Adult Guardianships for the Elderly

Adult guardianships are more common today as the so-called Baby Boomer generation ages. Yet, in our free society, one adult does not legally control another without a compelling reason.

Adult Guardianships

Michigan’s probate code provides for adult guardianships under the proper set of circumstances. But what happens when the guardian abuses the protected individual?

Over the weekend, we noted with interest an article on this topic in the Sunday NYT. The article highlights a woman who spent thousands of dollars and years of effort attempting to wrestle her father’s guardianship from a financially abusive significant other.

The unmarried couple lived in Las Vegas; where else. They were together for many years. Sadly, the man eventually exhibited signs of dementia.

Eventually, the companion told the daughter she could no longer provide adequate assistance. But when the daughter arrived to collect her father, the companion blocked the daughter using her guardianship authority. We have seen this dynamic in many cases here in Oakland, Wayne, Genesee and Macomb counties.

Upon obtaining guardianship, the female companion inserted herself into the man’s bank account, removing over $200,000. Eventually, this disbursement resulted in a criminal conviction.

Records unearthed by the man’s daughter -his only child- showed the companion racked-up thousands of dollars in gambling debts. The daughter was devastated by the probate judge’s ruling -after 12-days of trial- to continue the companion’s adult guardianship.

Pattern of Elder Abuse

The case follows a pattern of exploitation for the elderly or mentally incapacitated. Misplaced trust in a romantic companion or friend often has grave financial consequences.

As is typical is such cases of elder abuse, the companion restricted daughter’s access to her father. In one incident, the daughter racked-up over $2500 in legal fees simply to broker a dinner with her father.

One way the daughter could avoid this scenario is to take an early proactive role in her father’s affairs. By law, notice of an adult guardianship proceeding must be provided to the adult children of an allegedly incapacitated individual.

For whatever reason, the daughter did not initially object to the guardianship proceeding. She came to regret that decision.

Best Practices

From the probate judge’s perspective, a big red flag is family member indifference to the initial guardianship petition.  The best time to object is at the outset of the probate court proceedings.

Adult guardianships are controlled by statute here in Michigan. An entire chapter of the Estates and Protected Individuals Code [EPIC]  -our probate code- addresses adult guardianships.

Because having such control over an adult is disfavored under the laws of our free society, EPIC deploys several safeguards. Before a guardianship is established, a Guardian Ad Litem investigates the petition, interviews the allegedly incapacitated individual, and reports to the probate judge.

Also, a hearing is conducted where all interested parties have an opportunity to be heard. If the probate judge finds, by clear and convincing evidence, that a person is incapable of taking care of their own affairs, the guardianship is often granted.

Once granted, the guardian must visit their ward at least once per quarter and file an annual report. If problems arise, then interested persons can file petitions addressing their concerns.

By statute, the probate court orders a guardianship review on its first anniversary, and then every five years thereafter.

Prevent Disruption of Healthy Family Relationships

In the Las Vegas case, the adult guardianship completely disrupted the father-daughter relationship. The guardianship was a legal barrier to any ongoing relationship with her father.

This case is heart-breaking. Adult guardianships do not have to unfold like this.

We have seen many cases where the fiduciary, whether a guardian, conservator or trustee, abuses the ward’s finances or physical condition. Usually, but not always, the probate court addresses such issues. That can only happen, however, when a judge is aware of the problem. Only the enumerated interested parties can bring an issue before the court.

When serving as a guardian, best practices include maintaining accurate financial records, documenting all medical treatments, and frequent ward visits.

We Can Help With Adult Guardianships

If you have concerns about an adult guardianship, contact our office to schedule a free consultation. Our law firm has experience with these and other probate matters.

Oakland County Lawyers

Facebooktwittergoogle_plusredditpinterestlinkedinmail

‘Homes for the Aged’ Get a Few Dozen Liquor Licenses

This post examines new legislation that calls for the issuance of limited liquor licenses for certain ‘homes for the aged’. These are licensed facilities restricted to residents over the age of 62.

Should the aged have easy access to liquor? Some consider drinking alcohol on a consistent basis is a compassionate way to treat the elderly; others see it as irresponsible.

