JULY 25, 2011 VOLUME 18 NUMBER 27
We have told you about Lillian Glasser before. She is a wealthy New Jersey woman with two children who disagree about where she resides, who should manage her health care and finances, and what should be done about financial actions taken in the months before court proceedings were begun. Much of the dispute centers over whether Texas or New Jersey courts should hear her case. That issue seems to have been put to rest, with New Jersey the victor.
To recap: Ms. Glasser, then worth about $25 million, lived in New Jersey. She occasionally visited her son in Florida (where she also had a rented home) and her daughter in Texas. In 2002, Ms. Glasser was persuaded to execute a new estate plan. She signed a will putting her daughter in charge of her estate, and a new power of attorney in favor of her daughter.
In 2004 and 2005, Ms. Glasser's daughter fired her mother's caretaker in Florida, moved Ms. Glasser to Texas, and initiated a Texas guardianship proceeding. In the meantime, she used her power of attorney to create a family limited partnership which she controlled, and transferred the bulk of her mother's assets into the partnership's name.
The Texas guardianship proceeding spawned a variety of legal actions. Ms. Glasser's son, a nephew who was close to her and a family friend all objected in Texas. The litigation costs in Texas exceeded a million dollars, with much of the cost being paid from Ms. Glasser's assets. The result: the Texas courts authorized her return to New Jersey, where there was more legal action pending.
After Ms. Glasser's nephew filed a separate New Jersey guardianship proceeding, that state's Adult Protective Services agency weighed in with a complaint alleging that Ms. Glasser had been subjected to exploitation. Those two actions were consolidated. Meanwhile, the Texas courts decided to wait until New Jersey had completed its review of Ms. Glasser's situation.
In 2007 the New Jersey court held a 34-day trial on Ms. Glasser's condition, the transfers of her assets, and the actions of the various players. The result: a judgment finding that Ms. Glasser's daughter exercised undue influence and behaved in her own interest rather than her mother's best interest, ordering return of all of the assets transferred into the family limited partnership, and appointing a bank as guardian of Ms. Glasser's estate and an independent party as guardian of her person. That ruling was the subject of our 2007 update on the Glasser litigation. Ms. Glasser's daughter appealed that ruling, as did two of the other litigants; much of the appellate argument focused on who should pay the extensive legal costs of the proceedings. The New Jersey Superior Court Appellate Division (that state's intermediate appellate court) has now -- four years after the original court findings -- ruled on those appeals.
Spoiler alert: the appellate court affirmed the extensive trial court decision without modifying a single finding or order.
The appellate judges approved the trial judge's finding that Ms. Glasser's daughter had exercised undue influence over her mother. They agreed that she should be ordered to put all of her mother's assets back into Ms. Glasser's name, to be managed by the bank named as guardian of her estate (what we in Arizona would call her conservator). They confirmed the daughter's history of inappropriate and evasive actions with regard to Ms. Glasser's placement and care, and agreed that she was not suitable to manage her mother's personal OR financial matters.
Then the appellate judges turned to the extensive fees incurred in the various legal proceedings in two states. They confirmed the trial judge's decisions that:
- Ms. Glasser's daughter should pay her own legal fees in both New Jersey and Texas. That meant that she would have to repay the money she had taken from her mother's assets to fund the Texas proceedings, for which she had paid her attorneys at least $1 million.
- Ms. Glasser's estate should pay the legal fees of the lawyer she selected to represent her (the court having found that she had the capacity necessary to hire an attorney of her own choosing). It should also pay the legal fees of her nephew, who filed the guardianship action in New Jersey, without forcing her daughter to reimburse those fees.
- Ms. Glasser's son argued that his mother's estate should pay most or all of his legal fees; the trial judge decided that it would not order her to pay all of his legal fees in Texas, and that (since he hadn't filed a guardianship petition in New Jersey) he was not entitled to reimbursement for his New Jersey expenditures. The appellate judges agreed, noting that his sister had no standing to object to the amounts allowed in any case.
In the Matter of Lillian Glasser, July 21, 2011.
So how much did Ms. Glasser's legal predicament cost her, and what was the total cost paid by all of the litigants in protracted proceedings in two states? It may be impossible to calculate exactly, but it is obviously several millions of dollars -- after all, her daughter's legal fees in Texas alone exceeded one million dollars.
Assuming (and the evidence is good) that the outcome is correct, was there a way to prevent the absurd expenditure of millions of dollars, the delay of half a decade, and the angst and anguish associated with this case? A few things might have helped:
- A carefully created and well-documented estate plan, drafted at a time when Ms. Glasser was clearly competent, might have headed off some of these problems. It might not, however. Ms. Glasser did have an estate plan in place in 2002, at a time when she was competent to make her plans. Her daughter's undue influence and over-reaching upset that plan over the next few years.
- If both Texas and New Jersey had adopted the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act prior to 2005 then considerable cost might have been avoided. That Act would have made clear that New Jersey had jurisdiction and Texas should not act -- the very conclusion that the respective judges reached, though only after more than a million dollars in legal fees. Unfortunately, the Jurisdiction Act did not exist in 2005. Since it was first proposed in 2007, about two-thirds of the states have adopted it (including Arizona). So far neither Texas nor New Jersey has. In fairness, adoption of the Jurisdiction Act might have sped the proceedings up by only a few months, and saved only a fraction of the many millions of legal costs.
- Mediation of the family disputes might have been effective -- but it might not have. The appellate judges made reference to Ms. Glasser's son adopting a "'take no prisoners' approach to anyone who disagreed with his views." Her daughter's intransigence is pretty clear from her actions and her legal posture. Perhaps they could not have ironed out their differences.