STRIKE THREE — YER OUT

February 6, 2013 § Leave a comment

In Estate of Ristroph v. Ristroph, handed down by the COA on December 4, 2012, we confront yet again the mantra that an appeal from a judgment that disposes of fewer than all of the issues before the trial court, and which does not include a certification under MRCP 54(b), will be dismissed. In this case, the principle lands home with a triple whammy.

As you may recall, I’ve described MRCP 54(b) here as the “Graveyard of Appeals.” That’s because of the rule’s requirement that, if the trial judge directs entry of a judgment as to fewer than all of the issues, he or she must include a finding that there is no just reason for delay, and directing entry of a final, appealable judgment as to the issues decided.  The trial judge’s certification must have a reasonable basis and must not be an abuse of discretion. If the judgment lacks the certification, the appellate court will lack jurisdiction because an appeal lies only from a final judgment (MRAP 5 does provide for an interlocutory appeal to the MSSC, but that is discretionary with that court, and these comments pertain to non-interlocutory appeals).

Undaunted by the express requirements of MRCP 54(b) and the ever-growing body of case law strictly applying it, lawyers continue to file appeals from judgments disposing of fewer than all of the issues, apparently drawn to the appellate process like moths to a flame — with similarly self-immolatory results.

In Ristroph, John Ristroph filed a pleading in his father’s estate to set aside a deed from his father to his brother Paul. He filed a separate pleading challenging certain inter vivos gifts from his father to Paul. Both pleadings alleged undue influence.   

The chancellor dismissed the challenge to the deed based on statute of limitations.

John then filed a motion for rehearing pursuant to MRCP 59. Before the chancellor could rule on John’s motion, however, Paul, having once struck paydirt with his statute-of-limitations argument, filed a motion for summary judgment claiming that John’s inter vivos gifts claims were also time-barred.

The chancellor entered an order overruling John’s MRCP 59 motion for rehearing, and John appealed. <STRIKE ONE>

While the appeal was pending, John filed a motion under MRCP 60 asserting a new argument based on lack of consideration.

The chancellor then overruled John’s MRCP 60 motion, as well as Paul’s motion for summary judgment. John filed yet another an appeal from this latest adversity. <STRIKE TWO>

The MSSC bundled John’s two appeals together and sent them downstairs to the COA, where they landed with a thump on the desk of Judge Maxwell, who astutely pointed out that the chancellor was not yet through with the case at the trial level because the claims as to the inter vivos gifts remained unresolved. Ergo, no jurisdiction. <STRIKE THREE — YER OUT>

From where I sit — reading an appellate judge’s interpretation of a cold record — I find it hard to grasp why and how attorneys are filing appeals from less-than-fully-dispositive judgments without a R54(b) certification. Here we had not one, but two, untimely appeals in the same case. That may be some kind of record. John’s counsel on appeal does get a “Z” for zealously representing his client, I guess, but still, two untimely appeals (strikes one and two) and a dismissal (strike three). That’s got to smart a little.

THE RIGHT OF AN ADOPTED CHILD TO INHERIT FROM THE NATURAL PARENTS

January 30, 2013 § Leave a comment

Consider this scenario:

Father and Mother One have a daughter together, whom we will call Daughter One. Mother One dies and Father is remarried to Mother Two. Father and Mother Two have a daughter together, whom we will call Daughter Two. Soon after Daughter Two’s birth, Father and Mother Two are divorced. Mother Two remarries, and her new husband, with Father’s consent, adopts Daughter Two. Father never remarries, has no more children, and dies intestate. Who are his heirs?

If you answered both Daughter One and Daughter Two, you are correct.

MCA 93-17-13 specifies that ” … the natural parents and natural kindred of the child shall not inherit by or through the child, except as to a natural parent who is the spouse of the adopting parent, and all parental rights of the natural parent, or parents, shall be terminated except as to a natural parent who is the spouse of the adopting parent.” Nothing in the statute precludes the adopted child from inheriting from the natural parents.

