of the incapacitated person under the control of the Guardian: ²⁸ This list should be prepared and verified in the same manners as the Guardian prepares the annual report's schedule of assets on hand at the beginning of the reporting period, the preparation of which is discussed later in this article.

4. The Guardian's plan for the management of the incapacitated person's assets: The plan offered should be specific, detailed and should not encompass actions that are not within the powers of the Guardian unless additional powers are being sought to perform such actions. Each and every asset should be discussed with specificity. ²⁹

5. The location of any will of the incapacitated person ³⁰ and a copy of any living will, health care proxy, or do not resuscitate order of the incapacitated person: ³¹ If the Guardian cannot locate an original or copy of a will, living will, health care proxy, or do not resuscitate order among the belongings of the incapacitated person, and the incapacitated person is not able to indicate whether he or she has executed one, or the possible whereabouts of such a document, the Guardian should take appropriate additional steps to try and locate such documents. The Guardian could contact the family attorney and inquire as to the existence of any of these documents. In addition, the Guardian could contact the family doctor or clergyman to inquire whether he or she has a copy of a living will, health care proxy or do not resuscitate order. Relatives or neighbors may also be able to help in locating these documents and should be contacted in appropriate circumstances. If the will, living will, health care proxy, or do not resuscitate order is not found, the report should indicate this fact and highlight the steps the Guardian has taken in an attempt to locate the document.

6. A report of the Guardian's visits with the incapacitated person: ³² The initial report should offer all of the basic details surrounding any visit the Guardian may have had with the incapacitated person including the date, time, length and place of the meeting. In addition, the report should offer a basic discussion of who was present during the visit, and any information which may have been elicited or task that may have been accomplished during the visit. The detail required may of course depend upon the level at which the incapacitated person is able to interact with the Guardian.

7. The steps the Guardian has taken to attend to the personal needs of the incapacitated person: ³³ The Guardian should refer to the records kept of the actions taken on behalf of the incapacitated person to be able to accurately and completely comply with this requirement. Of course, certain actions which can appropriately be categorized and summarized should be. 34 If the Guardian has kept adequate records of the actions taken, this reporting requirement should be quite easily complied with.

8. The plan of the Guardian to attend to the needs of the incapacitated person: ³⁵ This plan must address the medical ³⁶ , social and personal services ³⁷ which will be provided to the incapacitated person, indicate any examinations which may be necessary to determine the treatment needs of the incapacitated person ³⁸ , and indicate the existence of or application for any insurance or benefit which will help to defray the cost of any such services. ³⁹ Just as with the Guardian's plan for the management of the incapacitated person's assets, the plan offered should be specific, detailed, and should not encompass actions that are not within the powers of the Guardian unless additional powers are being sought to perform such actions. The Guardian should rely, where appropriate, on the recommendations of professionals who have been consulted on behalf of the incapacitated person. However, if the Guardian is relying on a particular recommendation, this fact should be clearly indicated in the plan being offered.

9. Any need for a change in powers of the Guardian with respect to either the person or the property of the incapacitated person: ⁴⁰ If the Guardian requests additional powers, the Guardian should set forth in the initial report the reasons that such powers appear to be necessary and then should follow up on this request pursuant to the requirements of Mental Hygiene Law. ⁴¹

10. If required, proof of filing of a Statement regarding Real Property of the Incapacitated Person: ⁴² If the Guardian is charged with the management of the real property of the incapacitated person, the Guardian must file a statement in the county in which the real property is located, indicating, among other things, the existence of a Guardian. ⁴³

V.Annual Report

As was previously indicated, the annual report must be filed with the Court during the month of May ⁴⁴ and must include the following:

1. Background information: The Guardian's address and telephone number ⁴⁵ , and the incapacitated person's address and telephone number ⁴⁶ should be included. However, if the incapacitated person does not reside in a personal residence, the Guardian must include "the name, address, and telephone number of the facility or place at which the person resides and the name of the Chief Executive Officer of the Facility or person otherwise responsible for the person's care". ⁴⁷

2. Medical Information: The following medical information must be included in the annual report:

a. "[A] ny major changes in the physical or mental condition of the incapacitated person" ⁴⁸ : The Guardian will be attaching a medical professional's statement ⁴⁹ to the annual report, so the Guardian does not have to provide a detailed medical assessment of the incapacitated person's condition, but instead a layman's assessment based up on the Guardian's personal interaction with the incapacitated person. ⁵⁰

b. "[A] ny substantial change in medication" ⁵¹ : While the Guardian should has been made aware of and consented to any recommended change in medication, the Guardian is not expected to report the precise names and doses of medications if the medical professional rendering a statement is willing to include this information in the statement. ⁵²

c. "[T] he date that the incapacitated person was last examined or otherwise seen by a physician and the purpose of that visit" ⁵³ : If the Guardian does not take the incapacitated person to physician's appointments, the Guardian must obtain this information from the physician. Even if the in capacitated person is in a nursing facility, the Guardian should check with the facility's Administrator to determine when, by whom, and for what purpose the incapacitated person was last seen by a physician.

d. "[A] resume of any professional medical treatment given to the [incapacitated person]" during the reporting period ⁵⁴ : As with the prior requirement, if the Guardian has not kept track of this information throughout the reporting period, it must be obtained from the appropriate source and included in the report.

e. "[T] he plan for medical, dental and mental health treatment, and related services in the coming year" ⁵⁵ : This plan should be prepared in the same fashion as the plan offered by the Guardian in the initial report, the preparation of which is discussed previously in this article.

f. A medical professional's statement offering "an evaluation of the incapacitated person's condition and the current functional level of the incapacitated person" ⁵⁶ : This statement should be prepared by the incapacitated person's physician, psychologist, nurse clinician, or social worker ⁵⁷ assuming that one of these persons has seen the incapacitated person within three months of filing the report. If the Guardian is unsure of any substantial change in the medications the incapacitated person is taking, this should be addressed in the report. The Guardian should determine which of the permissible medical professionals could most adequately assess the incapacitated person's current functional level and when asking that person to prepare a statement should quote the exact requirements of Mental Hygiene Law §81.30(b)(5) so that the Guardian gets what is needed to satisfy the reporting requirements of Article 81.

