Posts Tagged ‘guardianship’

Attorney Representing Incapacitated Adult Ordered to Refund Fees

JUNE 22, 2015 VOLUME 22 NUMBER 23

How much does it cost to establish a guardianship or conservatorship? Is there any limit on the possible legal costs? These are questions that we deal with on a regular basis.

The short answer, at least in Arizona, is that the attorneys and other professionals in a guardianship/conservatorship proceeding can only charge a “reasonable” fee, and that the Court almost always has the authority to review — and, in appropriate cases, reduce — the fees charged. But that doesn’t help identify what a “reasonable” fee might be.

A recent case from the Washington Court of Appeals sheds a little light on attorneys’ fees in guardianship cases. It also helps make clear that the court’s review includes fees incurred — and paid — before any finding of incapacity was entered.

Kamiko Davis (not her real name) came to the attention of state officials because she had apparently been the victim of financial exploitation. She was an elderly woman who had, years before, immigrated from Japan, and she was more comfortable speaking Japanese. She was suspicious and uncooperative with authorities, and, after the financial exploitation she had suffered, she had an estate of about $700,000. When the investigating agency filed a petition asking for appointment of a guardian (of the person and the estate — what we would call guardianship and conservatorship in Arizona), it was evident that she would benefit from having a lawyer who spoke at least some Japanese, and who would be familiar with Japanese culture and traditions.

That’s how attorney Daniel Quick was appointed as Kamiko’s attorney. In the initial appointment the judge ordered that Mr. Quick’s fees should be limited to $250/hour for a maximum of 10 hours — or about $2,500. Over the next few months, as it became apparent that Kamiko would strenuously object to the legal proceedings at every turn, the court increased the maximum number of hours that could be billed — to a total of 50 hours.

Kamiko signed a durable power of attorney naming her attorney as her agent (for both medical and financial purposes), and a fee agreement with no limitation on the number of hours which might be billed. At some point the probate court decided that Kamiko had not had the capacity to sign the power of attorney, and eventually a limited guardian (of Kamiko’s person and of her estate) was appointed.

The attorney then filed his request for approval of fees charged for his representation. The application showed that he had received $118,110.65 already, and requested an additional $17,137.50 in fees and costs.

The probate court declined to approve Mr. Quick’s additional fees, and ordered that he return all but $30,000 of the fees he had already collected. The judge’s reasoning: whether or not Mr. Quick legitimately put in all the time he claimed, the total amount of fees was simply unreasonable. The $30,000 approved worked out to about 120 hours of legal work (assuming the same $250/hour), and the judge was critical of the attorney’s failure to limit litigation costs, even if his client was difficult to deal with and required special attention.

The Washington Court of Appeals upheld the limitation on attorney’s fees. Even though Kamiko had not been adjudged incapacitated at the time she signed a fee agreement, she was ultimately found to need a limited guardian — and a finding of incapacity was entered at that time. Besides, the appellate court noted, Mr. Quick had been ordered to limit his hours in earlier court rulings, and the amount ultimately approved actually exceeded those limitations.

The bottom line, according to the Court of Appeals: “The court, in overseeing guardianships, must weigh the competing concerns of individual autonomy and protection of incapacitated persons.” That meant that the reduction in allowed fees, and the order for return of over $80,000 in fees already collected, were appropriate in the circumstances. Guardianship of Decker, June 16, 2015.

Would the same result be reached in an Arizona proceeding? Very likely (although, of course, very small changes in the fact pattern might yield very different results). Arizona’s statutes expressly give the probate court the authority to review fees — for attorneys and for other professionals — in guardianship and conservatorship proceedings (Washington’s statutes were held to give that authority, too, but not as clearly or explicitly as Arizona’s laws).

Arizona also has an existing appellate decision which clearly enunciates some of what the Washington Court of Appeals articulated. In 2010, in Sleeth v. Sleeth, the Arizona Court of Appeals ruled that the litigants in guardianship and conservatorship proceedings must pay attention to whether legal fees are ultimately in proportion to the benefit enjoyed by the estate. The underlying facts are strikingly similar: the Arizona case involved assets of slightly more than those in the new Washington case, and legal fees that were larger by a similar proportion. One important difference: the lawyers whose fees were challenged in Arizona represented the guardian/conservator, not the subject of the proceeding.


Financial Exploitation Case Leads to Judgment, Disinheritance


We hear variations on this same story once every week or so. Dad (it might be Mom, or Aunt Bridget, or a long-time family friend) seemed to be adrift after his wife (her husband, her long-time companion) died. Then he met this woman who moved in with him (or moved her to his town), cut off family contact, got a power of attorney signed and proceeded to transfer assets.

