Posts Tagged ‘Missouri’

Despite Guardianship, Ward May Have Capacity to Marry

MAY 2, 2011 VOLUME 18 NUMBER 16
We have written in previous installments about differing state laws regarding the ability of a guardian (of the person) or conservator (of the estate) to file a divorce proceeding “for” an incapacitated adult. The question that comes up more often from our clients is a little different, though. In its most direct form, it might be phrased like this: “if I get a guardianship over my demented mother, will that prevent her from getting married without my permission?”

The exact dimensions of the question, of course, vary with each asking. Sometimes there is familial anxiety about a late-life romance blooming in the assisted living facility or nursing home where a parent has been placed. Sometimes the concern is over a developmentally disabled 17-year-old about to acquire, at least theoretically, the legal right to make foolish decisions. Sometimes the question is focused on a particular dangerous suitor, and sometimes it is more generalized.

The short answer to the question: the mere fact of a guardianship probably will not prevent the ward from getting married, or the marriage from being determined to be valid. The level of capacity required to enter into a marriage agreement is not exactly the same as the level of capacity required to make one’s own placement or medical decisions — or even to enter into other kinds of contracts. But the facts underpinning the guardianship proceeding are likely to be the same facts utilized in any later challenge of the validity of a marriage.

Take the recent example of Christopher C. Oakley, who lives at Lamplight Village, an assisted-living facility in West Plains, Missouri. Mr. Oakley suffered a childhood traumatic brain injury in 1986, and has required supportive assistance with bathing, housekeeping and personal care ever since. His father was apparently appointed as guardian of his person in a Florida proceeding in 1995. A professional fiduciary was appointed as conservator of Mr. Oakley’s estate at the same time, and continues to manage the proceeds from settlement of a personal injury lawsuit filed in connection with the original accident.

As Mr. Oakley reached his early 20s he became involved with Melissa Warren, another resident of Lamplight Village. She, too, had a guardian and conservator — the Howell County, Missouri, Public Administrator was appointed to handle her finances, medical and placement decisions after the probate court determined that she was unable to do so herself.

In 2006 Mr. Oakley and Ms. Warren decided they wanted to get married. They each asked their respective guardians for permission, and both refused. They then had a friend drive them to a neighboring state, where they were married. Upon their return they began to live together in a shared apartment at Lamplight Village, and they identified themselves as a married couple.

The two guardians responded quite differently. The guardian for Ms. Warren (now Mrs. Oakley) did not initially approve, but sat down with the couple and discussed what they had done. The guardian decided that they really did want to get married, that they understood the emotional and financial meaning of their decision, and that the marriage should be allowed to stand. In fact, she told the judge, if the marriage was annulled she would intend to immediately file a petition to secure court approval for a new marriage.

Mr. Oakley’s guardian reacted to the news of the wedding by filing a petition to have the marriage annulled. He argued that his original Florida guardianship was based on a finding that his son was incapacitated, and that the marriage therefore was invalid in the first place. In testimony, he explained himself by asking, rhetorically: “what happens if he decides ten years from now that if somebody else — another girl comes into his life and it’s better and bigger and everything than what he had?” He also filed a Missouri guardianship proceeding, which was granted while the annulment proceeding was pending.

The judge hearing the annulment petition denied Mr. Oakley’s father the relief he sought. The fact of a Florida guardianship, reasoned the judge, did not prevent the ward from having the capacity to understand the meaning and effect of marriage. Neither did the fact that his intellectual functioning was well below “normal” intelligence, with an IQ estimated at about 70.

The Missouri Court of Appeals agreed, and allowed the marriage to stand. The burden of proving that Mr. Oakley lacked capacity to marry was on his guardian, ruled the appellate judges, and he had failed to carry that burden. The existence of a Florida guardianship was not adequately shown, and neither was the effect of that order. The evidence considered by the trial judge was sufficient to support his finding that Mr. Oakley, despite any guardianship order, understood the nature and effect of marriage well enough to enter into this most personal of contractual arrangements.

