Archive for the ‘Guardianship’ Category

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Alternatives to Guardianships of the Person

February 1, 2010

A few weeks ago, we took a more in-depth look at the use of Section 867 Trusts as an alternative to guardianships for a minor. We examined some the advantages of the trusts and pointed out that guardianship alternatives like them are fine examples of the legislature working to provide reasoned solutions to issues that affect more people every day. There are others, and this time I thought we would focus on a few alternatives to guardianship of the person.

Recall that guardianship of the person involves the Probate Court’s judicial finding of incapacity of a minor or adult. Once the court finds the person lacks some or all capacity, the court appoints an individual to be responsible for that person’s non-financial interests. Often, the court reaches this restrictive measure because there is no option that can better protect the incapacitated person. Other times, there are alternatives that are not nearly as restrictive as the imposition of a guardianship.

For example, the Texas Health and Safety Code provides several useful options. Under that Code’s provisions, a person may take advantage of naming an agent under a Medical Power of Attorney. With some pre-need estate planning, a person could avoid guardianship altogether by nominating someone to make the same kinds of decisions before the need ever arises. Directives to Physicians, also authorized under the Health and Safety Code, might be useful as well. Used correctly, these documents can communicate a person’s intentions and directions regarding medical treatment under terminal or other specified circumstances.

Likewise, the Health and Safety Code may help avoid guardianship and permit the nomination of a surrogate decision maker, much like the agent under a Medical Power of Attorney. In both emergency and non-emergency situations, Texas law may provide a means of assisting the person without the time and expense of a formal guardianship.

Keep in mind that the Probate Court does not approach the creation of a guardianship lightly. Because the process can involve the removal of rights and liberties that a person would otherwise enjoy, most probate judges in Texas are very careful to invoke their guardianship authority only in those circumstances where it appears that there is no other option available. Even then, by requiring appointed guardians to report on the condition of their ward annually, those probate judges are careful to keep a watchful eye on the guardian to see that he or she is making decisions consistent with the ward’s best interests.

Too often, guardianship issues become litigated matters. They are particularly emotional when guardianship of the person is at issue. These cases can pit brothers against sisters, sons against mothers, and so on. Meanwhile, a person who may need help is often tugged in both directions. The fact is that in many cases, these fights have been brewing for some time, and they are going to happen despite all the best estate planning. Human nature often knows no logic. But, with alternatives to formal guardianships in place, the Probate Court and the parties can begin to work together toward crafting a result that accomplishes what everyone should be concerned about – the well-being and best interests of the incapacitated person.

Posted in Estate Planning, Guardianship, Trusts | Comments Off

This Week in Probate and Guardianship Appeals

January 8, 2010

Starting in 2010, Ford & Mathiason LLP will be writing a weekly entry covering newly released opinions by the Texas Courts of Appeals in the areas of Probate and Guardianship. Jason Brower, Associate in charge of the appellate section of Ford & Mathiason LLP, will be authoring these entries.

Estate of Pauline Moran Allen, Tyler Court of Appeals

This week’s entry comes to us from the 12th District Court of Appeals in Tyler. Dollie Weir appealed the trial court’s order which granted Leonard Allen’s motion for summary judgment. Two Issues were raised by Dollie, (1) that Leonard failed to present any summary judgment evidence to support his motion, and (2) that the thirteen writings, purported to be a codicil to Pauline Moran Allen’s Will, lacked testamentary intent.

Summary Judgment Evidence

The Will of Pauline Moran Allen was admitted to probate as a muniment of title on January 16, 2008. On April 2, 2006, Leonard filed a motion to amend the application and probate as a muniment of title thirteen writings purportedly signed by Pauline on December 27, 2002. Dollie filed a contest to Leonard’s motion, stating that the writings lacked testamentary intent. Leonard filed a motion for summary judgment, asserting that the thirteen writings were prepared, dated, and executed by Pauline, contained the signatures of the two witnesses, and complied with all the formalities of a will except for being entitled a will or codicil. However, he failed to attach any summary judgment evidence to his motion.

Dollie moved for both a no-evidence and a traditional summary judgment (attaching the 13 writings along with other summary judgment evidence) and asserted that the writings lacked the necessary testamentary intent to constitute a will or codicil. The trial court granted Leonard’s motion and denied both of Dollie’s motions. The court found that there was no genuine issue of material fact in Dollie’s contest, that no ambiguity existed with regard to the testamentary intent of Pauline in the codicils and that Leonard was entitled to have the codicils admitted to probate as a muniment of title.