In Alack v. Phelps, 230 So.2d 789, 793 (Miss. 1970), the Mississippi Supreme Court held:

While the effect of a final decree of adoption is that the natural parent or parents will not inherit by or through the child, and all parental rights are terminated, Mississippi’s adoption law does not state in any shape, form or fashion that the right of the child to inherit from its natural parents is terminated. We think the intent of the legislature is clear; they intended for the child to continue to inherit from his or her natural parents.

2 C.J.S. Adoption of Children s 63(c) page 454 (1936) succinctly states the applicable law in this way:

‘In the absence of a statute to the contrary, although the child inherits from the adoptive parent, he still inherits from or through his blood relatives, or his natural parents. In view of the tendency of the courts to construe adoption statutes so as to benefit the child, as pointed out above in s 6 of this Title, and also, in in view of the fact that a statute severing the relation between parent and child is in derogation of common law and should for that reason be strictly construed, it has been held that an adoption statute providing that the natural parents shall be divested of all legal rights and obligations with respect to such child should not be construed so as to deprive the child of its right to inherit from or through its natural parents. Under such a statute it cannot be assumed that the adopted child cannot inherit from its natural parent unless there is an express legislative declaration to that effect.’

There is no express legislative declaration to that effect in Mississippi’s adoption law.

This issue was presented to me recently when a lawyer inquired whether an adoption decree that included the express language that the minor child ” … shall inherit from the natural father” would comport with the law. And, if so, would it then mean in the fact scenario set out above that Daughter Two would be included as an heir. Based on my research, I believe it does, whether the express language is included in the adoption decree or not. Don’t you agree that there are some implications here for intestate estates?

THE QUIRKS OF RENUNCIATION

January 14, 2013 § 1 Comment

The COA case of Estate of Weill v. Weill, decided November 6, 2012, is a reminder of several quirks involved in renunciation of wills.

  • MCA 91-5-27 provides that if the decedent made no provision for a surviving spouse, the survivor has a right to share in the estate of the decedent as in the case where there is an unsatisfactory provision (see below), and no formal act of renunciation is necessary. Tillman v. Williams, 403 SO.2d 880, 881 (Miss. 1981).
  • In Weill, the decedent had left his surving spouse ” … my seven beloved dogs to care for. She is to be offered $25,000 from my assets to effect the transfer of my dogs to her home …” The chancellor and the COA rejected the appellant’s argument that the bequest was really for the benefit of the dogs, noting that the cash bequest was to her and not for benefit of the canines. Thus, since there was a bequest, she could not avail herself of MCA 91-5-27.
  • MCA 91-5-25 provides that if the decedent ” … does not make satisfactory provision …” for the spouse (the statute uses the word “wife”), then the spouse may renounce the will by filing a formal notice to the effect of the language suggested in the statute, and the spouse will thereupon be entitled to share in the estate to the extent set out in the statute. The renunciation must be filed within 90 days of the date of the admission of the will to probate.
  • In addressing one of the appellant’s arguments, the COA noted that a renunciation filed in the stautory form before probate of the will has been found to be adequate. Gettis v. McAllister, 411 So.2d 770 (Miss. 1982).  
  • In Weill, although the attorney for the widow had made it known to the court and counsel opposite that the widow intended to file a renunciation, no formal renunciation was filed within the 90 days. The chancellor and the COA  rejected the claim that an oral statement of intent to renounce complied with the statute.

When it comes to probate matters, the bottom line is that the requirements are all statutory, which means that they must be strictly construed and followed. Do not expect a chancellor or appellate court to fudge requirements for you because you “came close.” The fact is that close gets you no cigar. You have to be right on target. What is required is right there in the law, in black and white. If you don’t read the law in advance, you have no one to blame but yourself when things go embarrassingly and expensively wrong.