3. Social Information: The Guardian should set forth "a statement of whether the current residential setting is best suited to the current needs of the incapacitated person ⁵⁸ . In addition, the report should indicate the social skills, needs and services utilized by the incapacitated person. ⁵⁹

4. Financial Information: The Guardian, if the Guardian is charged with property management, must report on this management. Article 81 does not set forth its own guidelines for reporting this information, but instead directs the Guardian to the guidelines for an accounting by the Guardian of an infant's property required by the Surrogate's Court. ⁶⁰ While these guidelines do not set forth a specific form for reporting the financial information, ⁶¹ they do specify the precise information, which must appear in the annual report, and it is imperative that the Guardian includes such information. In addition, it provides that the Guardian may have to provide evidence of items contained in the accounting. ⁶² To satisfy the reporting requirements with respect to financial information, the Guardian must include the following:

a. Surety Information: While Section 1719 of the Surrogate Court Procedure Act calls for inclusion of information, which is primarily of an accounting nature, it also calls for inclusion of the name of the surety of the Guardian and an indication that the surety is in good standing. ⁶³

b. Schedule of Assets on Hand at the Beginning of the Reporting Period: The Guardian is required to set forth "a true statement and description of each item of personal property…received by him since his appointment or since the filing of his last account." ⁶⁴ This requirement is generally satisfied by the preparation of a schedule of assets on hand, which lists assets under the control of the Guardian at the beginning of the reporting period, whether that period be the initial reporting period or the annual reporting period.

Upon the issuance of a commission, the Guardian should begin marshalling assets and simultaneously begin preparing a list with sufficient detail to accurately report the identity and extent of the incapacitated person's assets, as the Guardian will be called upon to present a list of assets in the initial report. ⁶⁵

First, the Guardian must locate enough information about the incapacitated person's assets to be able to marshal them. Sometimes the recently appointed Guardian had been handling the finances of the incapacitated person prior to the initiation of the Article 81 proceeding and, therefore, has a good sense of the location and extent of the incapacitated person's assets. However, some Guardians have had no prior relationship to the incapacitated person and must, upon receipt of commission, begin assembling a list of assets with very limited knowledge about the assets of the incapacitated person. In either case, the Guardian's first points of reference should be the petition and the court evaluator's report in the Article 81 proceeding as both should detail the location and extent of the incapacitated person's assets. However, the Guardian should not rely solely on those lists and should inquire at all financial institutions at which the incapacitated person did business ⁶⁶ , review all available bank and brokerage account statements to determine the source of money, if any, deposited into these accounts, look at the incapacitated person's tax returns and 1099s for prior years to identify assets, and in addition, contact the Abandoned Property Division to inquire as to whether there are any accounts of the incapacitated person which have escheated to the State Comptroller. Items of personal property of mentionable value should be located, inventoried, and included in the list of assets. ⁶⁷ Note, however, that real property is not appropriately included in the list of assets, or the schedule of assets on hand.

Once the assets have been located and marshaled ⁶⁸ by the Guardian, they must be valued. ⁶⁹ Assets of different natures are valued differently. Generally, bank accounts should be listed at their value as of the date of the issuance of the commission to the Guardian. However, it is often more appropriate, and usually acceptable, to value a bank account as of the date of acquisition of control of the account by the Guardian. ⁷⁰ Securities, stocks and bonds, should be listed at inventory value, the value on the date the guardian was appointed. ⁷¹ For personal property, if a fairly recent appraisal can be located, the value from such appraisal can be used, but the entry should identify the fact that the value is based up on an appraisal of a certain date. If a recent appraisal cannot be located, the Guardian should obtain an appraisal and list the asset at the appraised value.

A ledger sheet ⁷² should be kept by the Guardian for each asset under the Guardian's control. This sheet should contain not only the name and current value of the asset, but also the identifying information necessary to prepare adequately a schedule of assets on hand entry. Each entry on the schedule of assets on hand should contain the name of the financial institution, or issuer and CUSIP number of the security or bond, the quantity of the holding, if relevant, an indication of what type of holding the asset is (checking account, coupon bond, common stock etc.), an indication of the caption of the account if other than sole ownership by the incapacitated person (for instance joint, or in trust for), and the inventory value at the beginning of the reporting period. While the inventory value at the beginning of the reporting period. While the entries may be listed under subheadings such as cash, stocks, bonds, personal property or miscellaneous, each asset must be independently described and listed.

The list of assets in the initial report will serve as the schedule of assets on hand in the first annual report and likely as the schedule of assets on hand in the final report, unless an intermediate report has been permitted and approved. From year to year, the schedule of assets on hand will consist of the schedule of assets remaining in the hands of the Guardian from the prior year's report.

c. Schedule of Realized ⁷³ Increases in Assets: The Guardian is also required to set forth "a statement of the manner in which he has disposed of each item not remaining in his hands." ⁷⁴ This requirement can be satisfied by the preparation of a schedule of realized increases in assets and a schedule of realized decreases in assets, the former of which will be discussed in this section. ⁷⁵ The schedule of realized increases in assets should accurately and chronologically detail the gain on the sale, liquidation, or distribution of assets, most commonly stocks, bonds ⁷⁶ , or realty. ⁷⁷ The entry on this schedule should identify the asset with the detail required in the schedule of assets on hand. The entry should also include the date of realization of the gain (the date of sale, liquidation or distribution) and the quantity, if relevant, which has been sold, liquidated or distributed. The gain calculation should be shown by listing the proceeds received ⁷⁸ less the inventory value of the asset sold, liquidated or distributed resulting in the gain.

Any distribution of assets, which would likely have to be approved by Court order, also results in the declaration of a gain or loss. If an asset is distributed, it must be valued as of the date of the distribution. The gain calculation would be shown by listing the value on the date of distribution less the inventory value of the asset distributed resulting in the gain.

The amount of time necessary to prepare this schedule accurately can be greatly reduced by performing accurate, detailed bookkeeping during the reporting period. For instance, if the Guardian holds even a modest portfolio of securities, the Guardian must keep careful track of all transactions surrounding these securities, especially spin-offs or takeovers ⁷⁹ which may result in the liquidation of fractional shares without the Guardian's approval or involvement. These liquidations must be accurately accounted for. Therefore, it is important to record accurately, and file for reference, any information received relating to the sale, liquidation, or distribution of the incapacitated person's assets.

d. Schedule of Realized Decreases to Assets: This schedule should accurately and chronologically detail the sale, liquidation, distribution, or abandonment ⁸⁰ of assets, which results in a loss or in no gain or loss. ⁸¹ The entry should contain the same information as a schedule of realized increases entry. However, the calculation of loss, or of no gain or loss, should be shown by listing the inventory value of the asset sold, liquidated, distributed, or abandoned, less the proceeds, if any, received.

e. Schedule of Income Received: The Guardian is required to set forth " a true account…of all his receipts…of money during the preceding year." ⁸² This is done on a schedule of income received, which should accurately detail each receipt of income ⁸³ , in whatever form, by the Guardian. Most commonly this schedule will be used to detail receipts such as social security income, pension income, interest income, and dividend income, but may also include rental income, business income, or trust income.