Too often there’s not much we can do about the story. The money may be all gone (the people who take advantage of seniors in this fashion are often drug users, gamblers or marginal characters themselves). The family member might actually want to live with the person everyone sees as an exploiter. Sometimes it’s hard to even locate the victim.

Once in every few cases, though, it may be possible to protect the elderly victim, improve their situation and even secure a judgment against the exploiter. That’s what happened in a case that finally (after a decade of litigation) seems to have gotten resolved by the Arizona Court of Appeals.

Bridget Greene (not her real name) was 99 when she first came to the attention of Tucson lawyer (and professional fiduciary) Denice Shepherd (her real name) in 2005. Based on a report from Adult Protective Services, Denice filed a guardianship and conservatorship proceeding to extract Bridget from her “deplorable” living situation, and to begin the process of recovering some or all of her assets.

As the story developed, it became apparent that Bridget had befriended one Andrew Brice almost two decades earlier, after her husband’s death. She and her husband had no children; her closest relatives were nieces and nephews. Just two years before the guardianship/conservatorship proceeding, Bridget had moved back to Arizona after a short stint living near her nieces in Virginia. She had then signed a power of attorney naming Andrew as her agent, and transferred her home into Andrew’s name. She had also signed a new, handwritten will leaving everything to Andrew.

Denice promptly initiated an action against Andrew, seeking return of the money he had moved from Bridget’s account to his own. She recovered over $60,000 from three bank accounts, and then initiated a complaint against Andrew claiming that he had exploited a vulnerable adult.

Under Arizona law at the time (it has since been softened), a person found to have exploited a vulnerable adult would automatically be liable for three times the amount taken, plus being disinherited from receiving anything from the victim’s estate. Denice secured a judgment against Andrew for $247,531.23 (three times the amount he had taken); the handwritten will and power of attorney were also invalidated. The judgment was reduced by $65,155.99 that Denice had collected from Andrew by that time.

Bridget lived another five years after being removed from her filthy home and the “care” she had been receiving. After she died in 2010, Andrew tried to reassert the handwritten will naming him as beneficiary. He also challenged Denice’s appointment as guardian and conservator, and the award of damages and attorneys fees.

The probate judge ultimately found that Andrew had been disinherited by his exploitation, that he had no basis for seeking Denice’s removal as guardian and conservator, that Bridget’s prior will (which had left nothing to Andrew) was valid, and that the judgment against him was proper. When Andrew appealed, the Court of Appeals agreed on every point.

It is worth noting, as the Court of Appeals does, that much of probate court’s ruling against Andrew is based on his failure to proceed properly in the underlying lawsuit. He answered the complaint with a general denial, but without specific allegations that would support his argument. His response to a motion for entry of judgment against him did not challenge the factual allegations, which were thus assumed to be correct. He filed numerous pleadings and motions, but apparently without good legal advice.

The final resolution of Bridget’s guardianship/conservatorship/probate case, though, was clear. Bridget was a vulnerable adult, impaired by her diminishing mental capacities. Andrew was her caretaker (he claimed that they held themselves out as a married couple, but he acknowledged that they were never actually married), and owed her a duty not to commingle their assets or take advantage of her. He breached that duty by transferring her assets into his own name. He might have also neglected her, though the probate court never had to reach that question.

Arizona law at the time provided for automatic disinheritance of someone who exploits a vulnerable adult (it has since been changed to permit, but not require, the court to order disinheritance). It also provided for damages automatically set at three times the amount actually exploited (it has since been changed to allow the court to enter judgment of up to two times the amount of damages). The Court of Appeals upheld the orders entered by the probate court under the “vulnerable adults” statute. In Re Garner, Deceased, February 25, 2015.

Even though Arizona’s law has been relaxed somewhat, it remains stronger than the similar provisions in many other states. Although it is often hard to recover damages for abuse, neglect or exploitation of vulnerable seniors, sometimes the legal tools actually work fairly well. Similar stories might be told in other states, though we don’t hold ourselves out as experts on other states’ laws or practices. But if you know someone who has been taken advantage of in similar circumstances, we strongly suggest that you get good legal advice to consider whether there might be some recourse to recover lost assets and, much more importantly, protect vulnerable seniors and improve their lives.

Arizona Guardianship and Mental Health Treatment


A guardian (of the person) is often said to have all the powers over her ward that a parent would have regarding a minor child. In other words, if the court appoints you as guardian over your mother or father, you have (at least in a legal sense) switched roles. But there are some things a guardian can not do — chief among them, at least in Arizona, is a limitation on a guardian’s ability to secure inpatient mental health treatment.

