Guardianship | The Better Chancery Practice Blog

FIVE TIPS TO IMPROVE YOUR PROBATE PRACTICE

April 19, 2011 § 7 Comments

Always accompany the executor, administrator, guardian or conservator to the bank or other financial institution to open the estate account. That way you can make sure that the funds are properly deposited into a restricted account, and that the fiduciary does what she is supposed to do.
Always ask that a duplicate bank statement be sent to you for the estate account. If the bank balks, direct that the bank statement be sent to you and not the fiduciary. Review each bank statement promptly when you receive it to make sure that no unauthorized disbursements are being made. Also, when the next accounting comes due — Voila! — you have a complete set of bank statements.
Have your secretary or paralegal call the fiduciary every couple of months to inquire how things are going, to remind of upcoming deadlines, and to ensure that the address and telephone info in your file is accurate. This is not only great client relations, it’s one of the best means possible to discover and address problems in their early stages.
Accompany your fiduciary to inventory that safe deposit box, and, if possible, bring a witness. It seems that there is often someone lurking in the wings ready to allege that there were all sorts of valuable items in there that the fiduciary is not accounting for.
Do an inventory even when one is not required. Inventory establishes the baseline for accounting. It also can help neutralize the claims of many disgruntled heirs and sideline-sitters.

THYME FOR LEA & PERRIN TO FILE AN ACCOUNTING FOR ROSEMARY

April 12, 2011 § Leave a comment

Examining an accounting in a probate matter such as an estate, guardiandhip or conservatorship can be a mind-numbing task: bank statement, bank statement, cancelled checks, bank statement, bank statement, cancelled check, bank statement, cancelled checks, receipt, receipt, receipt, bank statement, and on and on.

My day was considerably brightened recently as I pored over an annual account in a conservatorship: bank statement, cancelled checks, bank statement, receipts, cancelled checks, bank statement, barbecue shrimp recipe, bank statement, receipts.

Wait a minute … backspace … barbecue shrimp recipe? In an accounting? I never heard of such a thing.

My first reaction was that perhaps this seasoned lawyer had slipped it in there just to see whether I really read all that stuff (he should know better). Then it occurred to me that maybe he was trying to document the ward’s standard of living (but that might not be a good idea because the ward has since died, and this is after all a pretty artery-clogging recipe). Or maybe it was intended to be an inventory of the ward’s kitchen assets? I eagerly anticipated my meeting with counsel for an explanation.

When I met with the attorney, though, he disclaimed any idea how the recipe might have gotten into his court file. He professed to be as bumfuzzled about it as I was. Now, faced with such a mystery, lawyers generally blame their secretaries, but not this lawyer. He took the high road and blamed it on one of the deputy clerks. When the deputy clerk was confronted, however, she pointed the blame at the lawyer’s secretary, so the customary cycle of legal blame came around full circle to where it belongs.

But I was not looking to place blame. Not at all. I wanted instead to commend the perpetrator for adding some spice to what can be a mundane, tedious task. Alas, however, the identity of that heroic person shall apparently remain a secret.

Now, I know what you are wondering. You are wondering what exactly was this recipe that stirred up so much attention. Well, here it is, verbatim, from the court file …

BBQ Shrimp

2 Sticks melted butter

1/2 Cup Lea & Perrin’s

1 Tsp salt

1 Tsp black pepper

1/2 Tsp cayenne pepper

2 Tsp garlic puree

1 Tsp thyme

2 Tsp rosemary

1/2 Tsp celery salt

1 Tsp olive oil

Mix and cook, not boil, let cool.

Put shrimp [quantity not provided] in dish w/mix, ref. over night, cook at 350, stir every 4 to 5 min and turn shrimp when 1/2 way done, taste after 20 min. cook about 30.

It occurs to me that if every lawyer would file a recipe with annual and final accounts, we could at length compile a cook book, perhaps with a catchy title like Cooking from the Court Files, or Entertaining Intestacy, or Recipes De Bonis Non. We could organize it so that conservatorship accounts would be accompanied by seafood recipes, guardianships would have entrees and appetizers, intestate estates would have meat dishes, testate estates would have breads and breakfast recipes, and trusts — of course — would include desserts. I think I’ll see if Judge Mason will consider a local rule to that effect. Or instead, maybe we can implement this idea across the state, sell the books, and fund a judicial pay raise. Winner, winner, chicken dinner.

