Opinion
7570/1999
10-29-2020
In the MATTER OF Gerald RICHMAN, Guardian of the Person and Property of Tina Soifer, an Incapacitated Person.
The following papers numbered 1 to 6 read on this motion for an order: determining if the asset balance of the trust formed under the Will of the IP's deceased father, f/b/o the IP should be included under "Other Assets" on the annual accounting; determining to what extent a conflict exists, given that the guardian herein is also the trustee of said trust and its sole remainderman; determining the need, if any, to remedy said conflict and ordering such remedy; granting the court examiner an award for his legal fees incurred in bringing the instant motion; and granting such other and further relief as may be just and appropriate.
PAPERS NUMBERED
Notice of Motion-Affirmation 1-2
Affirmation in Opposition; Exhibits 3-4
Reply Affirmation 5
Memorandum of Law 6
Upon the foregoing papers, it is hereby ordered that the motion is resolved as follows:
The Court finds no conflict of interest arising from Mr. Richman's appointment as Guardian of Tina Soifer and Trustee/Remainderman beneficiary of the Testamentary Trust for the benefit of Tina Soifer, provided that same is included on the Guardian's Accounting to allow for Court oversight.
Factual and Procedural Background
Tina Soifer, a developmentally disabled woman, was adjudicated an Incapacitated Person by Order and Judgment dated June 22, 1999. She has resided at Pilgrim State Psychiatric Hospital since 1999. Pursuant to Order dated August 29, 2014, her cousin, Gerald Richman, was appointed sole Guardian of the Person and Property. It is undisputed that Gerald Richman, a resident of Florida since his appointment, has not visited Tina Soifer nearly as often as required by the statute, which required the issuance of an Order in 2014 revising the visitation requirement to provide for monthly visits from a "companion." It is also undisputed that since his appointment in 1999 through 2009, Gerald Richman did not file an Annual Account until the intervention of Albert Spencer, Esq., as successor Court Examiner.
Gerald Richman was also appointed as Trustee of the Testamentary Trust created for the benefit of Tina Soifer under the Last Will and Testament of her mother, Rose Soifer. Under the terms of the Trust, which is currently valued at approximately $250,0000, Gerald Richman is granted total discretion regarding the distribution of the trust income and principal for Tina Soifer's benefit. The Trust also names Mr. Richman as the sole remainder beneficiary upon Tina Soifer's death.
The Court Examiner moved this Court for clarification regarding the duties and obligations of the Guardian with respect to said Testamentary Trust. Specifically, whether Mr. Richman has a duty to include the Trust as a Guardianship asset on Annual Accountings and if a conflict exists in the Guardian being both the Trustee and sole remainderman of the Trust.
Conflict of Interest
The Court Examiner alleges there is a conflict of interest in Mr. Richman serving as Guardian and Trustee while also being the sole remainder beneficiary of the Trust. This Court finds no conflict of interest.
It is well settled that pursuant to Mental Hygiene Law Article 81, the appointment of a family member is preferred over the appointment of an unrelated third party when possible. (See Mental Hygiene Law § 81.19(a)(1) ; In re Joshua H. , 62 AD3d 795 (2d Dept., 2009) ; In re Audrey D. , 48 AD3d 806 [2d Dept., 2008] ). Herein, this Court has maintained a family member as Guardian of Tina Soifer since inception in 1999. While it is within the Court's discretion to appoint an outsider upon a determination that the available family member is, in some way, not suitable, herein there has been no allegation nor finding that Gerald Richman is not suitable to serve as guardian for his cousin, Tina Soifer. (See In re Audrey D. , 48 AD3d 806 [2d Dept., 2008] )
Accordingly, Gerald Richman's appointment as guardian, trustee and remainderman beneficiary does not create a prima facia conflict of interest "without proof of wrongdoing or unfitness to serve." ( In re Kathleen FF. , 6 AD3d 1035 [3d Dept., 2004] )
Obligation to Account
The Court Examiner seeks direction from the Court as to the requirement of the Guardian to include Trust assets on the Annual Account of Guardian. This Court finds that the Trust assets should be included on the Annual Account of Guardian.
The primary concern in selecting a guardian is the best interests of the incapacitated person. [ In re Audrey D. , 48 AD3d 806 (2d Dept., 2008) ] MHL Article 81 provides safeguards to ensure the both the personal safety and financial integrity of the incapacitated person. Such safeguards must be in place where, as here the Guardian is both Trustee and remainderman beneficiary. Although not expressly provided in either the testamentary trust nor MHL Article 81, the Court agrees with the Court Examiner that to allow the Guardian/Trustee/remainderman beneficiary to maintain control over Tina Soifer's assets without the requirement of accounting to anyone does not afford the necessary protections of Tina Soifer's best interests.
In line with the finding of the Appellate Division, Second Department in DiGennaro v. Cmty. Hosp. of Glen Cove , this Court cannot, in good conscience, allow the Guardian/Trustee/Remainderman beneficiary to maintain control over Tina Soifer's assets without requirement of accounting to a third party. ( 204 AD2d 259 [2d Dept., 1994] [wherein the court did not approve the creation of a supplemental needs trust for the benefit of an injured minor where his parents were both trustees and remainder beneficiaries without the requirement of accounting to the court]; see also In re Kathleen FF. , 6 AD3d 1035, [3d Dept., 2004] [upholding the appointment of a family member as guardian and trustee/beneficiary, stating that the appointment was appropriate "particularly in light of the court-ordered monitoring of her activities"] ).
While it is undisputed that Mr. Richman has not used any of the Trust income or principal, to date, for Tina Soifer's benefit, it is unclear whether the Trust funds are not needed by Tina Soifer due to her hospitalization or if Mr. Richman is breaching his fiduciary duty. It is also undisputed that Guardianship assets have been used to pay for Trust expenses and were only reimbursed to the Guardianship estate by Order of the Court. The need to account for the Trust is only compounded by the fact Mr. Richman strongly opposes the requirement of accounting to any third party for his actions as Trustee.
In light of the foregoing and the Court's duty to protect the interests of the Incapacitated Person, the Guardian is hereby directed to account for any Trust property held for the benefit of Tina Soifer on his Annual Account of Guardian.
This constitutes the Decision and Order of the Court.