While accepted formats for this schedule vary, I would suggest listing income received not entirely chronologically, but instead chronologically with in a sub-heading for each payor. A total amount of income received from a particular payor during the year is insufficient, as the Guardian is required to detail each receipt. ⁸⁴ Each entry should include the date of receipt of the income ⁸⁵ and the amount received. In addition, if the particular period for which the income was received is not obvious, it should be identified in the entry. ⁸⁶ Finally, identify irregular receipts so that any questions someone reviewing the report may have are easily and adequately answered. ⁸⁷ Note that the report will be reviewed by the court examiner to determine, not only whether each receipt listed was actually received, but also to determine whether the Guardian made sure that the incapacitated person received all receipts to which he or she was entitled during the year. ⁸⁸

Accurate and detailed record keeping during the reporting period should result in the Guardian being able to prepare this schedule with ease and clarity. Each receipt, prior to deposit, should be recorded on a manual or computer ledger. In addition, it is good practice to keep backup information to rely upon in the event that the Guardian realizes at reporting time that the ledger sheet entry does not adequately identify the receipt. ⁸⁹

f. Schedule of Paid Disbursements: The Guardian is required to set forth "a true account…of all his…disbursement of money during the preceding year." ⁹⁰ This is done on a schedule of paid disbursements, which should accurately detail the payment of disbursements, in whatsoever form, by the Guardian. This schedule may detail the payment of disbursements, in whatever form by the Guardian. This schedule may detail the payment of court costs, taxes, utility bills, rent, nursing home bills, or medical expenses, among other things, depending upon the situation and living arrangements of the particular incapacitated person.

Just as with the schedule of income received, accepted formats for this schedule may vary. However, I would suggest listing expenses not entirely chronologically, but chronologically within a sub-heading for each payee. The Guardian should not list only the total amount paid to each payee, but instead must detail each payment made to the payee by listing the date and the amount paid on that date. The entry on this schedule should identify the payee with the detail required to inform the court examiner of the reason for the payment. ⁹¹ As with the schedule of income received, take the time to include information in irregular entries so that the court examiner does not unnecessarily question the report. ⁹² In addition, if a payment is being made pursuant to a Court Order, it should be labeled as such with the date of the Order indicated and a copy of the Order attached. Finally, recall the court examiner will be reviewing this schedule to determine not only if disbursements were actually paid, but also whether or not disbursements were proper. ⁹³

Once again, accurate and detailed record keeping during the reporting period is the key to being able to prepare this schedule with ease and clarity. This schedule generally contains the information, which should be most readily available to the Guardian, as the Guardian should have taken an active role in issuing a disbursement, most frequently by writing a check. Ideally, the Guardian has kept a ledger identifying each disbursement. However, even if the Guardian has not adequately kept records, he or she should have at least kept the cancelled checks received back from the bank and could use them to begin assembling this schedule.

g. Schedule of Changes in Holdings/Explanation Schedule: The Guardian is required to set forth "a statement of the manner in which he has disposed of each item not remaining in his hands and a description of the amount and nature of each investment of money made by him. ⁹⁴ This is generally done on a schedule of changes in holdings or an explanation schedule. While Article 81, by reference to the Surrogate's Court Procedure Act, does require the Guardian to set forth information as to changes in holdings ⁹⁵ , the inclusion of this information in the report of the Guardian does not seem to be enforced consistently. ⁹⁶ Despite the fact that the inclusion of this schedule is not always enforced, I would recommend its inclusion as this schedule can be helpful in memorializing information that the Guardian may later need when disposing of an asset, and in offering the court evaluator a clear trial of the assets of the incapacitated person.

Acceptable formats again vary, but include an accounting type entry ⁹⁷ showing the date of the transaction, the amount/quantity of the asset purchased or disposed of, the type of transaction, and the dollar value of the transaction. Also generally acceptable is a narrative description of the transaction, which took place. ⁹⁸

While it may be duplicative to report the details surrounding disposal of a an asset as such details should be contained in the schedule of realized increases or the schedule of realized decreases, this is not the case with the acquisition of an asset. Therefore, I would suggest that, at a minimum, all acquisitions ⁹⁹ of assets be detailed on this schedule. In addition, this schedule can be used to show the path of assets. For instance, the Guardian may want to explain why a checking account at Bank A is listed on the initial schedule, but only a checking account at Bank B appears on the final schedule. A simple statement that Bank A was taken over, or the account was moved due to change in Bank A's fee schedule with an indication that the amount withdrawn from Bank A was deposited into Bank B can quickly put to rest any speculation on the part of the court examiner.

Once again the important role of record keeping must be stressed. Any change to a holding, whether it be disposal or acquisition of an asset, should be noted with sufficient detail on the ledger sheet for the asset so that preparation of this schedule should involve only a review of the ledger sheets. However, if the ledger sheets have not been kept with sufficient detail, the Guardian may have to fall back on, among the other things, sale confirmations or receipts, mailings as to stock splits, or statements received with reference to dividend reinvestment accounts to adequately complete this schedule.

h. Schedule of Assets on Hand at the End of the Reporting Period: The Guardian is required to set forth "a list of items remaining in his hands" ¹⁰⁰ at the end of the reporting period. This is done by the preparation of a schedule of assets on hand at the end of the reporting period. While the schedule of assets on hand at the beginning of the reporting period offers a snapshot of the incapacitated person's assets under the control of the Guardian at the beginning of the reporting period, this schedule offers a snapshot of the incapacitated person's assets under the control of the Guardian at the end of the reporting period. All assets appropriately listed in the former, should be listed in the latter at their inventory value. In addition, while not required by the schedule of assets on hand at the beginning of the reporting period, this schedule should offer a year-end market value for each asset so that the court examiner has the information necessary to aid in the determination as to whether or not the amount of the Guardian's bond needs to be increased or decreased. ¹⁰¹

Market value is more easily obtained for some assets than others. Of course, for cash accounts inventory value and market value are the same. If the Guardian holds securities through a brokerage firm, the brokerage firm will usually supply year-end market values for securities for which they are the custodian, and possibly even for securities for which they are not the custodian. Otherwise, the Guardian should obtain year-end market values by consulting the newspaper or contacting the transfer agent of the security. For items of personal property, the appraised value appearing in the initial report is probably sufficient unless the Guardian has reason to believe a particular item has significantly increased or decreased in value. Should this occur, the Guardian should have the item of personal property reappraised. However, it would be best for the Guardian to confirm the adequacy of a prior appraised value with the clerk of the court or the court examiner.