CHECKLIST FOR DOING AN ACCOUNTING IN A PROBATE MATTER

April 11, 2011 § 16 Comments

_____ State the time period covered by the accounting, starting with the date of the last accounting, or if a first account with the date the estate, guardianship or conservatorsip was opened.

_____ List all assets of the estate as of the ending date of the last accounting. (MCA §91-7-277, §91-7-93, §93-1333, §93-13-67, and §93-113-259 and UCCR 6.03).

______ List the date, source, and amount of each item of income since the last accounting. (MCA §91-7-277, and §93-13-67).

______ Total the income and state a total.

______ List the date, payee, explanation or description, amount, and authority (the date of each authorizing court order) for each disbursement since the ending date of the last accounting. (MCA §91-7-277, 91-7-279, §93-13-67p, and §93-13-71 and UCCR 6.04 and 6.05).

______ Attach all documents supporting all income and disbursements. This is the “voucher” requirement that was previously posted about here. The required documentation includes ALL statements of any accounts or investments showing income or disbursements. This may also include canceled checks and receipts. (See statutes and rules cited above).

______ Total the disbursements and state the totals.

______ List and explain for all non-financial assets that appeared on the previous accounts, but are no longer in the control of the fiduciary.

______ A request for payment for the fiduciary including a bill or itemization to support request. (MCA §91-7-299 and §93-13-67 and UCCR 6.11).

______ A request for attorney fees, including a bill or itemization to support said request. (MCA §91-7-281 and §93-13-79 and UCCR 6.12).

______ Close with a summary calculation of the value of the estate coming into the hands of the fiduciary at the opening of the accounting period, a total of the income, a total of the disbursements, and a total balance in the fiduciary’s control that will be the beginning figure for the next account.

______ Have the fiduciary sign and swear to the accounting. (MCA §91-7-277 and §93-13-37 and UCCR 6.02).

Thanks to Jane Miller, Senior Staff Attorney for the 12th District.

TRIAL BY CHECKLIST: ATTORNEY’S FEES IN AN ESTATE

March 16, 2011 § 15 Comments

A practice tip about trial factors is here.

I previously posted here about what it takes to comply with the UCCR to document your claim for attorney’s fees in an estate.

Ordinarily, attorney’s fees claims are governed by the factors in McKee v. McKee, but in an estate, the factors are slightly, but significantly, different.

In estate matters, the proper factors to consider in determining reasonable attorney’s fees are:

The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
The fee customarily charged in the locality for similar legal services;
The amount involved and the results obtained;
The time limitation imposed by the client or by the circumstances;
The nature and length of the professional relationship with the client;
The experience, reputation and ability of the lawyer or lawyers performing the services; and
Whether the fee is fixed or contingent.

In re Estate of Johnson v. Moore, 735 So. 2d 231, 237 (¶27) (Miss. 1999) (quoting Moreland v. Riley, 716 So. 2d 1057, 1062 (¶16) (Miss. 1998)).

In the case of Catchings v. Estate of McCullough, decided March 15, 2011, the COA reviewed a chancellor’s decision that reduced attorney’s fees in an estate. The attorney claimed $88,000 in fees in connection with a $300,000 estate, but the chancellor found that the amount of work done did not warrant that amount of fees and reduced the fee award to $36,000, based on application of the Johnson factors stated above. The COA found no abuse of discretion and upheld the chancellor’s determination.

If you have an exceptionally large claim for attorney’s fees in an estate, it would be a good idea to attach your and a fiduciary’s affidavit itemizing the time spent and addressin each of the Johnson factors.

MORE PROOF THAT CUTTING CORNERS DOES NOT PAY

March 8, 2011 § 1 Comment

Tangela Berry and Ricky Banks were guardians of their son Ryheim Banks. In June, 2004, they filed suit in circuit court against several medical defendants alleging negligence.

They reached a settlement with one of the defendants, Laura Carpenter, for $25,000, to be apportioned 1/3 each to Berry, Banks and Ryheim, after deduction of a $10,000 attorney’s fee.

When the settlement was presented to the chancellor, the guardians’ attorney did not call any witnesses. Instead, he made an announcement to the court that Carpenter’s involvement was “negligible,” and that the settlement was “appropriate.” He did, apparently, question Berry and Banks about whether they understood they were releasing their claims against the defendant, which they did, and whether the were following the advice of their attorneys in settling Ryheim’s claim, which they also did. There was no testimony regarding the nature or extent of the injuries, or the substance of the claims, or the damages incurred. The chancellor signed a judgment approving the settlement on August 5, 2005, including the language that the settlement was a “fair and reasonable settlement of a doubtful claim and it is in the best interest of the minor and all others.”

