SEPTEMBER 28, 2015 VOLUME 22 NUMBER 35
We handle a lot of guardianship and conservatorship proceedings at Fleming & Curti, PLC. We also meet with a lot of clients (or potential clients) and help them figure out how not to initiate a guardianship or conservatorship proceeding — we subscribe to the modern view that court involvement ought to be avoided when possible, and that people ought to be allowed the greatest possible autonomy and self-direction.
The view that court proceedings should be used sparingly is shared by the judges we work with in Arizona. That has not always been the case, and it is not necessarily true in every courtroom. It is easy for judges to get protective about the individuals they see in court, and sometimes judges can overreact.
We read this week about such a case, from Michigan. It involved a 74-year-old woman we’ll call Martha and her three daughters Dana, Diane and Dora. Martha’s husband (and the father of the three girls) had died a year before the legal troubles began, and Martha had spent some time in a hospital and a brief spell in a nursing home. Although she had returned to her home, she was a little weak and confused.
Martha had named Dana as agent in a power of attorney, and had made her co-trustee of the trust that held all of Martha’s assets. During the period of Martha’s illness, though, Dana had misused her position and had actually used some of Martha’s funds for her own benefit. Martha filed a court proceeding asking for an accounting from Dana. In the course of that family dispute, Dana asked the court to appoint a conservator to handle Martha’s finances.
Martha objected vigorously, but the judge ordered a psychological evaluation to address whether she could manage her own finances, and also appointed an attorney to act as Martha’s “guardian ad litem“. Both the psychologist and the guardian ad litem reported that Martha had memory limitations, but was not improperly using her funds or at any apparent risk of losing assets. Both noted that she had signed new documents naming another daughter, Diane, as her trustee and agent; that appeared to be appropriate and effective.
The judge hearing the dispute between Martha and Dana thought otherwise. He noted that the reports indicated Martha had “poor arithmetic and quantitative skills” and otherwise appeared to have diminished capacity. Michigan’s law (like Arizona’s) does not require a finding of incapacity before appointment of a conservator of the estate; the probate judge decided to appoint daughter Diane as conservator.
Diane did not think she needed to be Martha’s conservator. She thought that the trust and power of attorney were sufficient to allow her to help protect her mother. Martha also continued to believe that she did not need a conservator. Diane filed an appeal on behalf of her mother. Dana (still embroiled in her dispute with Martha over trust administration) disagreed, and argued that a conservator was necessary.
The Michigan Court of Appeals sounded a clear call for maximum individual autonomy and self-direction. It is not enough, ruled the appellate court, to show that Martha’s capacity is diminished by her memory and reasoning problems. Before a conservator can be appointed, it would also be necessary to show that Martha was unable to manage her own finances — or arrange for their proper management and protection.
Michigan’s conservatorship statutes (again, like Arizona’s) specifically direct the probate court to apply the law in a way that tends to “encourage the development of maximum self-reliance and independence,” noted the judges. In Martha’s case, she had appropriately chosen Diane to oversee her finances and had understood and signed the power of attorney and trust documents necessary to effect that change. Indeed, she had managed to monitor Dana’s handling of her finances sufficiently to observe that she had a problem that needed to be corrected. Appointment of a conservator was unnecessary and in fact impermissible in those facts. Bittner-Korbus v. Bittner, September 8, 2015.
The Michigan appellate court’s approach is consistent with what we see in Arizona, and what we like to implement in our practice. Is it possible to assist and protect the mildly impaired senior without recourse to the court? If so, we favor that alternative. Creating a trust, naming a trusted family member or friend as agent under a power of attorney, setting up a mechanism for monitoring finances — all of these approaches can help reduce the need for conservatorship or other court involvement.
It is worth observing that this is not just a matter of self-determination — it is also an issue of economics. Court oversight of a conservatorship tends to be an expensive undertaking. It can also be frustrating for both the subject of the proceedings and the conservator.
Of course conservatorship is an expense (and a frustration) that absolutely has to be incurred in many cases — but it should not be the default choice or even undertaken lightly or regularly. Our first effort is usually to try to figure out an alternative that provides both assistance, protection and even peace of mind.
[A word of warning about the principles we discuss in this article: not every state uses “conservator” and “guardian” the same way that Michigan (and Arizona) does. This case, and our observations about it, apply to conservatorship of the estate under Michigan’s law, which is very similar to Arizona’s.]