Posts Tagged ‘visitation’

Special Needs Trust Pays Substantial Legal Fees in Dispute

SEPTEMBER 26, 2016 VOLUME 23 NUMBER 36
Questions often arise about what kinds of payments may, or should, be made from a trust. When the trust is a “special needs” trust, the questions sometimes can be even more pointed — the purpose of a special needs trust, after all, is usually to provide for supplemental needs not available from other sources. As in almost every trust case, there are questions about whether trust expenditures improperly favor one beneficiary over the interests of others; in many special needs trusts, the question is compounded by trying to assess the protection due to the state Medicaid agency, since it is often entitled to repayment from the trust on the death of the primary beneficiary.

All of that, though, is hard to analyze — until a specific trust distribution is at issue. To help review the considerations we might look at a recent case out of South Carolina, in which a special needs trustee’s payment of legal fees has come into question.

Alexis Davis (not her real name) presents a tragic story. In 2006 she delivered triplets (after she and her husband had tried to have children for several years). During the delivery, however, she was catastrophically injured; she remains unable to move or speak, and communicates primarily by blinking.

Alexis’ husband and parents cooperated in filing a lawsuit against the hospital where she was treated, and a settlement was negotiated. A special needs trust was established to handle the settlement proceeds, and it was funded with an initial amount of almost $1 million, plus monthly income payments of over $30,000. Alexis’ mother and father were named as trustees of her special needs trust, and as guardians of her person and conservators of her estate.

After the settlement, Alexis’ husband announced that he wanted to pursue a divorce. In response, her parents filed a divorce proceeding on her behalf, and sought visitation between her and her triplets.

All of the legal proceedings took place in California, where the couple had lived together and the triplets were born. For a time, Alexis’ parents moved to California to help take care of her, and to have her remain close to her family. As the divorce proceeded, however, they moved her back to South Carolina to take care of her at home.

Over almost a decade, legal battles proceeded over the visitation issue. Alexis’ legal position was directed by her parents, acting as co-trustees and as co-guardians. The legal costs were paid from her trust.

Meanwhile, legal fees mounted. Alexis’ ex-husband eventually filed an action in South Carolina to try to prevent Alexis’ parents from paying those costs from her trust. He brought his action against them as trustees but did not name Alexis herself as a party. His request was made on behalf of the triplets, arguing that their interests in the trust were being compromised by the legal expenses.

In response Alexis’ parents asked the South Carolina court to expressly approve legal fees they had paid totaling $495,326.75. They also asked that the trust be modified to make it clear that they could pay legal fees without prior court approval. The court appointed a guardian ad litem (a local lawyer) to represent the triplets’ interests in the trust. The court also appointed another local attorney to act as Alexis’ guardian ad litem, and a third as attorney for Alexis.

Midway through the court proceedings (after several days of trial and after Alexis’ ex-husband finished his presentation) the judge formally amended the petitions to make clear that Alexis herself was a party. Because the allotted time was up, the court continued the whole proceeding for a new date; it was set to start up again several months later. Meanwhile, the judge who had heard the first part of the proceedings lost her reelection bid, and Alexis’ ex-husband appealed the order adding her as a party.

Meanwhile, the first appeal resulted in an order denying Alexis’ ex-husband’s objections, and he appealed to the next level of court — South Carolina’s Court of Appeals. That appellate court agreed with both of the lower courts which had considered the questions, approving the addition of Alexis as a party, the appointment of a guardian ad litem and an attorney to represent her, and the course of the litigation up to that point. Dorn v. Cohen, August 3, 2016.

Are you confused yet? We know we are — and we speak the arcane language of appeals and legalisms regarding trusts and guardianship. But that’s not really our point. Instead, we think that Alexis’ case illustrates an important issue.

The key dispute involved here centers around legal fees of almost $500,000. Since that bill was incurred, the dispute moved to another state, three different attorneys have been appointed to be involved in the case, and a multi-day trial has been conducted — and yet the issues are far from resolved. With the change of judge, it seems safe to suggest that there will eventually be several more days of court proceedings, and more legal wrangling just to get to that point. Meanwhile, the underlying fight — over visitation between Alexis and the triplets — was actually resolved (according to news reports) five years ago. The resolution sounds imminently sensible, and it may even be going well.