A word of warning is appropriate here: all of our newsletters focus on Arizona law — though the principles are often similar in other states. This installment will not be one of those. It relies completely on an Arizona statute and practice that are not widespread — so far as we know, no other state has quite the same approach to getting inpatient mental health care for someone under guardianship.

Generally speaking, an Arizona guardian has the authority to approve or arrange for mental health treatment for her ward. The guardian can authorize the administration of psychotropic medications. Similarly, the guardian can approve psychiatric treatment in an outpatient setting, or the delivery of psychiatric services to a ward who is in the hospital, a nursing home or a secure residential facility.

But an Arizona guardian does not have the power to place her ward in a locked psychiatric facility without further court involvement. That is expressed in Arizona law by limiting the guardian’s authority to admit her ward to a “level one behavioral health treatment facility.” That describes a locked-ward inpatient psychiatric program, so a guardian is usually unable to admit her ward to involuntary mental health treatment in a locked psychiatric ward.

How does a mentally ill patient get inpatient mental health treatment when it is required? There are two ways: either the mental health system must initiate an involuntary treatment petition (what is sometimes called a “civil commitment” proceeding), or the guardian must have gotten special authority to admit her ward to inpatient treatment in advance.

Why does it take an additional proceeding to get needed mental health care for an ill ward? Because the mental health system if very protective of the civil rights of individual patients, and involuntary placement in a locked ward looks very much like incarceration to the unhappy patient.

Would it make sense, then, for every Arizona guardian to get the mental health authority in advance, just in case it turns out to be needed? No — that is not even possible unless the ward is actively mentally ill at the time of the guardianship petition.

The Arizona statute on mental health guardianships (Arizona Revised Statutes section 14-5312.01) spells out what is required. In addition to the evidence required to get a guardianship at all, the guardian must file a report from a psychiatrist or psychologist, show that the ward is currently mentally ill, and establish that there is likely to be an actual need for institutionalization within the upcoming year. The authority to make the placement decision expires in one year, whether or not it is used; the guardian must take steps to extend the authority by collecting additional affidavits from a psychiatrist or psychologist, setting a court review time and giving notice to her ward. The process is somewhat automatic once those documents are filed, but there is usually no reminder or assistance from the court or the mental health treatment system, and so a guardian must be diligent to get the authority extended.

Every Arizona guardianship requires that the ward have counsel; if the court appoints an attorney to represent the ward, that appointment may end once the guardianship is established (at least in some Arizona counties — practices differ). But if the guardian has mental health powers, the attorney’s involvement continues indefinitely. That means that the guardian must continue to give notice to (and involve) the attorney for at least as long as the mental health authority continues.

Does that mean that the mental health authority is usually worthless? Not at all. It is not often even available, but in cases where it is a legal possibility, it can shorten the process of getting mental health treatment for a loved one who is decompensating. It also can provide significant comfort to family members who are anxious to have all the tools that might be helpful — even if it does not often get used.

Arizona guardians should know about the mental health treatment limitations and special authority available in some cases. Not very many guardian will need to pursue getting the mental health power added to their guardianships, but for those whose wards are actively mentally ill (and in and out of treatment facilities), the authority can be helpful and comforting.

Which is Better: Guardianship or Power of Attorney?


Here’s a question we get asked a lot: “which is better for me to get for my mother — a guardianship or a power of attorney?” Sometimes the questioner is checking on the difference between a conservatorship and a power of attorney or (less commonly) a guardianship and a conservatorship. But the question almost always has the word “better” embedded somewhere.

The question itself is misleading, and our answer almost never satisfies. The problem is simple: if your aging parent needs someone to make decisions (medical, placement, financial or other decisions) for him or her, you almost never have a choice about whether to pursue getting a signed document (like a power of attorney) or a court order (like a guardianship or conservatorship). Why not? Because if your parent is able to sign a power of attorney, he or she is probably not a candidate for a guardianship or conservatorship. Conversely, if you could get a guardianship or conservatorship order, your parent probably can’t sign a power of attorney.

A word about language, and the peculiarities of Arizona law: in Arizona (and in some but by no means all other states) a “guardianship” is a court proceeding in which one person is given decision-making authority over another person’s medical care, placement and personal decisions. A “conservatorship” is a similar court proceeding, but with the end result that one person is given authority over another person’s finances. And Arizona does not have a procedure (as some other states do) for a “voluntary” conservatorship, which would allow the court to appoint a conservator even though the person in question is fully competent but willing to allow appointment of a conservator.