There are a number of other interesting side-issues involved in Mr. Oakley’s marriage annulment proceeding. At least, they are interesting to lawyers — everyone else might find them less bracing. One such issue: the lawyers, the trial judge and the appellate judges all agreed that Mr. Oakley’s capacity to marry should be assessed under the law of Arkansas, where the marriage took place, rather than the law of Missouri, where the couple lived and the legal action was filed. Meanwhile, Mr. Oakley’s father insisted that the law of Florida should govern the question of whether a ward automatically loses all capacity to marry upon the appointment of a guardian; that argument was lost, however, when the Missouri courts decided that he had not proven the existence of a Florida guardianship as required by Missouri law. In Re Marriage of Oakley, April 27, 2011.

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Guardian Not Personally Liable For Alleged Lack of “Due Care”

APRIL 27, 2009  VOLUME 16, NUMBER 38

Who has the obligation to get a proper Medicaid application filed for someone in a nursing home? Can the nursing home resident’s children, spouse, guardian or conservator be forced to pay for care after the patient’s money has run out but before the state Medicaid agency receives the application paperwork in proper order?

The usual answer to that question is a simple “no.” There are exceptions — a spouse may have an obligation of support, for instance, or a child may have separately promised the nursing home that the bills will be covered. The way this question most frequently comes up, though, is when a guardian or a child (and they may sometimes be the same person, though in today’s illustration the guardian was a public agency) has signed the facility’s admission documents but has not followed through with getting Medicaid eligibility established promptly.

That was essentially what happened with Eloise Selby, who resided at Arbor View Healthcare and Rehabilitation Center in St. Joseph, Missouri. Bonnie Sue Lawson, who was the Buchanan County Public Administrator, was appointed as Ms. Selby’s guardian in 2004. A Medicaid application was already pending, but the agency did not have the paperwork necessary to determine the value of two small life insurance policies owned by Ms. Selby. Her new guardian promised to get the missing forms filed.

A month later, with no paperwork in sight, the Medicaid agency denied coverage. A second application filed a month after that included the missing forms, but Ms. Selby was again denied benefits — this time because the value of the two policies exceeded the maximum permissible amount. Yet another month later, another application was filed — and denied for the same reason.

The essential problem with the application became clear at that point: someone would need to cash in the policies, and Ms. Lawson was guardian of the person but not conservator of Ms. Selby’s estate. A conservatorship proceeding was filed, the funds collected, and the final, successful Medicaid application filed a year after the initial involvement of the Public Administrator’s office.

The nursing home then sued the guardian for the fees (and legal costs) it had not collected from Ms. Selby while the failed Medicaid applications were pending. The home’s argument: while Ms. Lawson would not be personally liable for her ward’s nursing home costs in most cases, in this case she had failed to use “due care” in fulfilling her duties.

The trial court agreed, and entered a judgment in favor of the nursing home (and against the Public Administrator) for $16,779.65 — the difference between what the nursing home had collected from Ms. Selby’s income and what it would have collected. The judge also assessed attorney’s fees and costs of $6,597.00 against the Public Administrator.

The Missouri Court of Appeals disagreed, and reversed the finding in favor of the nursing home. In  the appellate court’s analysis, Ms. Lawson’s liability for Ms. Selby’s debts was limited to the money in Ms. Selby’s name. Although the admission contract included specific language requiring the Public Administrator to use “due care,” it also included a provision that dealt directly with the possibility of Medicaid eligibility denial. That more specific section limited the facility’s rights to receiving payment from Ms. Selby’s funds; the court agreed with Ms. Lawson that the specific section controlled over the more general provision. Five Star Quality Care v. Lawson, April 7, 2009.

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‘Til The Cows Come Home—A Parental Exploitation Story

APRIL 14, 2008  VOLUME 15, NUMBER 42

We see the same sad story time and again. Sometimes there are small variations, but it almost always starts the same way. Aging parents (or other relatives) need assistance with their finances and their care. As those needs increase, family members begin — often with the very best of intentions — to provide assistance but end up taking advantage. The transition from loving support to financial exploitation is tragic and common.

At least that’s the way we’d like to think Gary and Sheila Taylor of Belton, Missouri, started out. When Mr. Taylor’s father sold his home in Pennsylvania and moved in with his son and daughter-in-law, it looks like everyone thought they would be providing care for him in their home. That was what the son apparently told his two sisters, anyway.

The elder Mr. Taylor had lived in Pennsylvania all his life. His second wife became seriously ill in 1997, and daughter-in-law Sheila Taylor traveled to his home to help out. He signed a new power of attorney naming Sheila as his agent. He added her name to two of his bank accounts in Pennsylvania. When his wife died, he and his son and daughter-in-law agreed it would be better if he moved to Missouri with them.