THE ROLE OF THE SUBSCRIBING WITNESS

December 4, 2012 § 1 Comment

In the MSSC decision in Estate of Holmes, decided November 29, 2012, there was a proceeding for solemn probate. The two subscribing witnesses were called to testify, and their testimony established that: they did not know they were witnessing a will; they that the testator did not request that they witness a will; and that they did not satisfy themselves that the testator was of sound and disposing mind when she executed the will. The MSSC reversed the chamncellor’s decision admitting the will, holding that the subscribing witnesses did not satisfy the requirement of “attesting” witnesses.

Justice Dickinson’s opinion states, beginning at ¶ 10:

Mississippi law empowers “[e]very person eighteen (18) years of age or older, being of sound and disposing mind” to make a will which, if not “wholly written and subscribed” by the testator, must be “attested by two (2) or more credible witnesses in the presence of the testator or testatrix [MCA 91-5-1]. The attesting witnesses must meet four requirements: First, the testator must request them to attest the will [Green v. Pearson, 145 Miss. 23, 110 So. 862, 864 (1927)]; second, they must see the testator sign the will [Matter of Jefferson’s Will, 349 So.3d 1032, 1036 (Miss. 1977)]; third, they must know that the document is the testator’s last will and testament [Estate of Griffith v. Griffith, 20 So.2d 1190, 1194 (Miss. 2010)]; and finally, they must satisfy themselves that the testator is of sound and disposing mind and capable of making a will [Matter of Jefferson’s Will, Id.].

¶11. These formalities associated with attesting a will are important, not only as safeguards against fraud by substitution of a different will than the one signed by the testator, but also to make sure a person executing a will is of sound and disposing mind.

And this at ¶ 14: “One may not witness a will in ignorance.”

I would say that most of us who have ever prepared simple wills as a routine matter for clients have not paid heed to the exacting requirements that are imposed on subscribing witnesses by operation of the case law in this area. But, as this case illustrates, it is worth re-examining how you select and instruct your subscribing/attesting witnesses as to their duties, and, more importantly, how you document what it is that they are witnessing. By that latter point, I mean to suggest that you might want to scrutinize that subscribing witness affidavit form that is fossilized in your comouter and which you have been using for more than 35 years, to see whether it is stout enough to pass muster in a trial of this sort, and whether it would help jog the memory of the witness to the extent that the witness’s testimony would be helpful.

Justice Pierce’s dissent raises some good points about the prudence of requiring witnesses, some of whom performed their duties decades before, to have almost perfect recall of the events surrounding the subscription of the document. I know that I have been asked several times to recall events surrounding similar transactions, and I have found my memory murkily general and unhelpful, at best. Imagine a lay person who is not familiar with all of these legalities and their import being asked similar questions.

APPROACHING ZERO TOLERANCE

October 2, 2012 § 7 Comments

If you have gotten the impression that many chancellors are tightening down on the handling of fiduciary matters, it’s not just your imagination or overactive paranoia glands. More and more chancellors across the state are approaching zero tolerance for sloppy handling of estates, guardianships and conservatorships.

There are several reasons for this. One, and perhaps paramount, is that it is the judge’s job. But here are several others:

  • There is the case of attorney Michael J. Brown, of Hinds County, who helped fritter away hundreds of thousands of dollars of a ward’s account.
  • There is the case of the lawyer in jail in Rankin County who has been unable to account for fiduciary funds, and who will begin serving federal and state sentences therefor as soon as Judge Grant releases him from his civil contempt sentence — which is contingent on his accounting.
  • There is the case of another lawyer in Rankin County who refuses to account for fiduciary funds, and who is likewise cooling his heels in the county bastille until he complies.
  • There is the case of the lawyer on the coast who committed suicide when the questions started floating about how fiduciary matters in his charge were handled, and the last I heard the missing funds are more than $1.2 million.