In order to have the court appoint a guardian or a conservator in Arizona, you would need to show that your parent (or other family member, or friend for whom you are ready and appropriate to act) is unable to make and communicate responsible decisions. That, actually, is the magic language for a guardianship; conservatorship requires you to be able to show that your parent, family member or friend is unable to provide proper management of his or her assets.

A power of attorney, on the other hand, does not involve courts at all. Signing a power of attorney is a voluntary act undertaken by a competent individual who understands the purpose and effect of his or her signature. As you can see, that is likely not possible for most people for whom a guardian and/or conservator could be appointed.

So the question is usually not which approach would be “better” — it is which approach is possible. If the individual is not able to sign a power of attorney, we usually add our own question to the mix: is getting a guardian and/or conservator appointed the best way to handle the problems that have arisen — is it even necessary to pursue guardianship or conservatorship?

Now pose the question differently. You are a fully competent adult, thinking about your future. You are worried about having someone available and able to take over your personal (health care) and financial decisions if you should be come unable to do so yourself. Is it better for you to sign a power of attorney, or should you simply rely on the legal system to establish a guardianship and/or conservatorship when the time comes for you?

The answer to THAT question is easy, at least in the vast majority of cases. The cost, difficulty, and invasion of your personal dignity involved in a guardianship/conservatorship almost always makes it better for you to sign a power of attorney now, while you can make your own choice. Who should NOT sign a power of attorney? Really only people who have no one trustworthy enough to take responsibility (and there are people in that unfortunate situation — to many people, in our experience) should make a conscious decision to NOT sign a power of attorney.

Notice that we have not distinguished here between (a) health care powers of attorney and (b) financial (or “general”) powers of attorney. That’s because the same values and decisions apply to both. But, in Arizona, at least, there is one important difference between the two levels of urgency: your next of kin (and some others, if you do not have close family members) might have the authority to make health care and even placement decisions for you even though you have not signed a power of attorney (and no court proceedings have been initiated). Family members — even spouses — do NOT have any authority to handle your finances without a power of attorney, however.

Which is better? If you are in a position to plan for yourself, it is almost always a good idea to choose an agent (you can choose different financial and health care agents, if you’d like) and sign powers of attorney. Do it now — don’t wait until you actually “need” the documents, because that will almost certainly be too late. Don’t rely on your belief that everyone knows what you want — that carries no weight in the legal system, unless it has been reduced to writing.

If you’re facing the problem from a child’s perspective, we’re sorry to say that it’s almost never relevant to tell you which approach is “better.” Usually it is a question of which is available. We can help, but it is likely to be more expensive and difficult if your parent (or spouse, or even child) didn’t get around to signing a power of attorney.

Ward Seeks Court Permission to Marry His Girlfriend

JUNE 2, 2014 VOLUME 21 NUMBER 20

We have written before — earlier this year, in fact — about whether individuals who are under guardianship have the ability to get married. When this question comes up (and it should be said that it is rare) it usually is in a context like that of our January story about “Cynthia Madsen” — an older family member, usually a parent, gets married (often to a caregiver) and that marriage is challenged after the fact. Sometimes, though, the story can play out in a different direction.

Matt Obregon (that’s not his real name) is a 27-year-old living in Minnesota. His parents have been appointed as guardian of Matt’s person, because he lacks capacity to make his own decisions about medical care and living arrangements. Matt has diagnoses of bipolar disorder and severe attention deficit hyperactivity disorder.

Matt lives in a group home, where he has responsibility for his own general housekeeping duties but is mostly free to come and go as he pleases. He takes several medicines, and the group home staff manages his medication regimen. The court that appointed his parents as guardian specifically gave them authority to give or withhold approval of any contract Matt enters into other than one for “necessaries” (i.e. — food, shelter, medical care and the like).

When Matt was about 23 he began dating Eliza, a young woman who is in a day program for individuals with special needs. Eliza has a young child (not Matt’s), and Matt and Eliza spend a lot of time together. Matt sleeps over at Eliza’s residence about once a month, and they get together about twice a week.

After a couple years of dating, Matt and Eliza decided they wanted to get married. Matt’s parents (remember that they are his guardians) did not think it was in Matt’s best interest to marry Eliza, and so they withheld approval.

The way this story would play out for most of the contested marriage scenarios we see would have been for Matt and Eliza to get married anyway, though they might have to go to a different county, or even a different state, in order to get a license, since Matt has a guardian. Matt’s parents would then have to decide whether to seek to annul the marriage, or initiate a divorce proceeding as his guardian, or simply let the marriage stand. But that’s not the way this story played out.