i. Schedule of Real Property: The annual report of the Guardian should include a schedule of real property which contains the location and identifying information for any piece of real property owned in whole, or in part, by the incapacitated person. If the real property is not owned in whole by the incapacitated person, the name, relationship, and nature of ownership (e.g. joint tenant, tenant in common) or any co-owner should be included. The Guardian should attempt to include information on the basis of the incapacitated person's interest in such property in the annual report. ¹⁰² In addition, the incapacitated person's interest in the real property should be appraised and the appraised value should be listed along with the date of the appraisal. If there is an outstanding mortgage on the property, the report should indicate this fact along with an amount remaining on the mortgage. If the property is generating rental income, the report should indicate this fact along with the amount of rental income being received.

j. Schedule of Commissions ¹⁰³ : The Guardian may be awarded ¹⁰⁴ compensation for the services rendered to the incapacitated person. While Article 81 suggest that this compensation is generally based upon the formula used to determine trustee's commissions ¹⁰⁵ , Article 81 has given the Court some flexibility in awarding compensation to the Guardian. ¹⁰⁶ Despite the fact that the Court does have the authority to award an amount to the Guardian that deviates from the amount that would be awarded to a trustee, the Guardian should complete a schedule of commissions which sets forth the calculation used to determine the commissions due a trustee of a trust of the same size as the incapacitated person's assets.

The commission due should be calculated pursuant to section 2309 of Surrogate's Court Procedure Act as follows:

Once the figure on which commissions are based is determined, the Guardian would be entitled to the following as commissions: $10.50 per thousand on the first $400,000.00, $4.50 per thousand on the next $600,000.00 $3.00 per thousand on any additional principal.

In addition, if the disbursements paid by the Guardian, excluding commissions paid to the Guardian, exceed income received, the Guardian is entitled to receive commission in the amount of one percent (1%) of the sum paid out in excess of income. ¹⁰⁹ The commission due should be calculated as follows:

Once the sum paid out in excess of income on which commissions are due is determined, this figure should be multiplied by one percent (1%) with the resulting figure being the additional commissions due the Guardian.

In preparing the schedule of commissions, the Guardian should not simply set forth the amount of commissions due, but instead must show the calculation used to determine that commission. Note that if the Guardian is submitting a report and asking for commissions for a period less than one year, the calculated commission must be apportioned. ¹¹⁰

k. Summary of Accounting: The Guardian is required to "charg[e] himself with any balance remaining in his hands when the last account was rendered and stat[e] the balance remaining in his hands at the conclusion of the year to be charged to him in the new year's account". ¹¹¹ This is generally done using the format of a Summary Schedule. The following format is suggested:

CHARGES:

5. Information as to services provided by the Incapacitated Person: In any case where the Guardian "has used or employed the services of the incapacitated person or where moneys have been earned by or received on behalf of such incapacitated person" ¹¹² , the Guardian is required to offer an accounting of "any moneys earned or derived from such services". ¹¹³

6. Any Other Information: Once the Guardian has provided the required background, medical, social and financial information, the court requires that the Guardian report upon anything else that the Guardian may have done which does not fit into one of the previously indicated categories ¹¹⁴ , including any information which the Court may have required the Guardian to report in the order of appointment. ¹¹⁵

7. An indication of the necessity for any alteration in the powers of the Guardian: If the Guardian determines that there is a need for additional powers, determines that a particular power is no longer needed, or determines that the Guardianship should be terminated, such a determination should be reported to the Court in the annual report. ¹¹⁶ If alteration of the Guardian's powers is sought in the report, the Guardian is required to proceed pursuant to the requirements of Mental Hygiene Law §81.31(e). ¹¹⁷

Vi. Filling

Once completed, a report must be filed properly. The report must be sent by regular mail to the incapacitated person if such person resides at home, must be sent by regular mail to both the incapacitated person and the executive of a facility if the incapacitated person resides in a facility ¹¹⁸ , and must be sent by regular mail to both the incapacitated person and Mental Hygiene Legal Service if the incapacitated person resides in a Mental Hygiene Legal Service facility. ¹¹⁹ In addition, the report must be filed with the clerk of the court, which appointed the Guardian ¹²⁰ , or if the incapacitated person is a resident of New York City, to the office of the clerk of the County where the incapacitated person last lived prior to the appointment of a Guardian. ¹²¹ Finally, while not required by the relevant statute ¹²² , the report should be sent to the office of the particular court examiner appointed in connection with the particular incapacitated person. ¹²³

VII.Examination of Initial and Annual Reports

Once an initial or annual report, is filed, it will be given to a court examiner, for review. ¹²⁴ The examiner may require examination of documents ¹²⁵ and the examination of the Guardian. ¹²⁶ Upon completion of the examination, the court examiner will file a report and proposed order incorporating the court examiner's findings with the Court, and send a copy of each to the Guardian. The proposed order will provide for the approval of the court examiner's report and the award of a fee to the court examiner for services rendered. The proposed order may also provide for the increase or the decrease of the amount of the Guardian's bond, if appropriate, and the award of any other fees or powers, which may have been requested, among other things.

While the statue calls for examination of Guardianship reports within thirty days of filing, ¹²⁷ in my experience, examination in fact has been completed anywhere from two months to two years from filing. The Guardian can increase the chances of the Guardian's report being reviewed in a timely manner by filing a clear report, which provides sufficient detail in a timely manner.

Note that the Court Examiner not only reviews reports submitted, but also monitors whether reports are received in a timely manner, or received at all. ¹²⁸ It is important to file both initial and annual reports in a timely manner as failure to report completely ¹²⁹ or file a report at all may result in a reduction of commissions awarded or, ultimately in removal.

VIII. Conclusion

Equipped with an appreciation of the reporting requirements of Article 81 and a system which will allow the Guardian to clearly and accurately record relevant information, a Guardian should be able to render a report which not only adequately, but also clearly and comprehensively meets the reporting requirements contained in Article 81 of the Mental Hygiene Law.