In July 2008, the guardians again appeared in court with new counsel asking the chancellor to set aside the prior settlement because the former attorney had not prosecuted the claim and had done no discovery. They said that they had learned that Carpenter had a $1,000,000 insurance policy that would have afforded coverage that was not disclosed to them at the time of the settlement. Their motion was brought under MRCP 60(b).

The chancellor did set aside the 2005 judgment pursuant to MRCP 60(b), finding that there was insufficient evidence at the 2005 hearing to establish that the settlement was fair and reasonable and in the best interest of the minor.

Carpenter appealed, charging that the trial court erred: in not including specific findings of fact and conclusions of law in his order; and that it was an abuse of discretion to set aside a judgment under MRCP 60 after three years had elapsed from the date of the judgment.

In the case of Carpenter v. Berry, et al., decided February 10, 2011, the Mississippi Supreme Court upheld the chancellor’s ruling.

As for the claim that the conclusions were unsupported, the appellate court found that the chancellor’s findings were sufficient, considering that the matter was not complex.

With respect to the abuse of discretion claim, the court noted that the chancellor did not specify that part of MRCP 60 under which he proceeded. The court found MRCP 60(b)(5) applicable since that rule allows a judgment to be set aside where “it is no longer equitable that the judgment have prospective application.”

The court also found MRCP 60(b)(6) applicable, since it provides that the chancellor may grant relief “for any other reason justifying relief from the judgment.” MRCP 60(b)(6) “is reserved for extraordinary circumstances,” and is “a grand reservoir of equitable power to do justice in a particular case. Briney v. USF & G, 714 So.2d 962, 966 (Miss. 1998).

The Supreme Court noted that the trial judge must consider several factors in determining whether to grant 60(b)(6) relief:

That final judgments should not lightly be disturbed;
That a 60(b)(6) motion is not to be used as a substitute for an appeal;
That the rule should be liberally construed so as to achieve substantial justice;
Whether the motion was made within a reasonable time;
Whether the movant had been afforded a fair opportunity to present claims or defenses, if the judgment was rendered after a trial on the merits;
Whether there are any intervening equities that would make it inequitable to grant relief; and
Any other factors relevant to the justice of the judgment under attack.

[Note: one factor relating solely to dafault judgments was omitted by the court, with a reference] M.A.S. v. Miss. Department of Human Services, 842 So.2d 527, 530 (Miss. 2003).

In this particular case, the Supreme Court found that this was no ordinary 60(b) case because it involved the rights of a minor under a guardianship. The court said:

“It is the inescapable duty of [chancery] court and or the chancellor to act with constant care and solicitude towards the preservation and protection of the rights of infants and persons non compos mentis. The court will take nothing as confessed against them; will make for them every valuable election; will rescue them from faithless guardians, designing strangers and even unnatrual parents, and in general will and must take all necessary steps to conserve and protect the best interest of these wards of the court. The court will not and can not permit the rights of an infant to be prejudiced by a waiver, or omission or neglect or design of a guardian, or of any other person, so far as within the to prevent or correct. Griffin, Chancery Practice, §§ 45, 360, 530, 533. All persons who deal with guardians or with courts in respect to the rights of infants are charged with the knowledge of the above principles, and to act contrary thereof at their peril.”

The court also noted that the procedures prescribed for settling a minor’s claims as set out in MCA § 93-13-59 and UCCR 6.10 had not been followed in the original proceeding before the court.

The timeliness claim was disposed of by finding that timeliness under 60(b)(6) depends on the facts of the case, and that the chancellor did not abuse his diecretion in this one.

Finally the Supreme Court at ¶ 22 held that “The chancellor properly exercised the discretion afforded by Rule 60(b)(6) by finding that the need to fairly protect the ward’s interests outweighed the need for finality.”

Moral of the story: Don’t take shortcuts; faithfully follow the rules and the statutes. It only takes a little more effort and time to do it right. If a proper record had been made originally, that order might have been a lot more difficult to attack. You can find an outline for how to handle a minor’s settlement here.

PARENTAL LIABILITY

January 26, 2011 § 3 Comments

When a child commits a tort, can the parents be held responsible to pay the damages?