Instead, Matt filed a petition with the guardianship court, asking permission to marry Eliza. He argued that even though he had a guardian, he had the capacity to understand the nature of a marriage and the responsibilities that he would be taking on. His guardians disagreed, insisting that Matt’s limitations made it impossible for him to consent to the marriage.

Note that the issue before the guardianship court was not whether it would be in Matt’s best interests to allow him to marry. Instead, it was whether he had the necessary level of capacity to enter into a marriage agreement. Both parties agreed that a ward under guardianship can marry if he or she has capacity; their only disagreement was about whether Matt had the capacity.

Matt’s parents testified in the subsequent court proceeding, telling the judge about several recent incidents indicating Matt’s limitations. In one, he had shot out windows at a cabin using a BB gun. In another, he had grabbed the wheel of the group home van while residents were on an outing. The court also considered letters, apparently from one of Matt’s doctors, saying he suffered from a variety of conditions and had an IQ of 71. According to Matt’s mother, his functional ability is about that of a seven-year-old.

At the end of the hearing the guardianship judge ruled that Matt did not have the requisite mental capacity to “make or communicate responsible decisions regarding his person, including the ability to enter into a marriage contract.” Matt’s request to marry Eliza was denied.

The Minnesota Court of Appeals next considered Matt’s request, and it disagreed with the guardianship judge. According to the appellate court, the question is not whether Matt’s mental state differs from the accepted norms — the inquiry should focus on whether Matt has the capacity to understand marriage and to choose a spouse. The findings of the guardianship court should have been focused not on his diagnosis or his behaviors, but on whether he can comprehend the nature of the marital relationship, the obligations he would be taking on, and the benefits he might obtain from marrying.

A marriage contract is indeed a contract, noted the appellate court. But it is a different kind of agreement than a commercial contract (to buy a car, say, or to rent an apartment). Because marriage is a fundamental right, and because wards should be permitted — and even encouraged — to exercise as much personal autonomy as possible, any restriction on the ability to get married should be sharply limited.

Does this mean that Matt and Eliza can now get married? Not yet. The Court of Appeals sent Matt’s request for what’s called a “declaratory judgment” back to the probate judge for further hearings and a final decision. The next hearing, though, must focus narrowly on Matt’s capacity to get married, not on his diagnosis and behaviors. And one other thing: the burden of proving that he does not understand the nature of marriage rests on his guardians — it is not his burden to affirmatively show that he has capacity, even though he does have a general guardian. Guardianship of O’Brien, May 27, 2014.

Would the same standard apply in an Arizona guardianship court? It’s not clear — there is not much case law, and no clear statutory authority. But the Minnesota decision does reflect modern thinking about personal autonomy and self-determination for people under guardianship, and it seems likely that it would be persuasive (but not controlling) in a similar Arizona proceeding.

State Court Does Not Control Social Security Payments

MAY 12, 2014 VOLUME 21 NUMBER 17

At Fleming & Curti, PLC, we do not handle divorce cases. From time to time, though, a divorce case raises the same kinds of issues that we see in the guardianship, conservatorship and probate cases we do handle.

A recent Arizona Court of Appeals decision is a case in point. It involves the divorce of a Navajo County, Arizona, couple, Donna and Edward. When the couple divorced in 2009, Donna was awarded custody of their four children. Edward was ordered to pay child support.

When Edward began collecting Social Security benefits on his own account, the children were entitled to receive $362 each per month. Social Security named Edward as “representative payee,” which meant that the children’s checks were made payable to him and he was required to account to the Social Security Administration each year.

Donna filed a petition with the divorce court to modify the support and visitation orders. She also alleged that Edward had been taking the children’s Social Security money and spending it as he saw fit — and that she should be the representative payee since she had sole custody of the children. At some point she apparently applied to Social Security to become the payee, and the payments were switched to her name. Still, she wanted Edward to account for — and return — the payments received for a nine month period starting right after the divorce.

The judge in the divorce court agreed, and entered a judgment against Edward (and in favor of Donna) for the amount of the payments he found to have been “misappropriated.” The judge also held Edward in contempt for failing or refusing to turn over the Social Security.

Edward appealed, and the Arizona Court of Appeals briefly reviewed the interrelationship of Social Security, state law and state courts. According to the appellate judges, Arizona state courts do not have any jurisdiction to review the management of Social Security payments made to a representative payee. The proper place to challenge Edward’s use (or possible misuse) of those funds was before the Social Security Administration itself. Peace v. Peace, May 8, 2014.

