BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1339|
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THIRD READING
Bill No: AB 1339
Author: Maienschein (R)
Amended: 8/12/13 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 6/18/13
AYES: Evans, Walters, Corbett, Leno, Monning
NO VOTE RECORDED: Anderson, Jackson
ASSEMBLY FLOOR : 75-0, 5/13/13 (Consent) - See last page for
vote
SUBJECT : Professional fiduciaries: guardians and
conservators
SOURCE : Professional Fiduciary Association of California
DIGEST : This bill requires a professional fiduciary or other
person, who petitions the court for appointment of the
professional fiduciary to act as a guardian or conservator, to
provide an hourly fee schedule with the petition for
appointment. This bill requires the professional fiduciary,
upon filing an inventory and appraisal, to provide an hourly fee
schedule or statement of his/her proposed compensation from the
estate. This bill also establishes requirements, as specified,
for the authorization of periodic payments from the estate to
the professional fiduciary for services rendered.
Senate Floor Amendments of 8/12/13 conform the provision for
subsequent submission of an hourly fee schedule to the
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provisions for initial submission of an hourly fee schedule by
incorporating judicial discretion to later reduce the guardian's
or conservator's hourly fees or other compensation or his/her
attorney's fees or other compensation.
ANALYSIS :
1.Existing law, the Professional Fiduciaries Act (PFA),
establishes a licensing and disciplinary scheme for a
professional fiduciary and defines "professional fiduciary" to
mean a person who acts as a conservator, guardian, trustee,
personal representative, agent under a durable power of
attorney for health care, or agent under a durable power of
attorney for finances, for two or more persons not related to
the professional fiduciary or to each other by blood,
adoption, marriage, or registered domestic partnership.
(Business and Professions Code Section 6500 et seq.)
Existing law prohibits a superior court from appointing a
person to carry out the duties of a professional fiduciary, or
permitting a person to continue those duties, unless he/she:
(1) holds a valid, unexpired, unsuspended license as a
professional fiduciary under the PFA; (2) is exempt from the
definition of "professional fiduciary" under the PFA; or (3)
is exempt from the licensing requirements of the PFA.
(Probate Code (PROB) Section 2340)
Existing law authorizes a court to appoint a guardian of the
person, estate or both, taking into consideration the best
interest of the proposed ward. (PROB Section 1500 et seq.)
Existing law authorizes a relative or other person on behalf
of a minor child to petition the court for the appointment of
a guardian of the minor. (PROB Section 1510)
Existing law authorizes a court to appoint a conservator to
act on behalf of a person who is unable to adequately provide
for his/her personal needs (a conservator of the person) or
incapable of managing his/her property or other financial
assets (a conservator of the estate). (PROB Section 1800 et
seq.)
Existing law authorizes a proposed conservatee, or spouse,
domestic partner, relative, friend of the conservatee, public
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administrator, or other interested person to petition the
court for the appointment of a conservator of the proposed
conservatee. Existing law requires specified information to
be included in the petition. (PROB Sections 1820, 1821)
Existing law authorizes a court, upon a showing of good cause,
to appoint a temporary conservator or guardian to serve
pending the appointment of a permanent conservator or
guardian. Unless the court orders otherwise, existing law
provides the temporary conservator or guardian with only those
powers and duties that are necessary to provide for temporary
care of the conservatee or ward and to preserve and protect
the property of the conservatee or ward from loss or injury.
(PROB Section 2250 et seq.)
Existing law requires a professional fiduciary, who files a
petition to be appointed as the temporary or permanent
conservator of a person, to submit to the court a statement of
the professional fiduciary's registration or license
information and a statement explaining who engaged the
professional fiduciary or how the professional fiduciary was
engaged to file the petition for appointment as the temporary
or permanent conservator and what prior relationship the
professional fiduciary had with the proposed conservatee or
the proposed conservatee's family or friends, unless that
information is included in a petition for appointment for a
temporary or general conservator filed at the same time by the
professional fiduciary. (PROB Sections 1821(c), 2250(c))
This bill requires a petitioner or professional fiduciary who
petitions the court for appointment of the professional
fiduciary as a guardian or conservator of a ward's or
conservatee's estate to include in the petition the
professional fiduciary's proposed hourly fee schedule or other
statement of his/her proposed compensation from the estate for
services performed.
This bill provides that the professional fiduciary's provision
of a proposed hourly fee schedule or another statement of
his/her compensation would not preclude a court from later
reducing the professional fiduciary's fees or other
compensation.
This bill provides a procedure to notify the court and
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interested parties of changes to rates or fee schedules.