¹ On April 1, 1993, Article 81 of the Mental Hygiene Law, which provides for guardians on incapacitated persons, replaced Article 77 of the Mental Hygiene Law, which provided for conservators or conservatees, and Article 78 of the Mental Hygiene Law, which provided for committees of incompetent persons. L. 1192, c. 698, §3. While Article 81 governed all new and then pending proceedings, it did not convert the status of conservators and committees to guardians. However, the initial and annual reporting requirements of Articles 81 replaced the reporting requirements for conservators and committees, which had been contained in Article 77 and Article 78 effective May 1, 1994.
² Mental Hygiene L. §§ 81.30, 81.31, and 81.33.
³ Mental Hygiene L. §81.30(a).
⁴ The Court has the power to appoint a Guardian with powers tailored to fit the needs of the incapacitated person in order to "accomplish the least restrictive form of intervention". Mental Hygiene L. §81.16(c)(1),. Therefore, while the court may appoint one Guardian of the person and the property of the incapacitated person, the Court may choose instead to appoint One Guardian of the person and a separate Guardian of the property, e.g. Matter of Parsoff, N.Y.L.J. 6/695, p.35Col2 (Sup. Ct. Rockland 1995); or only a Guardian of either the person or the property, depending on the particular needs of the incapacitated person. However, for the purposes of this article, any reference to a "Guardian" assumes a Guardian of both the person and the property of an incapacitated person, as Westchester County generally requires one report, even if the duties of the Guardian are divided between two people.
⁵ Mental Hygiene L. §81.30(b).
⁶ Id.
⁷ Mental Hygiene L. §81.30(c).
⁸ Id.
⁹ Id.
¹⁰ Mental Hygiene L. §81.31.
¹¹ Mental Hygiene L. §81.31(b)(3).
¹² Mental Hygiene L. §81.31(b)(4), (5), and (6)(ii).
¹³ Mental Hygiene L. §81.31(b)(6)(i).
¹⁴ Mental Hygiene L. §81.31(b)(7).
¹⁵ While there had initially been some confusion following the enactment of Article 81 as to whether or not the reporting period was May 1 through April 30, or January 21 through December 31, this confusion no longer exists and it is clear that the annual report should cover the period from January 1, through December 31 of the relevant year.
¹⁶ Mental Hygiene L. §81.33(a).
¹⁷ Mental Hygiene L. §81.33(a).
¹⁸ Mental Hygiene L. §81.33(b).
¹⁹ Id.
²⁰ The Guardian is required to initially report "the guardian's personal visits with the incapacitated person, and the steps the guardian has taken…to provide for the personal needs of that person", Mental Hygiene L. §81.30(c) in addition to providing a detailed inventory of assets, Mental Hygiene L. §81.30(b). The annual report requires that the Guardian offer, among other things, "a resume of any professional medical treatment given to the ward in the preceding year". Mental Hygiene L. §81.21(l)(6)(ii), an accounting of all sums under the control of the Guardian, Mental Hygiene L. §81.31(b)(7) and "a resume of any other activated performed by the guardian on behalf of the incapacitated person" Mental Hygiene L.§81.31(b)(s).
²¹ Mental Hygiene L. §81.30(a).
²² Id.
²³ Mental Hygiene L. §81.30(a) provides that the initial report should be rendered "in a form prescribed by the court." While §81.20 does not specifically require the background information indicated in this paragraph, the Court will and thus information should be included.
²⁴ Mental Hygiene L. §81.30(a) requires that "[p] roof of completion of the guardian education requirements under section 81.39 of this article must be filed with the initial report." Mental Hygiene L. §81.39(b).
²⁵ Mental Hygiene L. §81.39(a).
²⁶ Pursuant to Mental Hygiene L. §81.39(c). "[t] he court may, in its discretion, waive some or all of the requirements…or impose additional requirements. In doing so, the court shall consider the experience and education of the guardian with respect to the training requirements of this section, the duties and powers assigned to the guardian, and the needs of the incapacitated person."
²⁷ Mental Hygiene L. §81.30(a).
²⁸ Mental Hygiene L. §81.30(b).
²⁹ For example, if the home of the incapacitated person is under the management and control of the Guardian, it should be discussed in the planning section. If the incapacitated person is no longer residing in the home and will not return to the home the Guardian may state, "123 First Street will be sold". While this statement maybe deemed sufficient in some circumstances, I would recommend providing a more detailed and comprehensive plan to the Court, especially in light of the fact that the Guardian will have to seek a court order approving the sale of the property. For example, "the real property located at 123 First Street is currently vacant. As Dr. Smith has indicated that the incapacitated person will never be able to return to the home under any set of circumstances, I plan to engage Broker A to market the property at a negotiated commission. Until sold, I intend to continue to pay all taxes, utilities and maintenance charges associated with the property." The latter statement better indicates how the Guardian plans to manage the real property of the incapacitated person and shows that the Guardian has begun to take specific steps to do so. For further discussion in regard to the sale of the real property of an incapacitated person, See Edward D. Loughman, Ill, "Court Approval of Sale of Realty Belonging to an Infant or Incapacitated Person: RPAPL Article 17", 24 Westchester Bar J. 25 (1998).
³⁰ Mental Hygiene L. §81.30(b).
³¹ Mental Hygiene L. §81.30(c).
³² Mental Hygiene L. §81.30(c).
³³ Id.
³⁴ For instance, the Guardian may want to sate that "on two occasions I took the incapacitated person shopping and purchased various necessary clothing items including housecoats and shoes for her" or "on three occasions I arranged for a cleaning woman to come to the residence of the incapacitated person and perform some general housekeeping for the incapacitated person.
³⁵ Mental Hygiene L. §81.30(c).
³⁶ Mental Hygiene L. §81.30(c)(1) provides that the plan must include "the medical, dental, mental health, or related services that are to be provide fro the welfare of the incapacitated person".
³⁷ Mental Hygiene L. §81.30(c)(2) provides that the plan must include "the social and personal services that are to be provided for the welfare of the incapacitated person.
³⁸ Mental Hygiene L. §81.30(c)(3) provides that the plan must include "any physical, dental, and mental health examinations necessary to determine the medical, dental, and mental health treatment needs": of the incapacitated person.
³⁹ Mental Hygiene L. §81.30(c)(4) provides that the plan should include information as to "the application of health and accident insurance and any other private or government benefits to which the incapacitated person may be entitled to meet any part of the costs of medical, dental, mental health, or related services provided to the incapacitated person". Note that the Guardian is required to research any insurance or benefits to which the incapacitated person is or maybe entitled to prior to the filing of the initial report. The Guardian may have to obtain and review any relevant retirement documents pertaining to the incapacitated person's entitlement to benefits, meet with any social workers who may be involved with the incapacitated person to see their guidance as to benefits to which the incapacitated person may be entitled, o0r contact appropriate government office directly to determine whether or not there are benefits such as Medicaid, Medicare, Supplemental Security Income, Social Security Disability Income, or Food Stamps that the incapacitated person is entitled to receive. Even if no additional insurance is obtained or benefits are located the efforts of the Guardian should be indicated in the initial report.
⁴⁰ Mental Hygiene L. §§81.30(b) & (c).