The Court of Appeals agreed with the Trial Court on the basis that even though Leonard did not attach any summary judgment evidence in his motion, when both parties move for summary judgment, the trial court may consider the combined summary judgment evidence. Therefore, because Dollie had included all the evidence needed to establish Leonard’s motion, the granting of such motion was not in error.

Lack of Testamentary Intent

Dollie’s second issue revolved around her claim that the thirteen writings lacked testamentary intent. The Court of Appeals first noted that any writing introduced as a will or codicil must contain an explicit statement declaring that the writings are wills or codicils or that the property division will take place only after the decedent’s death. The Court then further noted that the intent of the testator must be ascertained from the language used within the four corners of the instrument offered for probate. Commonly called the “Four Corners Rule” this means that unless there is some ambiguity in the language of the instrument, outside evidence cannot be used to add or contradict the writing or show that the testator intended something different than what is on the instrument.

Leonard, in his motion for summary judgment, was in effect saying that these thirteen writings are unambiguous, executed with all requisite formalities of a codicil, and therefore no outside evidence of testamentary intent is needed or even allowed. Dollie disputed this however, and stated that none of the writings are referred to as wills or codicils, and contain no words evidencing that Pauline intended for these to dispose of her property only upon her death, and therefore lacked the requisite testamentary intent to be regarded as codicils.

The Court of appeals agreed with Dollie. They stated that nowhere in the writings did they find testamentary language, such as words of grant or devise, nor were there words from which a bequest could reasonably inferred. Because no amount of outside evidence could supply the absent testamentary intent, such writings were not a codicil. The trial court therefore erred in granting Leonard’s motion for summary judgment and the Court of Appeals reversed such judgment.

What does all of this mean for you? If you want to ensure proper disposal of your property upon your death, do not draft your own documents. Instead, call us today and schedule an appointment to discuss your estate planning needs.

Posted in General, Guardianship, Probate | Comments Off

Alternatives to Guardianships for Minors: Section 867 Trusts

December 28, 2009

In many cases, the Court’s creation of a guardianship of the estate for an incapacitated individual or a minor may be inevitable. It may be the least restrictive option for the Court. However, many times I am approached by clients for whom there are lesser-restrictive and more efficient mechanisms or processes that can achieve many of the same goals.

When faced with the situation that a minor child is supposed to inherit some money from a parent or grandparent, the Courts cannot allow the minor to receive the property outright. Likewise, the law does not allow a parent to collect the money on their behalf without some formal procedure like a guardianship.

Take, for example, a father’s $50,000.00 life insurance policy naming his minor child as the sole beneficiary. The surviving parent wants to collect the funds owed to the child so that they can be used for the ordinary expenses of raising the minor, or perhaps the funds will be tucked away for college. In either event, the mother wants to collect the funds, and the insurance company wants to pay them but cannot pay the minor child directly. As par for the course, the insurer usually demands that a guardianship be created. They don’t want to be liable to the child by delivering the funds to the mother without some kind of security that the mother will be accountable for the funds. Guardianship of the minor’s estate seems like the best choice, if not the only one. But is it?

As with most attorney answers – it depends. The mother could request that the Court appoint her as the Guardian of the minor’s Estate. But this choice often comes with some significant downside. The mother would need to post a bond for the policy proceeds, and the proceeds will be reduced by the fees and expenses of creating the guardianship. Moreover, the guardianship must be maintained, which means that additional expenses will be incurred annually until the child turns 18. Again, the proceeds would be reduced, sometimes significantly, over time. The overall process might be inefficient and challenging, if not impossible under certain circumstances.

One alternative available to the mother might be a trust created by the Court under Section 867 of the Texas Probate Code. Under this law, a financial institution, and sometimes a person, can be appointed by the Court to act as Trustee of a trust created by the Court for the benefit of the minor. The trust comes equipped with very specialized terms that permit the Trustee to collect the insurance proceeds and use them for the benefit of the minor until anywhere from the age of 18 to 25. Every year, the Trustee reports to the Court and accounts for the trust’s activities.

Often, such an alternative can be achieved relatively quickly and with significantly lower cost. The insurance company is happy to pay a bank or person who will be accountable for the funds, and the mother is happy that the funds will be available for the same purpose for which they were intended by the deceased father.