A few months later, bank accounts in Missouri bore father, son and daughter-in-law’s names. Gary and his father sent $10,000 checks to each of Gary’s sisters, with a note indicating that Mr. Taylor was trying to avoid the probate process. Then the elder Mr. Taylor suffered a stroke, and his care needs escalated.

While Mr. Taylor was still recuperating from his stroke, Sheila wrote a $7,100 check to pay off a credit card in her and Gary’s name. Then she and Gary decided to purchase a farm property and to build a new house on the property that would allow Mr. Taylor to move in. Mr. Taylor’s money paid for the property and construction — and also for a tractor, a utility vehicle and a herd of cows. All were in Gary and Sheila’s names, with no mention of Mr. Taylor’s contribution. Not too long thereafter, Gary and Sheila Taylor did some ironic estate planning of their own, transferring “their” assets into a revocable living trust.

Mr. Taylor ended up living on the farm he had purchased for about six months before going to a nursing home. When he died a few months later, there were no assets left in his name to go through the probate process. Almost $400,000 of money that had once belonged to him had gone into the farm, house, equipment and cows titled in Gary and Sheila’s revocable living trust. Mr. Taylor’s daughters sued, and argued that they should be entitled to a portion of the farm — and even of the cattle herd.

The Missouri Court of Appeals agreed. The appellate judges explained the legal notion of a “constructive trust”—and then ordered that the trial court conduct a new hearing to determine how much of the property belonged to Mr. Taylor’s daughters. Taylor-McDonald vs. Taylor, January 10, 2008.

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Arizona Legislature Changes Format For Beneficiary Deed

APRIL 3, 2006  VOLUME 13, NUMBER 40

Five years ago the Arizona Legislature adopted an interesting new law. Modeled on a similar law in Missouri, the “beneficiary deed” statute permitted property owners to designate who would receive their property on death—much like a “payable on death” bank account. Now the state legislature has revisited beneficiary deeds, and made them even more flexible and useful.

One unanswered problem arose a handful of times under the previous law. What would happen if a person named to receive property by a beneficiary deed died before the original property owner? If, for example, a parent signed a beneficiary deed to “my two children, John and Mary,” and Mary died before the parent leaving children of her own, did that mean that her children would receive her share, or that son John would own the entire property on the parent’s death?

Effective this fall (the date is not yet set and won’t be known until the legislature adjourns) beneficiary deeds can solve that problem. Under a law signed by Governor Napolitano on March 24, 2006, all new beneficiary deeds must include a paragraph indicating which of two choices the owner prefers. The language required by the new law:

If a grantee beneficiary predeceases the owner, the conveyance to that grantee beneficiary shall either (choose one):

[] Become null and void.

[] Become part of the estate of the grantee beneficiary.

There are still a number of important issues to remember in the use of beneficiary deeds, and it will not be appropriate in every case to use this approach to transfer property. With some of the following limitations in mind, however, it may be that the beneficiary deed is a simple, inexpensive and useful method to avoid probate, especially in small estates. Among the remaining limitations for beneficiary deeds:

  • They are not available in every state. As of this writing, only Arizona, Arkansas, Colorado, Kansas, Missouri, Nevada, New Mexico and Ohio permit the use of beneficiary deeds.
  • An individual using a beneficiary deed will need to coordinate his or her estate plan as to multiple assets—it may, for instance, be necessary to keep track of beneficiary designations on multiple properties, several bank accounts, and a number of insurance policies and brokerage accounts. Anyone with more than a handful of assets should probably consider a living trust instead.
  • A beneficiary deed can be changed by a surviving owner, so in the case of a husband and wife (for example), the final distribution is not set until the second death.
  • The beneficiary deed provides no estate tax planning benefits for larger estates.

And what about individuals who signed an Arizona beneficiary deed before the new law was passed? Nothing in the law requires them to change their deeds, but they would be well-advised to consider updating the language to clarify what would happen if a beneficiary died before them. For those who might sign a beneficiary deed between now and the effective date, the best approach is less clear. Both the existing law and the new version require that beneficiary deeds be “substantially in the following form”—and then the form changes. Our advice: if you plan on signing an Arizona beneficiary deed in the next few months, expect to sign an updated version this fall.

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