⁴¹ Mental Hygiene L. §81.30(d) provides that "[I] f the initial report sets forth any reasons for a change in the powers authorized by the court, the guardian shall make an application within ten days of the filing of the report on notice to the persons entitled to such notice in accordance with paragraph one of subdivision (d) of section 81.07 of this article for such relief. If the initial report sets forth any reasons for a change in the powers authorized by the court and the guardian fails to act under this subdivision, any person entitled to commence a proceeding under this article may petition the court for q change in such powers on notice to the guardian and the persons entitled to such notice in accordance with paragraph one of the subdivision (d) of section 81.07 of this article for such relief.
⁴² Mental Hygiene L. §81.20(a)(6)(vi).
⁴³ Mental Hygiene L. §81.20(a)(6)(vi) requires that the Guardian "file with the recording officer of the county wherein the incapacitated person is possessed of real property, an acknowledged statement to be recorded and indexed under the name of the incapacitated person identifying the real property possessed by the incapacitated person, and the tax map numbers of the property, and stating the date of adjudication of incapacity of the person regarding property management, and the name, address, and telephone number of the guardian and the guardian surety."
⁴⁴ While the Mental Hygiene Law calls for the annual report to be file din May, the Court and court examiners generally welcome receiving the annual report as soon after the 1st of the year as is practicable. Early filing benefits not only the Court and the court examiner, but also the Guardian as my experience has been that reports file in January or February are often reviewed by the court examiner and submitted to the Court for determination before May.
⁴⁵ Mental Hygiene L. §81.31(b)(1).
⁴⁶ Mental Hygiene L.§81.31(b)(2).
⁴⁷ Mental Hygiene L. §81.31(b)(2).
⁴⁸ Mental Hygiene L. §81.31(b)(3).
⁴⁹ Mental Hygiene L. §81.31(b)(5) requires that the statement be prepared by a physician, psychologist, nurse clinician, or social worker.
⁵⁰ For example, one Guardian may report that "my ward no longer remembers who I am or why I am visiting her. In addition, she is no longer able to walk without the assistance of a walker, at a minimum, and sometimes also requires the assistance of a person."
⁵¹ Mental Hygiene L. §81.31(b)(3).
⁵² For example, the Guardian may state, " as it was discovered that the incapacitated person's blood pressure had increased tremendously, her physician recommended that she be up on medication to control this condition."
⁵³ Mental Hygiene L. §81.31(b)(4).
⁵⁴ Mental Hygiene L. §81.31(b)(6)(ii).
⁵⁵ Mental Hygiene L. §81.31(b)(6)(ii).
⁵⁶ Mental Hygiene L. §81.31(b)(6) provides that the annual report should include "a statement by a physician, psychologist, nurse clinician, or social worker, or other person that has evaluated or examined the incapacitated person within the three months prior to the filing of the report regarding an evaluation of the incapacitated person's condition and the current functional level of the incapacitated person."
⁵⁷ Mental Hygiene L. §81.31(b)(5).
⁵⁸ Mental Hygiene L. §81.31(b)(6)(i).
⁵⁹ Mental Hygiene L. §81.31(b)(6)(iv) provides that the Guardian must provide "information concerning the social condition of the incapacitated person including the social and personal service currently utilized by the incapacitated person; the social skills of the incapacitated person; and the social needs of the incapacitated person."
⁶⁰ Surr. Ct. Proc. Act §1719.
⁶¹ In addition to Surr. Ct. Proc. Act §1719 offering flexibility as to the form of accounting, the clerk of the Court, or court examiner who is reviewing the accounting will often not require a specific form; however, the Guardian should call the office of the clerk of the Court or court examiner and inquire as to whether a specific form is required and should be guided by the responses received.
⁶² Surr. Ct. Proc. Act §1719(4) provides that "[t] he guardian of an infant's property may be required by the court to produce for examination by it all which he has relating to the estate of the [incapacitated person]." While the statute says that the guardian "may be" required to produce proof of the information contained in the accounting portion of the initial repot, in practice, the Guardian will almost always be required to produce all bank statements, cancelled checks, certificates of deposit, brokerage statements or other documents that confirm the information set forth in the accounting.
⁶³ Surr. Ct. Proc. Act §1719(3) provides that the Guardian must include in his report, "[t] he names and addresses of the sureties on his bond; if natural persons whether they are living and whether the security of the bond has become impaired."
⁶⁴ Surr. Ct. Proc. Act §1719(l).
⁶⁵ Mental Hygiene L. §803.0(b) sets forth that "the initial report shall contain a verified and complete inventory of the property and financial resources over which the guardian has control."
⁶⁶ If the incapacitated person has bank accounts, the guardian should inquire at each bank as to whether there are additional accounts in the name of the incapacitated person. Additionally, if there are brokerage accounts, the Guardian should contact the broker to see if the incapacitated person ever made purchases for which the proof of ownership, for example a stock certificate, was returned to the incapacitated person and possible not listed in the brokerage account.
⁶⁷ If the Guardian is not familiar enough with the incapacitated person to know whether or not he or she has expensive items of personal property the Guardian should review any policy of homeowners' or tenants' insurance held by the incapacitated person to see if any items are specifically identified therein. Note that safe deposit boxes should be located and inventoried in an effort to identify all assets of the incapacitated person.
⁶⁸ Once the Guardian has received a particular asset of the incapacitated person, that asset should be transferred into Guardianship name (e.g.."Jon Smith as the Guardian of the Person and Property of Mary Jones"). If the Guardian cannot secure the turnover of a particular asset, whether it be person or real property, the Guardian can bring a proceeding to discover property withheld pursuant to Mental Hygiene L.§81.44 to facilitate turnover.
⁶⁹ Surr. Ct. Proc. Act §1719(1) requires that the accounting contain not only "a true statement and description of each item of personal property", but also "the value of each item".
⁷⁰ If the latter approach is taken, the Guardian should make an effort to explain any changes in the value of a bank account between the Court evaluator's report and the Guardian's initial report.
⁷¹ If an accountant or brokerage firm is involved they should be able to supply you with this information if you request it. You may also want to ascertain the cost basis of any securities, stocks or bonds at this time. You will need cost basis, the value used to determine gain or loss upon disposition, to comply with tax reporting requirements. The Accountant or brokerage firm may be able to supply you with this information. If an accountant or a brokerage firm is not involved, you must examine stock certificates, tax forms and contact transfer agents to identify a date of acquisition, a value on this date, and to confirm any relevant stock splits, stock dividends, spin-offs, or mergers which may alter cost basis.
⁷² This ledger sheet may be kept by hand or may be kept on the computer. There are various accounting programs available to the Guardian. The programs very in complexity, compatibility, and price. Guardians who are computer literate should invest in an accounting program, which is sufficient to record the type of assets managed by the Guardian. A good program can be found for a very reasonable amount and if the financial information is input and categorized correctly, this program should be able to generate reports which categorize and total income, expenses, gains and losses, and in addition, generate lists of the assets on hand at the beginning and end of the accounting period.