Just before the Christmas break, Governor Snyder signed PA 328, which provides for limited liquor licenses -a total of 25- in homes for the aged. Owners of licensed facilities that meet requirements of the new statute are candidates to receive one of the available  licenses.

Why shouldn’t the elderly be able to imbibe alcoholic beverages? This is a very progressive piece of legislation that provides for the compassionate care and comfort to our aging population.

The 25-license limit, however, seems arbitrary and capricious. There are 83 counties here in Michigan; that’s one license for every 3.35 counties; demand will outstrip supply. A liquor license could drive-up the cost of housing in the select few homes that acquire a license.

This limited licensure is  known as a competitive licensing system. Given the limited number of licenses, the state will be able to select from the best of the applications; the cream of the crop.

Only the elderly with means would then be able to attain this compassionate care provision. Drinking among rich elderly residents in assisted living facilities has been identified as a problem in many affluent areas in Michigan.

Perhaps, when the commission created to study the select facilities completes its mandate, the legislature will see fit to expand the number of limited liquor licenses in the ever-ubiquitous ‘homes for the aged’.

If you own a licensed facility, consider retaining competent counsel for the application process. Getting in on the ground floor could be important if this social experiment goes well.

Oakland County Lawyers

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Author Tom Clancy’s Estate Litigation Finally Concludes

Estate administration and trust litigation too often go hand-in-hand. This post explores the importance of proper estate planning.

Back in November 2014, we noticed an interesting article in the Wall Street Journal regarding the estate administration and resulting litigation of best-selling author, Tom Clancy. Mr. Clancy’s estate consisted of a family trust which designated his widow as the primary beneficiary; a separate trust awarded assets to his four children from a prior marriage.

Among the items in the sizable estate were a 12% stake of the Baltimore Orioles, a Chesapeake Bay home, six penthouse condominiums on Baltimore’s harbor, 26 collectible handguns and long guns, and even a rare World War II tank.

A dispute arose when Clancy’s widow claimed the decedent’s estate should not be liable for millions in estate taxes. Ms. Clancy claimed that it was Mr. Clancy’s intent that the children’s trust pay all estate taxes. Mr. Clancy’s children disagreed; they asserted the tax liability should be split evenly between both trusts.

That dispute, which lasted nearly two years, recently resolved with a Maryland Court of Appeals ruling. The appellate court held that the widow’s trust was not liable for any taxes. The court further ruled that all of the $11.8 million dollar tax bill was to be paid from the $28.5 million children’s trust.

Probate Judge Lewyn Scott Garrett had determined Ms. Clancy’s inheritance should be entirely tax free. Specifically, the judge pointed to language that he claimed offered the clearest and most predominant evidence of Mr. Clancy’s intent.

This case is a prime example of the importance of having a properly executed estate plan in place. Even Tom Clancy, an author whose estate was worth an excess of $83 million, didn’t have a plan in place that would keep his estate free from litigation.

Although his estate plan involved a complicated series of trusts, the language was sufficiently imprecise to precipitate probate court litigation. The case points to the importance to be clear in all estate planning documents relative to the intent of the settlor(s) or grantor(s) of the trust package.

In this particular instance, lack of precise trust language addressing the estate tax issues caused a dispute that could have been avoided. By not having this language, the estate went to litigation. This likely resulted in tens of thousands of dollars in unnecessary attorney and court fees. Further, it also caused nearly two years of needless stress for members of the family.

Mr. Clancy’s case demonstrates that a proper estate plan avoids disputes between common adversaries: a decedent’s children and a subsequent spouse. Mr. Clancy, with his trust package, died thinking he has a solid estate plan. Unfortunately, despite his detailed planning, his lawyers missed the tax issue.

We Can Help

Because the corpus and circumstances of a trust and its beneficiaries change over time, the constant diligence of a skilled estate planning lawyer is essential.

Our law firm offers free consultations to evaluate your estate plan. If you would like to explore your estate planning options, contact us to schedule an evaluation.

Oakland County Lawyers

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Digital Estate Plans in Michigan

In the modern era, most people have dozens of electronic accounts making-up an electronic profile and creating a digital estate. What happens to your digital assets on death, or upon your incapacity? Do you have a digital estate plan?

