Private Fiduciary Appointed Because Of Family Fight

FEBRUARY 12, 1996 VOLUME 3, NUMBER 33

When Rose Kelly died in Phoenix in 1993, she left behind five children and her husband of many years, Francis. Mrs. Kelly had taken care of Mr. Kelly for several years prior to her death; his advancing confusion and memory loss made it difficult for him to take care of his own personal or financial affairs.

In the course of settling Mrs. Kelly’s estate, her children learned that Mr. Kelly’s Will left his home to a favored grandson (Jeffrey), who had been actively involved in Mr. and Mrs. Kelly’s life for his entire adult life. Jeffrey’s mother Connie (one of Mr. Kelly’s four daughters) had also been actively involved, having lunch with her father at least six days a week.

Upon learning of the Will, Mr. Kelly’s son Donald took Mr. Kelly to a lawyer in Phoenix to prepare a new Will. The result: Jeffrey’s bequest was deleted, and Mr. Kelly named Donald as agent under a durable power of attorney. Over the next few weeks, Donald changed all his accounts (over $400,000 in assets) into joint tenancy between Mr. Kelly and Donald.

Relationships among the Kellys deteriorated rapidly, and a family meeting was called to try to resolve differences. The gathering broke up abruptly when Mr. Kelly threatened Connie and Jeffrey. Soon after, another daughter (Joyce, who had been estranged from Mr. Kelly for years) moved in to take care of him, and Connie and Jeffrey found that they could not visit their father and grandfather without suffering verbal threats and abuse.

Believing that part of the problem was the control of Mr. Kelly by other family members, Connie filed a petition to be appointed as conservator and (later) guardian. Donald and Joyce countered that Donald should be appointed.

At the hearing, Connie’s attorney produced a multi-disciplinary evaluation by two physicians, a psychologist and a social worker. Their conclusion was that Mr. Kelly needed both a guardian and conservator, and that the best hope for Mr. Kelly would be appointment of an independent fiduciary.

The court-appointed investigator agreed, writing that “the only way I can see to diminish the conflict and aggressiveness of the family is to remove them one step from the decision-making process.” Judge Skelly appointed Nancy Elliston, a Phoenix private fiduciary, as both guardian and conservator. (Ed. note–completely unrelated to the situation with the Kelly family, Nancy Elliston subsequently developed her own legal problems. See Phoenix Leader In Private Fiduciary Industry Goes To Jail, the January 31, 2000, Elder Law Issues)

Donald and Joyce appealed the appointment of Elliston as guardian (they had agreed that she could be appointed conservator). They contended that their own expert disagreed with the multi-disciplinary evaluation, and that family members should have priority over strangers. Joyce, Elliston and Mr. Kelly’s attorney all disagreed.

The Arizona Court of Appeals determined that, even though one expert did not feel the guardianship was necessary, the trial court could choose to believe the multi-disciplinary evaluation instead. The Court also upheld the appointment of Elliston. Arizona law establishes a priority list for appointment of guardians, with family members near the top and professional fiduciaries at the bottom. However, the law permits the trial court to ignore the priority list if the “best interest” of the ward requires appointment of someone else. In this case, said the Court of Appeals, the trial judge properly determined that family members were unlikely to act in Mr. Kelly’s best interest. Quoting from an earlier case from Iowa, the Court noted that “from time to time wards need more protection from kin than from strangers.” Kelly v. Elliston, Arizona Court of Appeals, Division One, January 25, 1996.

Unfortunately, the Kelly family feud is all too common an occurrence. Private fiduciaries exist (and thrive) precisely because of such family difficulties.

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