Our point is that legal proceedings can sometimes lose their connection to reasonable grounding. From Alexis’ parents’ perspective, they have by this time incurred legal fees that are probably two or three times the original reported bill — and they could conceivably be instructed to pay those fees from their own pockets. On the other side, unknown fees and costs have been incurred by Alexis’ ex-husband. Presumably, all the legal costs will eventually be borne by the triplets, since their inheritances (from their father, their mother’s trust and even their grandparents) will have been significantly reduced.

Does this mean that it is dangerous to even act as trustee of a special needs trust (or, for that matter, of any trust)? No. This level of dispute is extremely unusual. But the story is still a cautionary one.

 

Court Orders Weekly Visitation for Grandmother of Child

NOVEMBER 30, 2015 VOLUME 22 NUMBER 44

When Mary Lansing (not her real name) gave birth to a daughter in August, 2013, her boyfriend (and the father of her daughter) was already in prison. Four months later, she filed a paternity action naming her boyfriend, and sought a court order granting her sole legal decision making authority and child support.

Her boyfriend’s mother Louise filed a motion to intervene in the paternity action. She asked for a court order giving her regular visitation with her granddaughter. Because Mary had expressed concerns about Louise, and the baby’s father had expressed concerns about Mary, the court appointed what is called a “Court Appointed Advisor” to investigate and report.

A Court Appointed Advisor (let’s call them “CAA”) is a professional, usually trained in mental health or appropriate social services. The court actually has the option of appointing an attorney to represent the child’s wishes (though that wouldn’t have made sense in this case, since the child is still just a little older than two), or an attorney to represent the child’s best interests, or a CAA.

The logic of the CAA appointment makes sense. This professional can visit the home where the child lives, the home where visitation or shared custody might be carried out, and interview all the players. The CAA then becomes a witness — an expert witness, in fact, and (in a sense) the court’s own expert witness. This might help the judge get to the bottom of the dispute more readily.

In this case, the CAA prepared a written report and testified at a temporary visitation hearing. After that hearing, the judge ordered that Louise would have one three-and-a-half hour visitation session (unsupervised) with her granddaughter every Sunday.

Mary appealed the order, arguing that the judge had failed to give sufficient consideration to her basic right to control who would have access to her daughter. She also objected to the judge’s reliance on the CAA report, and to the failure to order Louise to pay her attorney’s fees.

The appellate court upheld the trial judge’s rulings on each issue. It was appropriate to rely on the CAA’s recommendations, said the Court of Appeals; there was no evidence that the judge failed to make his own decision about the child’s best interests. Merely because many of the CAA’s recommendations were adopted, it does not follow that the judge improperly “delegated” his decision-making role.

A large part of the trial judge’s ruling relied on the obvious animosity between Mary and her ex-boyfriend’s earlier girlfriend, the mother of his first child. The fact that Louise indicated a desire to let her two granddaughters (and half-sisters) get to know one another should not prevent her involvement in the child’s life.

One other point made by the trial judge (and approved by the Court of Appeals): the amount of intrusion on Mary’s parenting was very limited. A single weekly session for just a few hours should not be seen as much imposition. Mary’s objections, though not irrelevant, should not preclude Louise’s ability to maintain at least some slight contact with her granddaughter.

On the subject of attorney’s fees, the trial judge had noted that Mary’s behavior in the court proceedings was “abusive and unnecessary.” Based on that, and on the fact that Louise was successful in securing a visitation order, the trial judge had refused to order Louise to pay any portion of Mary’s attorney fees.

On the other hand, the trial judge had declined to order Mary to pay any of Louise’s fees — not because she should not have to pay, but because she had no assets from which to pay. The Court of Appeals explicitly approved the trial judge’s handling of the attorney fee issue. Lambertus v. Day-Strange, November 19, 2015.