The New Act

Earlier this summer, the Michigan legislature addressed these questions when passing the Fiduciary Access to Digital Assets Act; an act closely modeled on a well-thought-out uniform act.

In this digital age, our personal, business and financial activities are stored and maintained electronically, each with online access. We shop, bank, invest and pay bills online; we keep up with family and friends, and transmit communications online; family photos and important documents are stored in the cloud.  These electronic accounts make-up a person’s digital estate.

Digital Custodians

Digital custodians typically are companies that store your electronic data. Examples are Google, Facebook, banks, and financial institutions.

Under the new law, four categories of people can legally request access to the information held by the digital custodian(s) of your accounts. These include: a power of attorney, personal representative, trustee or conservator.

These custodians control access your digital assets in the event of your incapacity or death.  Problem: how do family member access financial information, tax returns, or treasured photos when digital custodians refuse access to your accounts?

Some digital custodians offer an online tool that would allow users to direct the custodian to disclose the user’s digital assets to a selected individual.  Until recently, short of giving a list of all of your online accounts together with passwords to the selected individual, this online tool was the only way to insure that family members or other designated individual would have access to your digital assets when necessary.

Directing Your Digital Assets

Digital asset direction using an online tool still overrides a user’s directions to the contrary in a written document. Under the new statute, a user may now direct a designated digital custodian to disclose some or all of the user’s digital assets to a fiduciary through a will, trust, or power of attorney.

Thus, while the new act allows a fiduciary to direct the digital custodian to terminate the user’s account, it does not expand or provide any new rights to the fiduciary. Nor does the act change the rights of the digital custodian or user under the terms-of-service agreement. To obtain your digital asset content, your fiduciary must supply the digital custodian with a written disclosure request and a copy of the fiduciary’s authority.

The act gives the fiduciary the same rights to digital assets as the owner. However, a fiduciary cannot impersonate the owner.  The digital fiduciary has the same duties to manage your digital assets as a fiduciary managing your tangible estate.

Get a Digital Estate Plan

Contact our office for a free consultation on how to include your electronic assets in your digital estate plan.

Oakland County Lawyers

 

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Physician Orders for Life Sustaining Treatment – POLST

POLST is an end-of-life planning approach or outlook that emphasizes a dying or critically ill patient’s preference relative to the type of care they receive. The movement is sweeping the country and is currently under active consideration by the Michigan Legislature.

POLST utilizes a medical order that states the patient’s wishes for treatment. Without the executed order, paramedics and physicians are required to provide all available forms of medical treatment. With the completed form, physicians must follow the patient’s advanced directive.

The POLST form assures patients that their health care providers will provide only those treatments and procedures authorized in advance. The form is designed to reduce irreversible medical errors that often occur in heated moments of acute medical trauma.

Only patients with serious and mostly terminal health conditions should consider executing a POLST order. One rule-of-thumb used to determine whether a POLST order is appropriate is whether the patient is expected to survive for one year or less.

For patients that are healthy, other estate planning tools are available such as an advanced directive, a health care power of attorney, or even a guardianship.

If you or a family member need to review your estate plan, contact our office to schedule a free consultation.

Oakland County Lawyers

 

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Grandparents Raising Grandchildren Because of Drugs

Several websites have cropped-up devoted to grandparents placed in the tough and unenviable position of raising their grandchildren because their own children are incapable of doing so due to drug addiction.

Here is a sample of these websites:

Grandparents raising grandchildren these days often has a heroin addiction component to the story. No longer can we ignore the surge in heroin use among young addicts in the suburbs across the nation.

Between 2000 and 2014, the NYT reports an 8% increase in the number of households where a grandparent is raising their grandchild. There is a high correlation between these 2.6 million households and drug addiction.

Once addicted, all of the good intentions, interventions and other assistance of the families is useless unless the addict truly desires to change. Many of these young parents never make it, either dying or getting incarcerated for escalating crimes, and leaving the grandparents to raise the children.

The mechanism for making the grandparents legally responsible for their grandchildren is a minor guardianship. The downside to such an arrangement is that it is not necessarily designed to be a permanent arrangement; a biological parent in Michigan can petition to terminate the Grandparent guardianship at any time.

