Plan To Be 100

This is a case in which the probate court determined the validity of an older person’s estate plan in the context of a guardianship and conservatorship proceeding.

The subject of the case is only referred to as JLD.  I’ll call him “Jack.”

Jack was never married and had no kids.  He had one sibling, and that sibling had children.  Jack’s estate plan left everything to those nieces and nephews, and these nieces and nephews are the appellants in this case.

Appellants lived some ways away and had limited contact with Jack, but take an interest when Jack begins to show signs of decline.  They petition to become Jack’s guardian and conservator, which request the trial judge grants.  In that process, the Appellants produce a psychological evaluation that finds some age-related cognitive impairments, although at the time of the proceedings Jack is living alone, managing his own affairs and driving confidently.

Jack objects but also says that if the court must appoint someone over his affairs, it should not be these nieces and nephews.  Accordingly, the trial judge appoints neutrals to fill both roles.

Sensing that Jack’s attitude towards them is turning, appellants also petition for, and obtain, a court order saying Jack cannot modify his estate plan without court approval.  We’ll call this the “EP Order.”

Enter Stage Left

Following the appointment of a guardian/conservator, the spouse of someone Jack worked with (“Sadie”) assumes an increased interest in Jack and becomes an advocate for his wants and needs.

Jack has another psychological evaluation conducted which finds he is competent to handle most of his affairs, and also that he has “testamentary capacity.”

Using this new medical evaluation, Jack petitions to have his estate plan modified leaving it all to Sadie and her spouse (cutting out the nieces and nephews).   The trial court approves the new plan.  Appellants appeal.  The Court of Appeals affirms.

The case is unpublished.  It is called In Re JLD Living Trust.  [Click on the name to read the case.]

Lifetime Litigation

A question in such cases is whether the probate court has the authority to litigate the validity of estate planning documents in a guardianship or conservatorship proceeding.  This case says you can, citing “generally” 700.5401–700.5433 – which is basically all of the law on conservatorships.  But because these appellants requested and obtained the EP Order which expressly gave the trial judge the power to decide whether Jack would be allowed to change his estate plan, any conversation on this topic in this opinion has to be viewed as dicta. Pretty clearly, in this case, the appellants opened that can of worms on their own.

EP Changes by Protected Persons

Cases in which people subject to guardianship or conservatorship change their estate plans also invoke questions about how the trial court’s findings re capacity of the protected person intersects with the validity of the documents they execute.  The settled rule is that the existence of such court protections do not preclude the person from having testamentary capacity.  [I have had these cases and personally believe that the legal basis of this rule is archaic and needs to be readdressed by an appellate court that wants to take the time to do so seriously.]  That said, again, in this case, (1) the subsequent psychological evaluation of Jack is persuasive and (2) the appellants had, by obtaining the EP Order, conceded that the trial court would have the ability to approve such changes within the context of the CA/GA proceedings – essentially waiving any objection on these grounds.

A curious related issue was raised by the appellants as to Jack’s Trust. Jack’s Trust expressly stated that the Jack would be removed as Trustee and the Trust would become irrevocable upon his “incapacity.”  Appellants sought to argue that the trial court’s finding that Jack was a “legally incapacitated individual” precluded any amendment to his Trust.  In response to this argument, the COA claims that the appellants fumbled the handling of this issue and, in doing so, waived it.  (I also think they waived it when they sought and obtained the EP Order.)

Undue Influence

The COA also finds that the appellants waived their undue influence claim.

Trigger Cases

This issue comes up regularly when I talk to clients who have concerns about the capacity and/or vulnerability of someone they are expecting to inherit from, and whether or not they should do something in court to protect their inheritance. (Not that they say those words, but I know what they mean.)

As I explain to these clients: It’s a timing thing.  It’s a question of when to pull the trigger.  And the timing can be very delicate.

Option 1: Wait.  Let the dementia progress.  Petition when the elder is clearly incompetent.  The risk is that s/he may have changed his/her estate plan by then.

Option 2: Pull the trigger now.  The risk is that by firing too soon you push the person you hope to inherit from right into the arms of the bad actor who will use your enthusiasm for taking away their rights as fodder for why you should be cut out.

These folks decided to shoot.

I wonder if, rather than filing for guardianship and conservatorship, these nieces and nephews would have simply started buttering up to Jack, making the drive now and again to listen to him talk about his aches and pains, they wouldn’t have come out better?

I think maybe.

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