The genius of our fiduciary system in Mississippi is that it creates a three-tiered system of protection for the ward or beneficiaries. The fiduciary is bonded (in most cases) and is accountable to the court; the lawyer works with the fiduciary, providing advice, guidance and oversight to see that the law is followed; and the court authorizes actions, demands and approves accounts and inventories, and scrutinizes the actions of both the fiduciary and the ward. Whenever any one tier fails, it is up to the other two to catch and fix the failed part. When judges wink at incompetent legal work in fiduciary matters we are shirking our duty to innocent beneficiaries, creditors and people who are unable to protect their own interests.

It’s not the stuff of movies and detective novels that money is stolen from fiduciary accounts. I have seen it right here in our little backwater, and I am sure it is happening and has happened in yours (not meaning that you live in a backwater).   

Fraud and mishandling of funds thrive in the sloppy handling of fiduciary matters. When you leave it up to the fiduciary to go about unaccounted for and unadvised and unsupervised, you are inviting trouble. And chancellors are becoming ever more vigilant and intolerant.

BREAKING NEWS ON MEDICAID CLAIMS

September 19, 2012 § 2 Comments

In a recent estate in this district, the Medicaid Commission took the position that if the decedent claimed homestead on a parcel of property, and was survived  by a spouse, one or more children or one or more grandchildren, then Medicaid would release its entire claim, regardless whether the property is worth more than the $75,000 statutory exemption.

In this particular case, the estate’s only asset was the homestead property. The lawyer representing the administrator called the Medicaid Commission to try to negotiate a reduction of its $110,000 claim and advised the commission’s staff attorney that the value of the homestead exceeded $75,000. The staff attorney replied that if the decedent was survived as set out above then Medicaid would release its claim, regardless of the value of the homestead.

Up to now, I had understood that Medicaid would release its claim only to the first $75,000, and would pursue its claim above that amount. In the situation cited above, I would have thought that Medicaid would try to pursue its claim to the $35,000 above the homestead exemption.

If this case does, indeed, indicate a shift in policy, you can be in a position to save your clients in estate matters considerable money simply by making a telephone call to the Medicaid Commission.

CAVEAT: Don’t take this post as authority to do anything. Call the Medicaid Commission yourself and get it from them what their position is with respect to your client’s situation.

If you handle any probate matters at all, you need to be familiar with the exemption statutes and understand how they affect the matters you handle. A helpful post on the topic is here. Not claiming exemptions can cost your clients thousands. Clients love lawyers who can save them thousands.

THE SYMPTOMS OF PROBLEM ESTATES

August 30, 2012 § 2 Comments

Arizona courts pioneer in a lot of ways. The latest accomplishment involves monitoring of probate matters.

That state requires that probate cases be classed as minimum risk, moderate risk, or maximum risk. Each file is evaluated to classify it based on certain factors or indicators. Insted of our one-size-fits-all system, the level of reporting and monitoring in Arizona is tailored to meet the needs of the particular case. Each category requires court personnel to meet periodically with the ward or beneficiaries. Minimum risk cases involve a telephone interview every other year, moderate risk require an annual visit, and maximum risk call for a variety of measures including case compliance audit or even forensic investigation. Each level is prescribed meaures of accounting appropriate to the risks inovlved.

I found the risk indicators used by the court to be quite interesting. In fact, I have seen cases where multiple risk indicators were present in cases before our courts. There are 39 used in Arizona. Here are some of them:

  • No family members.
  • Large estate.
  • Dispute among the parties.
  • Late or no inventory or accountings.
  • Inaccurate or no record keeping.
  • Unacceptable accounting practices.
  • Disproportionate or unusually large transactions.
  • NSF checks and bank charges, late payment charges, payment of interest or penalties.
  • Use of ATM’s or gift cards.
  • Health, business or personal problems of the fiduciary.
  • Financial problems of the fiduciary, such as tax liens, judgments or bankruptcy.
  • Difficulty in obtaining a bond or failure to renew it.
  • Attorney with a history of neglecting or mishandling probate matters.
  • Fiduciary with limited experience (especially where the estate is large or complex).
  • Poor or no supervision of fiduciary by the attorney.
  • Ignoring requests of court and show cause court orders.
  • Pattern of rebuffing reqquests for information by attorneys and court.
  • Unauthorized gifts or loans.
  • Pattern of complaints against the fiduciary.
  • Transfers between bank accounts, particularly when close in time to inventory or accounting dates.
  • Lack of contact between guardian of the estate or conservator and the ward.