While such a petition does not mean a probate judge will automatically grant the relief requested, such petitions tend to disturb the tranquility and security of the child’s world with court hearings and their attendant uncertainty.

If you or a family member are facing a difficult situation involving grandchildren or minor guardianships, give our office a call to review your options in a free consultation.

cl.logo.hd

Facebooktwittergoogle_plusredditpinterestlinkedinmail

What is a Funeral Representative?

This post introduces the reader to a funeral representative; a new type of fiduciary recently created by statute.

If you die, who is responsible for making your funeral arrangements and final disposition decisions? Do your loved ones know what your wishes are upon your death, and will those wishes be honored?

Typically, the next-of-kin are responsible for funeral arrangements and the disposition of a decedent’s body. Family members face burial decisions: whether to cremate remains; whether to bury the remains; and how much money to spend.

Next-of-Kin

The law dictates the order of priority for the next-of-kin, beginning with the surviving spouse. Unfortunately, this can be problematic and the decision-making process quickly becomes complicated. For example, the next-of-kin may be an individual who may not agree with the decedent’s plans; or the next-of-kin may be estranged from the decedent.

Often the person closest to the decedent is a more distant relative or not a relative at all, such as a life partner or friendly neighbor, with no legal authority to make any such decisions.

Funeral Representative Law

On March 29, 2016, a probate bill was signed into law to attempt to address this situation. This new law created the “Funeral Representative”.

The new law allows individuals to designate a fiduciary as their Funeral Representative. This fiduciary makes arrangements for the disposition of the decedent’s remains, woks with the funeral home and pays funeral-related invoices.

A designated Funeral Representative will have priority over other persons including a spouse, children, and parents.  The purpose of a Funeral Representative is to help prevent disputes among loved ones and to provide more clarity as to who will be responsible for funeral arrangements and final disposition decisions.

Put it in Writing

A Funeral Representative designation can be an important part of your estate plan. Consider adding a Funeral Representative designation if you think your relatives will disagree or otherwise not carry out your wishes; if you have estranged relatives; if you do not have any living relatives; or if the closest person(s) to you are simply friends or neighbors with no real legal status.

The Funeral Representative designation must be in writing and in proper legal form to be valid.  The nominated fiduciary may accept the designation in writing or by acting as the Funeral Representative.

Give us a Call

To designate a funeral representative, call our firm to schedule a free consultation. It only takes one call to start the probate process.

Oakland County Lawyers

 

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Frugality Hurts Credit Score for Elderly

Last week, we came across an article in the Sunday NYT Business section about an elderly individual whose practiced frugality damaged his credit score. It turns out, if you do not need or use much credit, your overall credit score suffers.

The 63-year old saw a classic car he liked at a “one-day-only” price. He had plenty of cash in the bank but did not have his checkbook.

The car dealer offered him a car loan at a mere 2.9% interest. But when this man completed the application and the dealer ran his credit, the credit bureaus had never heard of him because, for years, he did have any open accounts.

That included his home mortgage which he dutifully paid-off 10-years earlier. The reward for his frugality: if he wanted the car, he would have to pay 7% interest on the car loan.

When you manage your finances well enough to avoid using much credit, you don’t have sufficient data to generate a credit score. Combine that with a retiree’s usually lower income, and lenders view you as a poor credit risk.

AARP reports that the notion that retirees no longer require credit is a myth. Many retirees seek mortgages to downsize their residences, or may have lingering credit card balances from the recession.

One tactic is to maintain one credit card, make occasional purchases, and pay the bill timely each month. Another tip is to develop a line of credit prior to retirement, when your income is generally higher.

The best general rule is to always use credit wisely and responsibly. Keep your lines of credit open while you are working, even if you don’t need it because, someday you may want to tap some credit and you will want to have it available.

cl.logo.hd

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Estate Planning Attorney Cannot Name Himself as Beneficiary

Last weekend, we noticed an article in the Detroit Free Press about one of our colleagues from Troy, MI who got into some hot water relative to his estate planning practice.  He had a long-time family friend who was wealthly; the attorney assisted in his wealthy friend’s estate plan.