The Arizona appellate court, incidentally, was very candid in its assessment of the legal principles. It noted that some state courts (not in Arizona) have decided that they do have jurisdiction over Social Security representative payees, and others have held that state courts are preempted by federal law from intervening. The Arizona opinion specifically mentions a minority opinion in a 2013 Vermont case, LaMothe v. LeBlanc, which reviewed the holdings in several states — including Alaska, Maine, North Carolina, Ohio, Iowa and Tennessee.

What is the significance of the recent Arizona holding in probate court? An analogous situation arises frequently. Suppose that a parent with a disability receives Social Security benefits, and that his or her minor child is entitled to Social Security benefits. Now suppose that a grandparent or other family member has become guardian for the child, or that a professional fiduciary has become conservator to handle a personal injury settlement. Can the Arizona probate court order the parent to turn over Social Security payments, or to prove that they were expended for the child’s benefit, or even to relinquish authority as representative payee? The Peace decision would seem to say that none of those decisions are within the purview of the probate court — the guardian’s, conservator’s or custodial parent’s dispute is with Social Security, not the state courts.

Arizona Legislative Changes Effective September 12


The Arizona legislature meets every spring, and in most years adopts changes that affect elder law attorneys, estate planners, guardians, conservators and trustees. The changes become effective nine months after the end of the legislative session, which means that late summer is the time for annual review of new laws about to become effective.

For 2013 the effective date for most new legislation will be September 12. There are a handful of changes affecting our practice area, including:

Fingerprints. The legislature decided to make it a little bit harder for most people to get appointed as guardian or conservator for a family member or other person needing assistance. It has long been the law that unrelated guardians of minors had to submit to fingerprinting; now anyone seeking a guardianship or conservatorship over an adult (related or not) can be required to undergo fingerprinting. Not every person will be required to provide official fingerprints, and it is not yet clear how the courts will implement the new law.

If the courts require fingerprinting, the change will primarily affect family members, since professional fiduciaries already have to go through a fingerprint review to get licensed in the first place. The cost is modest; probably most important for petitioners will be the half-day it usually takes to get to the fingerprinting office, wait in line and get the card. Then it will be submitted for a criminal record check.

This change continues the trend of the past several years to make court proceedings more difficult, and to discourage concerned family members from initiating protective proceedings. While the effect will probably be small, there is a cumulative shift making it more expensive and difficult to seek legal help for a failing family member. It also increases the importance of advance planning to avoid having to turn to the courts for that help.

Simplified probate proceedings for small estates. It has long been possible to avoid probate in Arizona for smaller estates. If personal property in the decedent’s name does not total more than $50,000 (and that does not include joint tenancy property, property held in a trust or property with a valid beneficiary designation) then the person entitled to the property can collect it with a simple affidavit. Even real property can be subject to a simplified probate proceeding, up to $75,000 in value.

Now both of those figures are set to increase. The personal property limit will go from $50,000 to $75,000, and the real estate limit from $75,000 to $100,000. This one will affect a small number of estates, but can save significant costs for those who fit under the increased limits. More good news: the valuation figures are for estates as of the date of collection, not the date of death. In other words, for a decedent’s estate worth more than $50,000 but less than $75,000 the best strategy will likely to be to wait another month before taking action.

Trusts created by married couples. This change is a little bit arcane, but could have broader impact than was probably intended. Many married couples establish trusts that become irrevocable (or partly irrevocable) after the death of the first spouse. Typically, those trusts permit the surviving spouse to manage the assets and, in some circumstances, to even withdraw the principal for their own use. The new law will make it a little harder for surviving spouses to legitimately withdraw money from those trusts — though another family member acting as trustee will not face the same limitations.

With the significant increase in federal estate tax exemption levels (there is currently no tax until the estate is more than $5 million in most cases), many of our clients want to eliminate irrevocable trusts set up by a now-deceased spouse when the estate tax figures were very different. This new law will make that a little more challenging, but not impossible in most cases.

Section 529 plans. Most lawyers have long assumed that money set aside for education of children and grandchildren probably was protected in bankruptcy proceedings — but the law was not explicit. It is now, at least for Arizona. If the education account is a “Section 529 plan” account, then it is not an asset of the person who set it up if they later file for bankruptcy — provided that the bankruptcy filing is at least two years after the account was set up. Incidentally, the beneficiary of a 529 Plan account is also protected in the event of bankruptcy.

It was a slow year at the legislature for those of us involved in estate planning, trust administration and elder law. That’s OK with us.

Should a Guardian Follow the Wishes of Her Ward?