These are what the courts look at to decide whether a fiduciary should be removed, or whether some other action should be taken to protect the interest of the ward or beneficiaries, but many of these you should monitor yourself in carrying out your role as attorney for the fiduciary. These are the symptoms of an ailing probate matter that require your immediate therapeutic attention. Some of them can be fatal. And if you fail to act promptly, some of them can cost you money. 

[The information here comes from Future Trends in State Courts, 2012, published by the National Center for State Courts]

INVESTMENT RESPONSIBILITIES OF FIDUCIARIES

July 30, 2012 § 4 Comments

Executors, administrators, guardians and conservators have a fiduciary duty to the beneficiaries or wards (trustees have their own, separate body of law, although they are fiduciaries also). The fiduciary’s duty (in the absence of explicit directions in a will) …

” … is to provide honest, intelligent management … [h]owever it might be more accurate to think of the [fiduciary] as a co-manager (and perhaps a junior co-manager at that) with the court being the other manager. The [fiduciary] can do very little without the prior approval of the court. The [fiduciary’s] responsibility is to be knowledgeable about the estate, to anticipate problems and dangers, as well as opportunities, to decide upon the intelligent and prudent thing to do, and then to go to the Chancellor to try to get the authority to do it.” Weems, Wills and Administration of Estates in Mississippi, 3rd Ed., §2.34, p. 65.

Absent directions in a will or court authorization, or specific authority by statute, the fiduciary has no authority to: bind the estate by contract such as a lease or note; purchase or sell real estate or any other asset; warrant title on behalf of the estate; borrow money for the estate; mortgage property of the estate; or even to continue a decedent’s business except to wind it up or as provided in MCA 91-7-173.

MCA §93-13-38 requires the guardian or conservator to improve the estate of the ward, and to “apply so much of the income, profit or body thereof as may be necessary for the comfortable maintenance and support of the ward and his family, if he have any, after obtaining an order of the court fixing the amount.” The duty of the fiduciary is to employ the funds in their hands profitably, and they may be liable on their bonds for failure to improve the estate.

Does that duty to improve the estate mean that there is a duty to invest?

The answer to that question, of course, is that every case is different, and several factors come into play, including:

  1. Whether the the amount of funds in excess of those needed in the immediate future to pay claims and administration expenses, and in the case of wards, the necessary, authorized expenses, make investment practical;
  2. The economic conditions in the markeplace;
  3. Whether in the case of a decedent’s estate that it will be open for a length of time that would make investment practical.

In the case of McNeil v. Hester, 753 So.2d 1075 (Miss. 2000), the court held that the fiduciary has no duty to invest because MCA 91-13-3 because that statute uses the permissive may rather than the mandatory shall.

But simply because there is no explicit statutory duty does not mean that not investing would be prudent. The fiduciary is under a duty to deal prudently with the estate, and in a given circumstance non-investment may be judged imprudent. MCA 91-13-3 says that the ” … fiduciary shall exercise the judgment and care under the circumstances then prevailing which men of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of the capital.”

MCA 91-13-3 and -5 allow certain investments to be made without specific authority of the court, giving the fiduciary some flexibility to park funds until a more prudent investment, if any, can be made. Those investments, unless prohibited by court order, include: time certificates of deposit; savings or other interest-bearing accounts of any state or national bank whose main office is located in Mississippi, and whose deposits are FDIC-insured; any state or federal savings and loan association whose main office is located in Mississippi, and the deposits of which are FSLIC-insured. Not included are credit union accounts, online banks, e-trade, Schwab or Fidelity, or the mayonnaise jar buried in the back yard.