During the process of the drafting of the estate plan, this wealthy individual, and good friend of the attorney, named his attorney friend as a beneficiary in the trust that was being prepared. The trust was funded with well over twenty million dollars, of which the attorney was to receive $17 million.

Wow; if the attorney outlived his good friend, which he did, he set himself up for a huge payday. Problem: there is a an rule of professional conduct that forbids an attorney from naming himself as a beneficiary under any estate plan that he drafts unless he is a member of the client’s family.

The decedent in this case did have heirs at law; they sued the estate planning attorney. The matter was litigated and the probate judge disallowed the transfer to the attorney.

Now the matter is on appeal to the Michigan Court of Appeals; oral argument was conducted a few weeks ago and a decision is expected soon. We will track this case as we are very interested in knowing how the Court of Appeals will treat what this attorney did.

Ethics matter. When hiring an estate planning attorney, be sure to check their background.

Clarkston Legal

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Godfather of Soul’s Trust Administration Impugns Probate Process

james brownJames Brown was known as the “Godfather of Soul.” When he died in 2006, he was considered by many to be one of the most influential musicians of the 20th Century.  Accordingly, he left behind a massive estate valued at tens of millions of dollars.

Recently, we came across an interesting article in the New York Times that outlined the chaos that has surrounded Mr. Brown’s estate since his death. Multiple law suits have been grinding on as a result of challenges to his estate plan.

Outside of his professional life as a successful musician, Mr. Brown’s personal life was plagued by estranged children, broken marriages, and brushes with the law.  His estate plan, however, was the exact opposite; the NYT described the estate plan, “as orderly as a book of prayer.”

In addition to dedicating millions to the college education of his grandchildren, the bulk of his estate was placed into the “I Feel Good” Trust to provide scholarships for Georgian children in need. However, since his death 8-years ago, no money has been distributed from the trust for these intended purposes.

Unfortunately, Mr. Brown’s will has been challenged by his numerous children, former spouses, and significant others. The patchwork of law suits arising from these challenges have led to an intervention by the South Carolina Attorney General to redirect the distribution of Brown’s assets.  Citing the erosion of public trust and confidence in the probate process, and pointing to the “unprecedented misdirection” of the Attorney General’s  intervention, the Supreme Court of South Carolina reversed the AG’s actions in redirecting the famous decedent’s assets.

To date, the only payments to come from the estate have gone to creditors, lawyers, and estate administrators. The probate proceedings have been so contested, two sets of executors have been replaced, with no closure of the estate in site.

Mr. Brown explained in an audio tape recording how he hoped his scholarship fund would benefit needy children from his home state of Georgia. He also left behind $2 million in scholarships for his seven grandchildren and divided his personal property – valued at over $2 million – to his children.

The “I Feel Good” Trust contained a standard “in terrorem” clause meaning that if any of the designated beneficiaries challenged the distribution of assets, they forfeit their respective share of the inheritance. Nevertheless, this clause has not deterred Mr. Brown’s heirs from challenging his estate plan; they argue, inter alia, that at the time of his death in 2006, Brown was under the influence of attorneys and managers who stood to profit from the trust administration. The heirs also assert Brown’s drug addiction resulted in a diminished testamentary capacity.

The Supreme Court remanded this mess to the local probate court, instructing the lower court to appoint an oversight panel to ensure the trust administration proceeded in accord with Mr. Brown’s original wishes. To date, however, the lower court continues to hear proceedings, but has yet to appoint such a panel.

This probate litigation defeats the primary goal of trust administration: keeping one’s estate plan private, and avoiding the delays and administrative costs of probate court.  These types of disputes seem far more prevalent when large fortunes are at stake.

In the case of the Godfather of Soul, the motives of family members and probate professionals come into question. As noted by the South Carolina Supreme Court, such cases shed a bright light on the nature of greed and denigrate the entire probate process.

If you are in need of an estate plan in order to preserve your family’s wealth and to make arrangements to transfer your estate to the next generation of your heirs, contact our law firm in order to discuss your options.  The initial consultation is free.

A proper estate plan is not simply a piece of paper; it is peace-of-mind.

Clarkston Legal

Facebooktwittergoogle_plusredditpinterestlinkedinmail