September 14th, 2012
April 18th, 2012
Talk to a guardian or conservator and you’ll likely find out it is a thankless, demanding job. Often these fiduciaries not only have to provide a great deal of care and protection for their wards but also have to be wary of persons eager to bring claims against them for converting the ward’s assets, breaching fiduciary duties, or any number of other possible claims.
Take for example the case of James McQuien. McQuien began living with Clorina Haring way back in 1974. In 2001, Haring wasn’t doing so well on account of Alzheimer’s, so McQuien was appointed Haring’s guardian and conservator. In this role, McQuien hired a sitter for Haring while he was at work and wrote checks to himself and for cash, some of which he used to pay the sitter and the rest of which he used for food and other household expenses.
McQuien also filed his annual reports with the probate court, none of which was challenged.
Nevertheless, after Haring’s death, the executor of Haring’s estate petitioned the probate court for a final accounting and settlement from McQuien. After a two-day bench trial, which included testimony from 15 witnesses including experts in assisted living and home health care, the probate court accepted McQuien’s accounting and discharged him and his surety from any other estate obligations. The probate court’s order was affirmed by the Georgia Court of Appeals in In re Estate of Haring. Let’s briefly see why. (more…)
November 18th, 2011
The case highlights a common problem with fiduciary litigation – estate disputes often span multiple courts and involve multiple separate lawsuits. The case therefore serves as a good reminder to fiduciary litigators that it is their responsibility to follow proper procedure or risk losing a damage award on appeal. (more…)
November 9th, 2011
On November 3, 2011, the Florida Supreme Court approved the Appellate Court Rules Committee’s proposed rule changes to the Florida Rules of Appellate Procedure. Among the changes to the Florida Rules of Appellate Procedure is the addition of a new Rule 9.170, which governs appeal proceedings in probate and guardianship cases.
Because probate court cases often involve a number of different issues that are akin to a bunch of separate lawsuits all under one probate umbrella, the new rule helps clear up the question of what types of orders are appealable orders. (more…)
October 24th, 2011
There are so many ways to abuse powers of attorneys. That’s why they’ve been referred to as “vehicles for fraud.” While we’ve previously looked at ways in which they’ve been abused and our colleagues at Bryan Cave, Stephanie Moll and Mary McMath, have examined them in the context of “Who Can You Trust?” over at TrustBryanCave.com, the ways in which they can be abused are seemingly endless. The reality is that these cases will continue to appear in increasing numbers as the Baby Boomers get older.
Last month, in Ward v. Patrizi, the Ohio Court of Appeals dealt with a a classic power of attorney abuse fact pattern. A person who needed some help managing his bills designated a family member as his attorney-in-fact. The attorney-in-fact dutifully paid the principal’s bills from his checking account, but, on the day the principal died – before his body was even cold – the attorney-in-fact cut herself a check made out to “cash” from the principal’s account.
You can probably figure out how this turned out for the attorney-in-fact. But the interesting part of this story is what happened to the attorney-in-fact after she tried to give the money back to the estate.
October 14th, 2011
In response to several Florida statutory changes that went into effect earlier this year, the Florida Bar’s Probate Rules Committee proposed certain amendments to Probate Rules 5.025 (Adversary Proceedings) and 5.240 (Notice of Administration). On September 28, 2011, the Florida Supreme Court adopted the Committee’s proposals.
The Florida Probate Rules have been amended as follows: (more…)
Florida Court Of Appeals Exonerates Trustee Who Sold Trust Property That Was Quickly Flipped For Over Twice The Sales Price
October 3rd, 2011
When the real estate market was booming, it was common to see trustees take advantage of the soaring sales prices by selling real property that was all or part of a trust corpus to developers or investors. Real estate investors, of course, are going to try to quickly flip the property for a tidy profit. It’s no surprise that beneficiaries will look at that type of transaction and think they should have got the benefit of the second sale rather than the original sale.
So what happens when a trustee sells real property held by the trust to an investor who quickly flips the property for more than twice the sale price? In Ortmann v. Bell, a Florida Court of Appeals considered that scenario and essentially determined that – without more – a transaction like that is not automatically a breach of fiduciary duty. Of course, it also helps to have the beneficiaries consent to the sales price and have a probate court order confirming that the beneficiaries agreed to the sales price . . . . (more…)
September 14th, 2011
In the event that a corporate fiduciary must repay executor’s fees or trustee’s fees, reimburse an estate or trust the fiduciary’s attorney’s fees, or pay a damages award, it usually has the resources available to make such a payment. An individual fiduciary, on the other hand, often does not. An individual fiduciary may bleed the trust or estate dry through litigation and leave nothing behind at its conclusion for the winning party to recover. Therefore, even if a wronged beneficiary or heir is successful in a lawsuit against an individual fiduciary, the winning party may find him or herself with a piece of paper confirming the victory but not much else.
Fortunately, there are some effective trial techniques available to avoid that scenario – one of which was on display in In re Garibay [2011 WL 3795253 (unpublished)]. On appeal the Kansas Court of Appeals affirmed a trial court’s creative solution to this problem. (more…)
September 8th, 2011
In Foster v. Professional Guardian Services Corporation, the Alaska Supreme Court determined that a court-appointed conservator breached its fiduciary duties through a number of acts and a failure to timely act. Even though the conservator prevailed on a majority of the claims brought against it, and thus prevailed in the “global” scheme of the litigation, the Alaska Supreme Court determined that the conservator could not have its attorney’s fees paid from the ward’s estate for those claims on which it lost.
In reaching its decision, the Alaska Supreme Court suggested that there is no such thing as a de minimis breach of fiduciary duty. (more…)
August 17th, 2011
The general rule is that a successor personal representative is not liable for the acts of its predecessor absent certain circumstances (e.g., the successor knew of a breach and permitted it to continue, neglected to take proper steps to redress a breach, etc.). So, do these certain circumstances arise when the predecessor and successor personal representatives are partners in the same small law firm? The Wisconsin Court of Appeals recently dealt with that issue and many more in In re Elegreet.
In addition to the successor personal representative liability question, the Court was faced with issues that come up all the time at the trial court level but which don’t often get appellate scrutiny: fees where the executor is also an attorney, attorney’s fees to a successful (or partially successful) beneficiary, and reduction in the personal representative’s fees. So what led to this tangled web? (more…)