This bill extends the existing requirement of a professional
fiduciary who petitions to become a permanent conservator to
require a professional fiduciary who petitions to become a
permanent guardian to include in the petition a statement of
the professional fiduciary's license information and a
statement explaining who engaged the professional fiduciary or
how the professional fiduciary was engaged to file the
petition for appointment of a guardian or to agree to accept
the appointment as guardian and what prior relationship the
professional fiduciary had with the proposed ward or the
proposed ward's family or friends.
2.Existing law requires the conservator or guardian to file with
the court and mail to the conservatee or ward, within 90 days
of appointment, or as provided, an inventory and appraisal of
the estate. (PROB Section 2610)
This bill requires a guardian or conservator who is a
professional fiduciary to file, concurrently with the
inventory and appraisal, a proposed hourly fee schedule or
another statement of his/her proposed compensation from the
ward's or conservatee's estate for services performed as the
guardian or conservator.
This bill provides that the filing of a proposed hourly fee
schedule or another statement of the guardian's or
conservator's compensation would not preclude a court from
later reducing the professional fiduciary's fees or his/her
attorney's fees or other compensation.
3.Existing law provides that at any time after the filing of the
inventory and appraisal, but not before the expiration of 90
days from the issuance of letters or any other period of time
as the court for good cause orders, the conservator or
guardian may petition the court for an order fixing and
allowing compensation for services rendered to that point by
the conservator, guardian, or the attorney for the conservator
or guardian. (PROB Sections 2640, 2641)
Existing law permits the court to authorize periodic payments
to a guardian, conservator, or the attorney for the guardian
or conservator. (PROB Section 2643(a))
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Existing law provides that the petition requesting periodic
payment must describe the services to be rendered and the
reason why authority to make periodic payments is requested.
In fixing the amount of the periodic payment, the court is
required to take into account the services to be rendered on a
periodic basis and the reasonable value of such services.
(PROB Section 2643(c))
Existing law provides that periodic payments are subject to
review by the court at the next accounting to determine that
the services were actually rendered and that the amount paid
was not unreasonable. The court is required to make an
appropriate order if the court determines that the amount paid
was either excessive or inadequate in view of the services
actually rendered. (PROB Section 2643(c))
This bill clarifies the above provisions and specifies that if
the guardian or conservator is a professional fiduciary, the
court may authorize periodic payments to the professional
fiduciary only if he/she has filed a proposed hourly fee
schedule or another statement of his/her proposed compensation
from the ward's or conservatee's estate for services performed
as a guardian or conservator, and only after the court has
addressed any objections filed.
This bill requires, in the petition for periodic payments, the
professional fiduciary to describe the services to be rendered
on a periodic basis, provide the reason why authority to make
periodic payments is requested, and provide a good faith
estimate of the fees to be charged by the professional
fiduciary from the date the petition is filed up to, and
including, the date of the next succeeding account or, if the
next succeeding account is due in less than one year, a good
faith estimate of the fees to be charged by the professional
fiduciary from the date the petition is filed through the next
succeeding 12 months.
This bill requires, prior to ordering periodic payments or
fixing the amount of the periodic payment, the court to
determine whether making periodic payments is in the best
interest of the ward or conservatee, taking into consideration
the needs of the ward or conservatee and the need to preserve
and protect the estate. If the court determines that making
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periodic payments is not in the best interest of the ward or
conservatee, this bill requires the court to deny the petition
to authorize periodic payments. If the court determines that
making periodic payments is in the best interest of the ward
or conservatee, this bill requires the court to fix the amount
of the periodic payment. In fixing the amount of the periodic
payment, this bill requires the court to take into account the
services to be rendered on a periodic basis and the reasonable
value of those services.
This bill requires a notice of the hearing on the petition to
be served with a notice of how to file an objection to the
petition, and requires both of these notices to be provided to
the court investigator.
This bill authorizes interested persons to file with the court
a written objection to the authorization of periodic payments
and requires the court clerk to set any objections for a
hearing no fewer than 15 days after the date the objections
are filed.
This bill provides that if an objection is filed, the guardian
or conservator has the burden of establishing the necessity
for and amount, if any, of periodic payments.
This bill authorizes the guardian or conservator of the estate
to make the periodic payments authorized by the order only if
the services described in the petition are actually rendered.
This bill requires judicial review of the payments made
pursuant to the order upon the next succeeding account of the
guardian or conservator of the estate to determine that the
services were actually rendered and that the amount paid on
account was reasonable and in the best interest of the ward or
conservatee, taking into consideration the needs of the ward
or conservatee and the need to preserve and protect the
estate.
This bill requires the court to make an appropriate order
reducing the guardian or conservator's compensation if the
court determines that the amount paid on account was either
unreasonable or not in the best interest of the ward or
conservatee in view of the services actually rendered.
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This bill requires the authorization for periodic payments
terminate on a date determined by the court, but not later
than the due date of the next succeeding account.
This bill provides that a guardian or conservator would not be
precluded from filing a subsequent petition to receive
periodic payments.