⁷³ Note that both the caption to the schedule reporting gains and the caption to the schedule reporting losses contain the word "realized". These schedules are concerned only with realized, and not unrealized, gains and losses. For instance, if a particular security's value plummets, this is not reflected on either schedule unless the security is sold, liquidated or abandoned by the Guardian. If the security is held, it continues to be held at inventory value and the drop in value is no accounted for, but is conveyed by the market value listing on the schedule of assets remaining in the hands of the Guardian.
⁷⁴ Surr. Ct. Proc Act §1719(1).
⁷⁵ While I would suggest that you account on separate schedules of assets disposed of at a gain and assets disposed of at a loss, this is not always required by the Court or the court examiner.
⁷⁶ Be careful to distinguish interest from gain when a bond is liquidated or matures. Interest should be listed on the schedule of income, not the schedule of realized increases in assets, even if paid at maturity.
⁷⁷ As the Guardian does not have the power to transfer the real property of the incapacitated person, the sale of the real property of an incapacitated person must be approved by the Court pursuant to the requirements of Article 17 of the Real Property Actions and Proceedings Law. Following any approval sale, an accounting of proceeds and expenses resulting in net proceeds is submitted for court approval. This net proceeds figure should be used to determine gain or loss in the report.
⁷⁸ Proceeds listed should be net proceeds. For example, if your gross proceeds from the sale of stock are $1,000.00, but there is a $50.00 brokerage fee resulting in the receipt of $950.00, proceeds for your schedule of realized increases or schedule of realized decreases calculation should be $960.00.
⁷⁹ When one company for which securities are issued is taken over by another for which securities are issued, the new company will often issue shares based upon a conversion company. For instance, you may own 60 shares of company B which has been taken over by company A. Company A is offering 1.65 shares of company A for every one share of company B which will result in the receipt of 82.5shares of company A. Company A may automatically sell the .5 shares and send the proceeds to the address of record. The Guardian now has a transaction, which must be accounted for on either the schedule of realized increase or the schedule of realized decreases.
⁸⁰ If the Guardian chooses to abandon a security, the abandonment should be accounted for in the schedule of realized decreases. This may occur if the guardian is given, or locates, stock certificates in the name of the incapacitated person, which have little or no value. If a choice is made to abandon the security, the reasons for such abandonment should be indicated in brief in the entry on this schedule. If a complex explanation is necessary, it should be contained in an explanatory schedule.
⁸¹ If a sale, liquidation, distribution or abandonment takes place with no gain or loss, that is if proceeds or distribution value equal inventory value, the realization must still be accounted for and the correct place for such an accounting entry is on the schedule of realized decreases to assets.
⁸² Surr. Ct. Proc. Act. §1719(2).
⁸³ Please note that this schedule should contain only income, and not proceeds from the sales of an asset. For example, quite frequently when security companies spin-off, merge, or take over, they will issue new shares to a shareholder of record. The number of new shares received is based upon an equation and often results in the receipt of fractional shares, which the company never issues, but instead liquidates and issues a proceeds check for. The Guardian will receive this check. Despite the fact that this is a receipt, it should not be listed on the schedule of income received but instead must be correctly reported on either the schedule of realized increase or the schedule of realized decreases.
⁸⁴ Surr. Ct. Proc. Act §1719(2).
⁸⁵ Note that, for instance, dividend interest may become payable to the incapacitated person on the 15th of the month, the Guardian may not receive it until the 19th and may not deposit it until the 20th. IF this is the case, I would suggest that the date of receipt for reporting purposes is the 20th so that the court examiner, when examining the records of the Guardian, can more easily confirm receipt of the particular income payment.
⁸⁶ If dividend income is listed as received on 3/15, 6/17, 9/15, and 12/16 for a particular reporting period, there is no need to further identify the payment as the dates alone identify them as quarterly payments. However, should a fifth payment have been received on 1/3 which represented the December dividend from the prior year or a reissued September dividend, it should be so identified.
⁸⁷ For instance, if when preparing this schedule it is discovered that a particular income payment due has not been received, it should not be listed as received the Guardian is not yet in receipt of it. Instead, the absence of a particular income payment should be explained in the explanatory schedule. If received in the following year, the following year's report should identify the period for which the income was received.
⁸⁸ In fact, each Guardian upon appointment, should contact any appropriate payor, such as a social security or the transfer agent for a particular stock, to inquire as to whether there are checks, which have been issued to the incapacitated person, which remain outstanding or unnegotiated.
⁸⁹ Suggested ways to keep back up information include keeping a photocopy of each check received, labeling each deposit slip with a breakdown of the particular receipt or receipts being deposited, and indicating on any stub or paperwork that may have accompanied a receipt, the date of deposit and account into which such receipt was deposited.
⁹⁰ Surr. Ct. Proc. Act §1719(2).
⁹¹ If the report lists a $50.00 disbursement to "Michael Smith", the court examiner may have no way of knowing what this disbursement is for. The entry should contain the least amount of information necessary to fully and accurately identify the reason for the disbursement. An adequate entry would be "Michael Smith - podiatrist", or "Michael Smith-for lawn care).
⁹² For instance, if you generally show one payment to Surety Company per year, but this year you had to be additionally bonded because you sold real property, do not assume that the court examiner will recall that you needed an additional bond and therefore understand the second payment to the surety. Instead, clearly identify each payment with the minimum amount of information necessary to convey why the payment was made.
⁹³ Note that the order appointing the Guardian usually makes the payment of professionals, such as accountants or attorneys, subject to prior approval by the court.
⁹⁴ Surr. Ct. Proc. Act §1719(1).
⁹⁵ Id.
⁹⁶ The annual report form sent out by Queens County does not call for this information and this "Queens form" is also sent to Guardians by some court examiners and court clerks outside of Queens County when a format for an annual report is requested.
⁹⁷ An accounting type entry may appear as follows:
Company A. common stock
10/10/98 2.89shs. Purchased $97.38
⁹⁸ For example, "On October 10, 1998, Company A issued a dividend in the amount of $97.38 which was used to purchase 2.89 shares of the common stock of Company A pursuant to a dividend reinvestment program."
⁹⁹ Acquisitions include, for example, the reinvestment of dividends, the exchange of shares of one security company for another, or the receipt of shares of stock as the result of a stock split.