There are few (perhaps surprisingly few) Arizona appellate cases about grandparents’ visitation rights. Most of the cases that are decided at the appellate level are “memorandum” decisions — meaning that they are not supposed to be cited as precedent in later cases, though they do represent the appellate judges’ thinking on the issue. Mary and Louise’s dispute was resolved in just such a memorandum decision.

Imagine that you are having a dispute with the mother (or father) of your grandchild, and that you want to seek a court mandate that you have visitation rights. Assuming that your dispute is in Arizona, what does this case tell you about your chance of success, or alternative approaches you ought to consider? (If your dispute is not in Arizona, do not take this case or anything we write here as indication of a single thing about your dispute — talk to a lawyer in your state.)

Probably not a lot. Each grandparent visitation case will be dependent on its own facts, and the collection of evidence (and its presentation in court) can make facts difficult to pin down with clarity. The process can be cumbersome and expensive, and bad interpersonal relationships are unlikely to improve in the course of litigation.

Probably the best take-away from Mary and Louise’s legal dispute is that you should start by reading the Arizona statute on grandparent visitation (look particularly at subsection C for visitation). It is important to understand that the statute does not tell you that if you meet the basic standards you will be entitled to a visitation order. Instead, the statute is a threshold issue: if your case does not meet one of the four criteria for a visitation proceeding, there is no recourse under the statute at all.

Custody of Grandchild Requires Court Consideration of Best Interests

AUGUST 19, 2013 VOLUME 20 NUMBER 31

National Grandparents Day is September 8th this year. That should serve as a reminder for us to consider changing demographics: grandparents (and great-grandparents) are living longer, and increasingly fractured families are changing our expectations and default assumptions about caring for children.

More grandchildren are being raised by their grandparents every year. In fact, researchers (and U.S. Census Bureau statistics) indicate that about 7% of children are now living in households headed by a grandparent; that is more than double the 3% figure of 1970. That trend appears to have been accelerated by patterns of drug use by parents and by recent economic troubles.

It should be no surprise that problems and conflict between parents and grandparents should also be on the rise, and that the legal system would be involved. A recent Arizona Court of Appeals case illustrates some of the legal principles, and demonstrates how seniors can be involved in caretaking for their grandchildren.

David Brandon (not his real name) is the father of young Ricky; David’s wife (and Ricky’s mother) died shortly after Ricky was born. When Ricky was not quite two years old, his maternal grandmother and aunt (Kathy and Alicia) filed a petition with the Court seeking custody of Ricky.

Kathy and Alicia alleged that Ricky had lived with them since he was two months old, and that David had infrequent contact with him. Grandmother and aunt sought a ruling from the judge that they were “in loco parentis,” (literally “in place of a parent“) with little Ricky. The significance of such a ruling: if the court found that Kathy and Alicia were in loco parentis, under Arizona law they could be given partial or even exclusive custody of the child.

The court conducted hearings over several days. The testimony was contradictory; several witnesses testified for Kathy and Alicia that they were the primary caretakers for Ricky, and several other witnesses swore that David was raising his son without their help. The judge could not decide who was telling the truth, and decided to leave a temporary custody order in place, giving aunt Alicia primary custody for the time being.

David appealed (technically, he filed a “special action,” since there had not been a final order in the custody dispute — but we digress). The Court of Appeals looked at the record and court rulings, and found that the trial judge had failed to complete his responsibility. He had not received testimony on, nor made any findings about, what would be in Ricky’s best interest. The Court returned the matter to the trial judge with instructions to make findings about what would be best for Ricky. Barkley v. Blomo, August 6, 2013.

Strategically this outcome probably favors David, Ricky’s father. That assertion is not based on any knowledge about him or his caretaking abilities; there is a presumption in Arizona law that a child’s best interests are usually served by being raised by parents. That means that Kathy and Alicia will have the burden of proving that continued custody (or shared custody, or visitation) would be in Ricky’s best interests.

We have written from time to time about grandparent custody and visitation proceedings. The legal trend has run counter to the demographic trend: even as the frequency of grandparent custody has increased in recent years, the legal standards have tightened, making it more difficult to secure court approval for those arrangements.