Whether a given investment is prudent was the issue in the COA case of In re Estate of McGee, 982 So.2d 428 (Miss.App. 2007), in which the court held that, where the decedent had invested in the stock market for many years and the fiduciary had received his portfolio, which he put in the control of a reputable broker pursuant to court order, the fiduciary was not liable to the heirs when the portfolio declined in value after 9-11-01. The court pointed out that “administrators are not insurers or guarantors of the estate’s assets.” Citing Harper v. Harper, 491 So.2d 189, 198 (Miss. 1986).

So what exactly is and is not prudent? For guidance in addition to particular case law you might want to look at the Mississippi Uniform Prudent Investor Act, MCA 91-9-601- et seq., which actually applies to trustees, but would certainly be persuasive authority for any court to consider in weighing the prudence of any other fiduciary. Section 603 sets out factors for the court to consider as a standard of care. Other sections in the law address the duties of diversification, loyalty, impartiality, reasonability of cost, and care in delegation of management responsibility.

The attorney representing a fiduciary has a duty to advise him or her of the responsibilities involved, and to make sure that the fiduciary is acting prudently and in compliance with the law. The subject is more complex than the scope of this post, so consider this an introduction and prompt to study it in adequate depth to be of service to your clients.

[Much of the information here is derived from a presentation by Bob Williford, Esq. to the chancery judges last April]

FIVE MORE MISTAKES THAT FIDUCIARIES MAKE

July 24, 2012 § 3 Comments

We talked here about some mistakes that fiduciaries make. Continuing the hit parade, here are five more:

  1. Failure to account timely and properly. All expenses and receipts must be accounted for annualy or more frequently if ordered by the court. UCCR 6.03-6.06 detail the voucher requirement. There’s a right way and a wrong way to file an accounting. There is a checklist for doing an accounting here. You can read more about accounting and vouchers here.
  2. Failure to seek and heed legal advice.The UCCR impose a heavy duty on attorneys to advise and supervise the client-fiduciary in probate matters. The burden can be so onerous that I call it the “yoke of probate.” You can not blithely turn your fiduciary loose to figure it out for himself or herself. You have a duty to the court and the beneficiaries. A case showing how severely the Supreme Court views the joint duty of the attorney and fiduciary-client, read this post on the case of Matthews v. Williams. And a case showing the disastrous consequences of an attorney’s complicity in the fiduciary’s malfeasance, check out this post on the ongoing Hinds county trainwreck involving (soon-to-be-former) attorney Michael J. Brown. Make sure your fiduciary knows what the do’s and don’ts are. Put together an instruction sheet and have your client sign a copy to keep in your file for your protection. There is a reason that UCCR 6.01 requires every fiduciary to have an attorney. It’s because the attorney is the arm of the court who is responsible to supervise the fiduciary and make sure everything is being done properly. As I have said many times before, if that is an unpalatable concept for you, simply refuse to handle probate matters.
  3. Failure to get authority for investment of the ward’s estate.Your fiduciary is obligated to increase the ward’s estate, if possible. The courts apply the prudent investor standard, which can be second-guessed. There are a few ultra-safe investments that the fiduciary may make without prior approval, per MCA 91-13-3, including time CD’s, savings accounts, and most FDIC- and FSLIC-insured accounts (Note: to my knowledge, credit union accounts do not qualify). Only problem is that in this era, those accounts produce interest rates closer to zero than anything that would actually increase the ward’s estate. So the prudent investor has to look to more speculative investments, which are allowed under MCA 91-13-3 and -5. You should have your investment plan approved in advance by the court, with adequate supporting documentation so that anyone looking at it later will be able to see that the court had a valid basis for its order. Again, one of the transgressions in Matthews v. Williams was the fiduciary’s helter-skelter, unapproved investment scheme.
  4. Failure to give proper notice to close.MCA 93-13-77 requires that the final account in a conservatorship or guardianship must be on file for 30 days, and the ward must have have 30-days notice and an opportunity to inspect it and file any objection. A ward who is a competent adult may waive the notice and accounting. A ward under 21, however, must be served with process and may waive nothing. In estates, every beneficiary or heir must either join in the accounting, or waive process, or be served with process and given an opportunity to be heard.
  5. Failure to keep the attorney and court informed of contact information. Make sure your fiduciary knows and understands that you need to notified immediately of any change of address, telephone number and other contact information. It’s a good idea to get the names and telephone numbers of a couple of local relatives and/or long-standing friends who can help you locate a fiduciary who has wandered off.