We read about an interesting Washington case recently.  Raven v. DSHS, a Washington Supreme Court decision handed down on July 18, 2013, indirectly dealt with a guardian’s duty to consider the known wishes of the subject of the guardianship. If the evidence is clear that the ward would not want to be institutionalized, for instance, is it elder abuse for the guardian to keep her ward at home past the time when the state’s Adult Protective Services workers think she should be placed in a nursing home?

It’s an interesting question, and more than just academic. You can read one analysis of the case, and the facts giving rise to the case, at the newsletter/blog of Washington lawyer John S. Palmer. We hope and expect to hear more from Mr. Palmer in the future.

Mental Illness and Guardianship in Arizona

A recent blog entry from the Special Needs Alliance (two of our lawyers are members) addressed the common problems encountered when family members seek guardianship over someone with a mental illness. The very same day we received a call from a prospective client, asking if he could secure a guardianship over his mentally ill son in order to assure that his son received psychiatric care. In fact, the question comes up regularly, and the unfortunate truth is that guardianship is seldom very helpful. It seems like it should be a good solution; why then is it not?

For several reasons. Let’s start with the limitations on guardians. In Arizona, at least (we suspect but do not know that similar limits will encumber guardians in other states), a guardian may have the legal authority to place a person in a treatment facility, but not the power to chain them down. We mean that figuratively, of course. Mental health patients can leave a residential setting, can resist cooperation and can refuse to participate in treatment. A guardian may have the theoretical authority to return the patient to the care setting, but the cycle of refusal and departure would keep the treatment from being consistent.

Coupled with that is an important reality of modern psychiatric treatment: it is not usually thought of (by the professionals) as keeping the patient safe but as actively improving their mental state. In fact, most psychiatrists we have talked with insist that placement in a treatment setting for more than a few days — a week or two at most — most likely makes treatment less effective rather than more effective. The idea of “asylum” — a safe place for the incurably mentally ill to be housed indefinitely — simply has no role in modern treatment. One might reasonably argue that there should be such a place, but there is not. Put more prosaically, being someone’s guardian will not help create a place for them to stay.

A related problem: our society seriously underfunds mental health care. That means that there may not be an available program — even as an outpatient or outreach program — to treat your family member. Being his or her guardian will not make additional resources available.

Though guardianship may sometimes provide a small marginal benefit, there is another problem: the mentally ill subject of a guardianship proceeding may be very intelligent, very articulate and able to appear quite logical on at least some occasions. That means that it may be uncommonly difficult to “prove” the guardianship is necessary. Furthermore, the mentally ill subject of a guardianship is more likely to be upset, and to become uncooperative, than a person with, say, dementia.

It often seems obvious to family members: our relative is mentally ill, treatment would afford them significant benefit, and they do not understand the value of treatment precisely because of their mental illness. For better or worse (we think “better,” but we appreciate that it gets in the way of the best interests of some patients), our legal system starts from a different place. Guardianship is the state taking away the individual’s powers and transferring them to the guardian; we should not be able to take that step unless we can show that the person is not just mentally ill, but also incapable of providing their own necessities of life.

Put another way: though treatment might make a mentally ill patient happier, more productive, less disruptive and healthier in every way, our legal system will not impose that treatment unless the patient is completely unable to provide for themselves. Or, in a separate but related process, dangerous (or totally disabled).

That’s another reason guardianship so often does not work for the mentally ill. Years ago we (as a society and as a legal system) resolved to establish a “gatekeeper” approach to involuntary mental health treatment. That means that we have delegated the decision-making authority to (in Arizona’s case) medical directors of mental health treatment facilities, and we have given them sharp limits on when they can impose treatment. Generally speaking, the patient must be dangerous (either to themselves or toward others) or seriously disabled by their mental illness. And commitment to involuntary treatment does not usually involve long inpatient stays — typically, involuntary commitments include an outpatient treatment regimen of up to about a year. Guardianship may sometimes actually get in the way of that treatment cycle.

Then there are some of the practical problems arising from the population of patients with mental illness. Often those patients self-medicate — with alcohol or illegal drugs. The commitment process requires that their problem must be primarily mental illness, not drug or alcohol use. The guardianship process requires that the person be unable to make responsible decisions at the time of the hearing, and it is often easy for them to forego drugs or alcohol for the week or two before an examination, and to appear to be much better on the actual hearing date.

Speaking of drugs and alcohol, there is the related problem of treatment for the chronic abuser (who may also have mental illness — or even, after years of abuse, a dementing condition). There is effectively no involuntary treatment option for the chronic alcoholic or drug addict. Addiction programs are premised on the patient’s recognition of a problem, and so guardianship is not an effective way of getting into the treatment system.