Probate Judge Sets Visitation Schedule in Minor Guardianship

DECEMBER 5, 2011 VOLUME 18 NUMBER 41
Most of the guardianship issues we deal with at Fleming & Curti, PLC, involve adults who have limited capacity or special needs. Sometimes, though, the subjects of a guardianship proceeding are minors; that can bring unique issues to the process.

There are a few legal principles that govern guardianship of minors:

  1. Minors are by definition “incompetent” under the law. In other words, they can not enter into binding contracts, they can not make enforceable decisions about their own living arrangements and health care (though “emancipated” minors may be different, and special exceptions may apply to the broad principle laid out here).
  2. Parents are the “natural guardians” of their minor children. That means they do not need court involvement to take responsibility for and control of their children’s care.
  3. Disputes between parents (usually, but not always, after they are divorced) about upbringing, care, education and living arrangements can be resolved in court — but the court involved is usually the domestic relations (sometimes called divorce or family) court.
  4. When parents are unfit, the decisions about placement, care, education and visitation are likely to be handled by a different branch of court, usually called juvenile court.
  5. Guardianship of minors is not uncommon, but in Arizona (as in most states) it is only appropriate when there is no parent available to exercise parental control. Of the three types court proceedings dealing with minors (juvenile, domestic and guardianship), the guardianship process is the least-used and usually the least-important.

Every generalization has its limitations, of course (presumably including this one, but that’s a philosophical issue for another day). Guardianship proceedings can and do exist for minors, and significant legal and family issues can and do get resolved in the guardianship context. Consider the case of the Smith/Lowrance/Wallace family in Arkansas.

In 2005 Timothy Wallace shot and killed his wife Brandy and a friend. Although he fled the United States after being released on bail, he has been returned, tried, and sentenced to two life terms. The death of Brandy Wallace and the incarceration of her husband meant that the couple’s three minor children, identified in court papers as “ZW,” “MW” and “CW,” had no parents available to raise them.

Three family members stepped forward to assert their priorities. Brandy Wallace’s mother (Janet Smith) and brother (Brian Lowrance, along with his wife Anna Lowrance), and a half-sister each argued that they should be appointed guardian for the three children. The court initially appointed Ms. Smith and the Lowrances together; after a later agreement and hearing, the Lowrances were appointed as permanent guardians and Ms. Smith was given a right to reasonable visitation with her grandchildren.

For several years the parties worked out a visitation schedule without too much conflict. In early 2010, though, Mr. and Mrs. Lowrance decided to limit Ms. Smith’s visitation; they required that all her visits with her grandchildren had to be supervised by one of them, and they cut off any overnight visits. Ms. Smith asked the probate judge (in Arkansas, as in Arizona, minor guardianships are handled in the probate court) to order the Lowrances to return to the earlier and more generous visitation schedule.

After a hearing the probate judge scolded both parties. He chastised the Lowrances for modifying the visitation arrangements unilaterally, and told Ms. Smith that she would have to find transportation to visit her grandchildren or give up visitation. Then he ordered a specific visitation schedule, similar to the kind that divorced couples sometimes see when the courts attempt to regulate the behavior of parents who can not work out visitation on their own initiative.

Mr. and Mrs. Lowrance appealed the imposition of a specific visitation schedule. They argued that they had done nothing wrong, and that they had just been protecting the children from a dangerous situation. They pointed out that Ms. Smith had allowed two of the children, then aged eleven and seven, to operate a “chainsaw.” While Ms. Smith acknowledged that she had allowed the two to operate a battery-operated saw, she agreed not to permit them to use any power tools in the future, and the probate judge had entered an order to that effect.

The Arkansas Court of Appeals agreed with the probate judge that, given the disagreements and the parties’ inability to work out their differences, a specific visitation schedule was in order. Although the relationship of Ms. Smith to the children is not the same as a parental relationship, the appellate judges ruled that the goal in a guardianship action should be the same as in domestic relations proceedings: serving the best interests of the minor children. Given the history of disagreement and litigation, the probate judge’s order “achieved the best interests of the children by fostering continued relationships, by eliminating continued litigation, and by crafting visits to fit with the children’s busy lives.” Lowrance v. Smith, 2011 Ark. App. 725 (November 30, 2011).

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