¹⁰⁰ Surr. Ct. Proc. Act §1719(1).
¹⁰¹ While the Guardian is permitted to request that the amount of the bond be increased or decreased, such a request is not required, as the court examiner should routinely make a recommendation to the Court if such a change appears to be in order.
¹⁰² While it is not critical that this information be included in the annual report, the Guardian may be well advised to begin inquiries for this information as it will become necessary to locate such information should the Guardian have to apply to the Court for permission to sell or transfer the incapacitated person's real property.
¹⁰³ While the Article 81 reporting requirements do not specifically call for the preparations and submission of a commission schedule, the reporting requirements do call for the annual report to be "in a form prescribed by the court", Mental Hygiene L. §81.31, and while in some counties, such as Queens County, the schedule of commissions Is neither required nor desired, in Westchester County such a schedule should be included. The Guardian should check with the clerk of the court or the court examiner in counties other than Westchester and Queens to determine whether the preparation of this schedule is necessary.
¹⁰⁴ Matter of McCormick, 220 A.D.2d 606,632 N.Y.S.2d 216 (2d Dep't, 1995)(Guardian not permitted to pay commissions before court award).
¹⁰⁵ Surr. Ct. Proc. Act §2309.
¹⁰⁶ Mental Hygiene L. §81.28(a) provides "[t] he court shall establish, and may from time to time modify a plan for the reasonable compensation of the Guardian. The plan for compensation for the Guardian may be similar to the compensation of a trustee pursuant to section two thousand three hundred nine of the surrogate's court procedure act; however, the plan must take into account he specific authority of the guardian to provide for the personal needs and/or property management for the incapacitated person."
¹⁰⁷ The Guardian must choose on the first annual report whether commissions will be calculated on the balance at the beginning of the reporting period or the balance at the end of the reporting period. This choice will likely bind successor Guardians as the Surrogate's Court Procedure Act. §2309 provides that "the option elected by the trustee for the first period for which such commissions are payable shall be used during the continuance of the trust and shall be binding on any successor or substitute trustee or trustees."
¹⁰⁸ If the real property has been sold during the accounting period, its value should not be excluded, as the Guardian will be entitled to commissions on its value for selling the real property.
¹⁰⁹ Trustees are entitled to "a commission from principal for paying out all sums of money constituting principal at the rate of 1 percent", however, this sum is due when the final account for the trust has been settled. Surr. Ct. Proc. Act §2309(1). In contrast, Westchester County allows Guardians to receive this one percent on sums paid out in excess of income on an annual basis, as opposed to on a final accounting.
¹¹⁰ Once the annual commission is determined, it should be divided by 365 and then multiplied by the number of days that the Guardian served. As with the calculation of an annual commission, the calculation used should be known in detail on the schedule of commissions.
¹¹¹ Surr. Ct. Proc. Act §1719(2).
¹¹² Mental Hygiene L. §81.31(b)(8).
¹¹³ Id.
¹¹⁴ Mental Hygiene L. §81.31(b)(9) which provides that the Guardian offer "a resume of any other activities performed by the guardian on behalf of the incapacitated person.
¹¹⁵ Mental Hygiene L. §81.31(b)(11), which indicates that the Guardian should report "any other information which the guardian may be required to file by the order of appointment."
¹¹⁶ Mental Hygiene L. §81.31(b)(10) requires that the Guardian report "facts indicating the need to terminate the appointment of the guardian, or for any alteration in the powers of the guardian and what specific authority is requested or what specific authority of the guardian will be affected".
¹¹⁷ Mental Hygiene L. §81.31(e) provides that "[I] f the annual report nets forth any reasons for change in the powers authorized by the court, the guardian shall make an application within ten days of the filing of the report on notice to the person entitled to such notice in accordance with paragraph three of subdivision © of section 81.16 of this article for such relief. If the annual report sets forth any reasons for a change in the powers authorized by the court, and the guardian fails to act in accordance with this subdivision, any person entitled to commence a proceeding under this article may petition the court of a change in such powers on notice to the guardian and the persons entitled to such notice in accordance with paragraph three of subdivision (c) of section 81.16 of this article for such relief".
¹¹⁸ Mental Hygiene L. §81.31(c) provides, in part, that "[I] f the incapacitated person resides in a facility, hospital, school or an alcoholism facility in this state as those terms are defined in section 12.02 of this chapter, a substance abuse program as that term is defined in section 19.03 of this chapter, an adult care facility as that term is defined in section two thousand eight hundred one of the public health law, the guardian shall send a duplicate of such report to the chief executive officer of that facility and the mental hygiene legal service of the judicial department in which the residence is located."
¹¹⁹ Mental Hygiene L. §81.31(c).
¹²⁰ Mental Hygiene L. §81.31(d).
¹²¹ Id.
¹²² Mental Hygiene L. #§81.31.
¹²³ The court examiner will likely contact you following appointment and may even forward guidelines for reporting to you. However, if you do not know the identity of the court examiner appointed in connection with your Guardianship, you should request this information from the Court so that you can forward your report to the court examiner in a timely manner.
¹²⁴ Mental Hygiene L. §81.32(b).
¹²⁵ Pursuant to Mental Hygiene L. §81.32(d)(1) the court examiner is entitled to demand that the Guardian file "proof of any item in the report".
¹²⁶ Mental Hygiene L. §81.32(e) provides that the court examiner "may examine the guardian and other witnesses under oath and reduce their testimony to writing".
¹²⁷ Mental Hygiene L. §81.32(a)(1)&(2).
¹²⁸ Mental Hygiene L. §81.32(e)(1) provides "[I] f a guardian fails to file his or her initial or annual report, the person authorized to examine the report shall demand that the guardian file the report within fifteen days after the service of the demand upon him or her. A copy of the demand shall be served upon the guardian or his or her resident agent by certified mail". In addition, Mental Health L. §81.32(c)(2) provides "[u] pon failure to comply with such demand, the court, may upon the motion of the court examiner, enter an order requiring compliance with the demand and may deny or reduce the amount of the compensation of the guardian, or remove the guardian pursuant to sections 81.35 of this article absent a showing that the guardian has acted in good faith."
¹²⁹ Mental Hygiene L. §81.32(d)(1) provides, in part, "[I] f the person authorized to examine the report is of the opinion that a more complete or satisfactory report should be filed, the person authorized to examine the report shall demand that the guardian file a revised report or proof of any item in the report." In addition, Mental Hygiene L. §81.32(d)(2) provides, in part, "[u]pon failure to comply with such demand, the court, may upon the notion of the court examine, enter an order requiring compliance with the demand and may deny or reduce the amount of the compensation of the guardian, or remove the guardian pursuant to section 81.35 of this article absent a showing that the guardian has acted in good faith.