This bill specifies that initial and subsequent submission of
an hourly fee schedule are subject to judicial discretion and
possible reduction of fees.
Background
In California, if an adult is unable to manage his/her financial
matters, a conservator of the estate may be appointed by a court
to manage the adult's (conservatee) financial matters. If the
adult is unable to manage his/her medical and personal
decisions, a conservator of the person may be appointed.
Similarly, a guardian of the estate or person may be appointed
for a minor child (ward).
A conservator or guardian is authorized to charge the
conservatee's or ward's estate for services rendered in
connection with managing the conservatee's or ward's financial
or personal matters. The conservator or guardian is required to
file a petition for fees for services rendered with the court.
A professional fiduciary is a person who provides
conservatorship or guardianship services for more than one
conservatee or ward to whom the person is not related. In 2006,
in response to reports that individuals acting as professional
fiduciaries were abusing and taking advantage of elders and
dependent adults, SB 1550 (Figueroa, Chapter 491, Statutes of
2006) was enacted and established the PFA. The PFA provides a
licensing and disciplinary scheme for professional fiduciaries
in order to protect conservatees and wards.
Recently, a Mercury News article exposed a problem with the
difficulty of conservatees and wards in challenging exorbitant
fee petitions submitted by professional fiduciaries, who may be
appointed by the court to act as the conservator or guardian of
the estate. The article reported that "a six-month
investigation by this newspaper found a small group of [Santa
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Clara] [C]ounty's court-appointed personal and estate managers
are handing out costly and questionable bills -- and charging
even more if they are challenged. The troubling trend is
enriching these private professionals -- working as conservators
and trustees -- and their attorneys, with eye-popping rates that
threaten to force their vulnerable clients onto government
assistance to survive." (de S�, Santa Clara County's
court-appointed personal and estate managers are handing out
costly and questionable bills, Mercury News (June 30, 2012)
[as of June 9, 2013].) Conservatees and wards,
under existing law, may be required to pay the litigation costs
of the conservator and guardian, but existing law does not
similarly allow a conservatee or ward to recover their
litigation costs, even if he/she is successful in challenging
the fee petition.
Prior Legislation
SB 1716 (Bowen, Chapter 492, Statutes of 2006) authorized court
action on informal reports of abuse and neglect from concerned
friends or family members; gave the court the ability to order a
review of a conservatorship at any time; and required that court
investigators more fully examine conservatees.
SB 1116 (Scott, Chapter 490, Statutes of 2006) remedied some of
the problems with the state's conservatorship system and
established a special procedure for the sale of a conservatee's
primary residence.
AB 1363 (Jones, Chapter 493, Statutes of 2006), among other
things, required an enhanced review of conservators and judicial
responsibility, along with uniform standards of conduct required
by conservators.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 6/24/13) (Unable to reverify at time of
writing)
Professional Fiduciary Association of California (source)
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ARGUMENTS IN SUPPORT : According to the author:
Currently, no fee schedule or statement of the conservator
compensation is required to be submitted to the court prior to
appointment as a conservator. This, at times, can lead to
"sticker shock" when a conservatee's estate does not learn of
the fees until many months after the appointment of a
professional conservator. Understandably, an invoice can seem
unreasonably high when a significant span of time has passed
before a bill is received.
AB 1339 would require that when a petition to appoint a
conservator or a temporary conservator is filed, and the
petitioner is a professional fiduciary, the petition also
include the petitioner's proposed hourly fee schedule.
AB 1339 also allows for the filing of petitions for periodic
payments for the services rendered by appointed conservators
who are licensed professional fiduciaries. Periodic payments
would be subject to objections and would require review by the
court prior to approval. In the case of an objection, the
burden of establishing the necessity for periodic payments
would fall on the conservator. These periodic payments could
ease the financial impact on an estate that would otherwise be
forced to make a one-time payment for all services already
provided over many months, potentially up to a year and a
half.
In addition, AB 1339 would require an estimate of the
petitioner's proposed compensation from the estate for the
first year, for services to be performed when requesting
periodic payments. This estimate would be submitted
concurrently with the completion of an inventory and appraisal
of the estate. This additional requirement would be submitted
by a conservator who is a licensed fiduciary, within 90 days
of the appointment.
These new requirements would add transparency and
accountability regarding the fee schedule, estimate, and
proposed compensation when the courts appoint conservators who
are licensed professional fiduciaries.
ASSEMBLY FLOOR : 75-0, 5/13/13
AYES: Achadjian, Alejo, Atkins, Bigelow, Bloom, Blumenfield,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
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Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Jones,
Jones-Sawyer, Levine, Linder, Logue, Maienschein, Mansoor,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Torres, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Allen, Ammiano, Holden, Lowenthal, Vacancy
AL:k 8/13/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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