For all of those reasons, we often discourage family members from pursuing guardianship over their mentally ill loved ones. That is not to say that it never helps; it sometimes does. But it is not the easy solution that hopeful family members are looking for.

How Much Does It Cost to Get a Guardian and/or Conservator Appointed?

We are frequently asked how much it will cost to get a guardian and/or conservator appointed for a parent or other relative. It is hard to answer with precision, but it is a fair question. Let us see if we can give you some guidance.

First, a few important assumptions. We need to be clear about this: we can’t tell you very much about what it will cost in Ohio, or California, or … you get the point. In fact, we can’t tell you with too much precision how much it will cost in Phoenix, Arizona. We practice in Tucson, and we frequently file proceedings in most of the other counties in Arizona. We do not do much in Maricopa County (Phoenix), partly because the costs and procedures are so difficult to predict there, and partly because there are plenty of lawyers who know how to do this kind of work in the big city.

Second important assumption: this is 2012. Like all our newsletters, this information will remain available on our website indefinitely. We don’t know how things might change next year, much less in a decade.

Third important assumption: that there is no wild peculiarity. If you file a guardianship petition as to your mother and she responds by filing a federal court action alleging that you are part of a conspiracy to violate her civil rights, the cost is going to go higher. Things like that don’t happen very often, but we can’t tell you that everyone will agree, that the evidence will be clear, or that the process will be smooth. So we are assuming here that there are not significant bumps in the road toward guardianship or conservatorship.

And our last assumption: we are only talking about the cost of getting you (or someone) appointed as guardian and/or conservator. You may need legal assistance after the appointment, as well (in fact, you probably will). That will depend on the complexity of your family member’s guardianship and conservatorship — and that can increase for a variety of reasons.

Enough disclaimers. How much will it cost to get a guardianship and conservatorship established?

The costs and fees are broken into several pieces. The breakdown is important, because some will be paid out of your family member’s estate, some can be waived if there is little or no money, and some will be your responsibility even if there are no assets or income from they can be paid. Here is a quick rundown:

  1. Court filing fees, certified copies and service of process (the petition and notice have to be handed to your family member by an authorized process server). Assume about $300-40o here. Most of that is the filing fee itself, which has to be paid before things get underway. It can be waived, but based on your inability to pay (in addition to your family member’s lack of resources or income).
  2. Your lawyer’s fees. If you hire a firm like us to represent you, your legal fees are likely to be $1500-2000 for an uncontested guardianship/conservatorship. This fee will be your responsibility regardless of how the proceeding turns out. It can be reimbursed from your family member’s resources if you are successful, but most lawyers will expect to be paid up front, or soon after proceedings are initiated, and not wait until you have been appointed and can get access to funds.
  3. The court-appointed lawyer’s fees. Unless your family member already has a lawyer (and you can’t select one for him or her — it would have to be someone they already had a relationship with or they hired after the proceeding began) the court will appoint an attorney to represent them. The lawyers who accept these appointments come from a rotating list, and they mostly charge their regular hourly rates. Some do more extensive investigations and pursue different lines of inquiry. The bottom line: don’t be at all surprised if the court-appointed lawyer’s bill exceeds $1,000, but that’s a pretty good maximum figure for a rule-of-thumb approximation. This one can be paid by the court itself if your family member has no resources.
  4. The court-appointed investigator. Another list of court appointees yields someone who has a social work, medical or legal background, and who is appointed to report to the court about your family member’s circumstances. The cost for that investigation and report is frequently in the range of $500-1000. As with the court-appointed attorney, these charges can be collected from the court if there are no assets available.
  5. In addition to the investigator, the court reviews a report from a medical provider. That is usually your family member’s primary care physician, but there are others who can qualify. Still, that is likely to add another $100-200 to the cost. In the real world, you will have to pay this up front to get the doctor’s opinion letter, though sometimes it might be included in a general check-up under Medicare or private insurance.
  6. Bond premiums are due if you (or someone else) are appointed conservator (of the estate). The premium for this insurance policy can be paid from your family member’s assets, and if they have no assets then it is unlikely that they need a conservator in the first place. The cost of the bond varies by the size of the estate being managed. Surety bonds can be difficult to purchase at any price, and the availability of bonding companies is often limited.

Add all that up and you can see that the cost of getting a guardian and conservator appointed will probably exceed $3,000, and can quickly grow to more like $5,000. And remember: that only gets you to the starting point. Additional costs for lawyers, accountants and court proceedings will add more to that figure over the years after your appointment. You need to be able to clearly articulate what benefit you will get from the guardianship or conservatorship to incur that kind of expense.

©2015 Fleming & Curti, PLC