There are some simple strategies to avoid these missteps. Here is a link to Five Tips to Improve Your Probate Practice that outlines some things you can do. The primary attribute you need, though, is vigilance. Set up procedures in your office to get the information you need, to instruct and advise your fiduciary, and to keep in touch. It could keep you out of some costly trouble.

FIVE MISTAKES THAT FIDUCIARIES MAKE

July 18, 2012 § 7 Comments

  1. Failure to file an inventory. In every type of probate matter, it is required that an inventory be filed, usually within 90 days of appointment of the fiduciary. Often the will waives inventory, but the better attorneys I know always file an inventory, whether waived or not. Why? Because the inventory (a) sets a base line for later accountings, and (b) covers the lawyer’s rear from later claims by other heirs or beneficiaries that items are missing. Better to get those matters out up front where they can be dealt with than to let it hold up closing the estate. MCA 93-13-33 provides that an inventory must be filed within three months of appointment in a guardianship or conservatorship, and even requires an annual inventory. A guardian who fails to do so may be removed and be liable on his or her bond.
  2. Failure to publish notice to creditors. This requirement is mostly overlooked in guardianships and conservatorships. MCA 93-13-38(1) expressly states that “All the provisions of the law on the subject of executors and administrators, relating to settlement or disposition of property limitations, notice to creditors, probate and registration of claims, proceedings to insolvency and distribution of assets of insolvent estates, shall, insofar as applicable and not otherwise provided, be observed and enforced in all guardianships.” And remember that the statutory affidavit of creditors must be filed before publication of the notice to creditors. MCA 91-7-145(2) says that “Upon filing such affidavit …” it shall be the duty of the fiduciary to publish. An affidavit filed after the publication is a nullity.
  3. Failure to get authority of the court for expenditures. Perhaps the most pervasive error of fiduciaries. MCA 93-13-38 requires the conservator to improve the estate of the ward, and to “apply so much of the income, profit or body thereof as may be necessary for the comfortable maintenance and support of the ward and his family, if he have any, after obtaining an order of the court fixing the amount” [emphasis added]. Every expenditure must be approved in advance. Emergency expenditures may be ratified, but only if properly proven to be for the ward’s benefit, and properly supported by vouchers. Caution: as set out below, self-dealing expenses may be neither approved or ratified.
  4. Failure to keep the ward’s estate separate and to avoid self-dealing. It often happens that a son or daughter is appointed to serve as conservator of momma’s or daddy’s estate. The child simply adds his or her name to the parent’s account and proceeds from there. This complicates matters because that joint account belongs 100% to each person whose name is on the account, and becomes the property of the survivor on death. That is certainly not an appropriate or even legal arrangement for a guardian or conservator. The fiduciary in every kind of probate matter needs to open a separate estate, guardiandhip or conservatorship bank account, and make all financial transactions through it and through it alone. MCA 91-7-253 prohibits the fiduciary from paying herself any money from the ward’s estate without prior court approval, and loans to the fiduciary and family members are prohibited also. The statute says that the court can not ratify or approve such payments. If the fiduciary has some expense that needs to be reimbursed, make sure the fiduciary has proper documentation and petition the court for authority. Don’t expect a cash payment or check made out to cash to be approved without abundant supporting documentation.
  5. Failure to get court permission to move the ward to another county. It’s prohibited to relocate the ward to a county other than the one in which the fiduciary was appointed, unless approved in advance by the court. MCA 93-13-61.

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