Sometimes, guardianship is not just the best choice, but the only one. But, alternatives such as the Section 867 Trusts are prime examples of the legislature working for our citizens to provide reasoned answers to questions and issues that affect more people every day. In the areas of guardianship and probate, there may be a number of achievable alternatives that provide the same, if not better, results for the client, at lower cost and with greater overall benefit.

Posted in Estate Planning, General, Guardianship, Probate, Trusts | Comments Off

Guardianships in a Small Town

February 14, 2009

From Matlock to My Cousin Vinny, jokes about the administration of justice in small towns has been the stuff of movies and television for decades, and although Hollywood has always portrayed dramatic differences in justice in small towns versus the big city, I always wondered if differences actually existed.  In the last couple of years, I have found the answer to often be “yes!”

Guardianship laws in Texas are relatively new, and they are much more complex than most attorneys realize.  The primary objective behind guardianship laws is to provide protection and decision-making for someone who no longer has the ability to make decisions for themselves.

In larger counties like Harris and Dallas, dedicated courts (the Probate Courts) hear all probate and guardianship cases, and these are the only types of cases these courts handle.  In smaller counties, however, the county does not have a dedicated Probate Court but instead has county courts that hear civil matters, criminal matters, and probate matters all in the same court.  As a result, the judges and attorneys in many of these courts have too many responsibilities to be able to master the guardianship laws.  As I have seen in several cases recently, the inability to master this topic jeopardizes the freedoms many of us hold dear.

In one recent case, neither the Judge nor the attorneys knew much about guardianship laws.  In that case, the Judge unknowingly granted a guardianship without proper authority.  Before the Court of Appeals ultimately reversed his decisions and started the entire process over, more than $55,000 was paid out of the incapacitated person’s bank accounts to the opposing lawyers without any proper court authority.

In another case, a mother sought to obtain guardianship of her incapacitated adult daughter so she could provide care for her.  She hired lawyers who took 3 years to bring this simple, routine case before the Court.  After literally years of frustration, the mother finally fired the lawyers, and within less than a month, she accomplished on her own what the lawyers were never able to accomplish.  In a case that could easily have been completed in less than 2 months and for relatively low attorneys’ fees, those lawyers spun their wheels needlessly for years and charged nearly $10,000.  The Court-appointed Attorney in the case charged $2,500 in spite of admitting to the Court that he acted inappropriately.

In yet another case, the small county Judge and lawyers forced a relatively young gentleman to be evaluated by a doctor who determined the man to be “totally incapacitated” and said that he lacked the ability to drive, feed himself, care for himself, manage his own money, etc.  At the end of the case, the Court found that the gentleman totally lacked the ability to perform these basic functions, but the Court did nothing to actually address his needs.  The man owns valuable real estate with considerable oil and gas minerals on the property.  So, the Court took all of his property away from him and gave it to a local bank to manage (and make money off of!), but the Court did nothing about addressing the man’s personal needs.  To date, the man still drives his own car, feeds himself daily, maintains his own him, etc. – all of the things the doctor said he lacked the ability to do and the Court ordered that he be restricted from doing.  The only thing that has changed about his life is that he no longer has access to his own money.

In the larger counties with Probate Courts, the judges know how a case is properly brought before the Court, and those judges pay close attention to protecting the rights of the purportedly incapacitated adult.  The Probate judges closely monitor the attorneys fees paid in guardianship cases so that the fees are “reasonable” and not paid for work that is not actually completed.  Likewise, the Probate judges will take great efforts to ensure that someone needing assistance gets it – not just that their money gets taken away from them without any effort to provide food or clothing for them.  All of the issues that I identified in the cases described above would likely have been eliminated had the cases been brought in a Probate Court rather than a small-town county court.

These cases and others like them illustrate the unfortunate reality that the administration of justice, or at least the administration of guardianship laws, often differs from the big cities to small counties.  Although many guardianship cases in small counties can involve huge estates and very complex issues, the attorneys and judges working on those cases are many times not experienced enough to adequately handle the issues before them.

In each of the cases described above, Ford & Mathiason was hired to come in and clean up the mess created by attorneys who took these cases not knowing enough about guardianship laws to properly handle these cases.  In one of these cases, our client was not aware originally that she could hire a lawyer from outside the county to handle the guardianship case.  She was happy to learn that she could retain Ford & Mathiason to help her in the small East Texas town where her case was pending.

If you find yourself engaged in a difficult guardianship case in a smaller county that just does not seem as though it’s been handled properly, you should contact a qualified guardianship attorney who routinely practices in this area.

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