MCA § 93-13-2 sets out the rules for when the parents of a minor will be held liable for the acts of the minor, and the limits on that liability. Here are the principal points:

The statute states that “Any property owner …” may recover damages. Does this limit the scope of the statute to actions for damage to property, or are personal injury claims included? It would seem that damage to property is what was contemplated, since subsection (1) specifically refers to any act of the minor that ” … damages or destroys property belonging to such owner.” Subsection (2) refers to ” … damages [not injuries] to [sic] which such minor or other person would otherwise be liable.
The limit of recovery is $5,000, plus “necessary court costs.”
The statute applies to minors under the age of 18 and over the age of 10.
The act of the minor must have been malicious and willful. Purely negligent acts or mere carelessness are not included.
The statute does not apply to a parent whose “parental custody and control” have been removed by court order or decree. Thus, where the child’s custody is awarded by court order to one parent, the non-custodial parent will not be subjected to liability. This raises an interesting point when the child commits a maliciously destructive act while on visitation with the non-custodial parent, since visitation time is tantamount to custodial time. Cox v. Moulds, 490 So.2d 866, 870 (Miss. 1986). The language of the statute appears to hinge on the parental control, so that the parent who should be in control of the child at the time of the damage is the parent who will face liability. When the child is placed by court order in the control of a non-parental guardian, that guardian will be the one to deal with the liability issue.
The statute does not limit any other recovery under any other applicable provision of law.
The purpose of the law is both to authorize recovery from parents in situations where they would not otherwise be liable, and to limit their liability.

The act is in derogation of the common law, and therefore must be strictly construed. I do not find any case law construing this statute or interpreting its applicability.

PUBLICATION TO CLOSE AN ESTATE: A STATUTE-RULES CONFLICT

January 25, 2011 § 2 Comments

MCA § 91-7-295 addresses summons or publication for a final account in an estate, conservatorship or guardianship. The entire statute reads as follows:

The final account so presented with the statement as to parties, shall remain on file, subject to the inspection of any person interested. Summons shall be issued or publication made for all parties interested, as in other suits in chancery court, to appear at a term of court, or before the chancellor in vacation, not less than thirty (30) days from the service of the summons or the completion of the publication, and show cause, if any they can, why the final account of the executor, administrator, or guardian should not be allowed and approved. [Emphasis added]

MRCP 4 (c) (4) (B), which governs procedure in “suits in chancery court,” states: “The defendant shall have thirty (30) days from the date of first publication to appear and defend.”

So which is it? Thirty days from completion of publication as the statute says? Or thirty days from first publication as the rule says?

The Order Adopting the Mississippi Rules of Civil Procedure issued by the Supreme Court on May 29, 1981, expressly states that ” … in the event of a conflict between these rules and any statute or court rule previously adopted these rules shall control.”

That language would seem to dispose of the matter, but for MRCP 81 (a) (8), which limits the applicability of the rules to matters under MCA Title 91. There is also the fact that the law of executors and administrators is entirely a creature of statute, which requires strict application.

What should you do? I would follow the statute. Doing so does not run afoul of MRCP 4, and actually allows more time for interested parties to act. I would also publish returnable to a day certain more than thirty days after the completion of publication, so there is no doubt on the part of those summoned as to the date by which they are required to act. If you do not follow the statute, you run the risk that a disgruntled party may file suit at a later point attacking your accounting on the ground that the court lacked jurisdiction to proceed.

Thanks to Chancellor Gene Fair for pointing this out.

EVENTS THAT TERMINATE GUARDIANSHIPS

November 15, 2010 § 2 Comments

We’ve already discussed how to close a guardianship, but what exactly are the events that trigger closing it?

MCA § 93-13-75:

The powers of a guardian for a minor cease when the ward attains the age of 21.

The chancellor may, in his or her discretion, terminate the guardianship after the ward attains the age of 18.

When the funds and personal property of the ward do not exceed $2,000, and there is no prospect of further funds coming into the guardianship, the court may terminate the guardianship and may impose conditions and restrictions for the deposit and expenditure of the funds. This provision applies not only to guardianships for minors, but also to guardianships for a “person of unsound mind, or convict of felony.”

MCA § 93-13-125:

In a guardianship for a person of unsound mind but not “properly adjudged mentally unsound,” the court may terminate the guardianship “If at any time it be made to appear to the satisfaction of the court that such person has been restored to sanity, such guardianship may be terminated and ended as now provided by law.”

MCA § 93-13-133:

If the court is satisfied that a person of unsound mind is restored to sanity, or that an habitual drunkard, or habitual user of cocaine, or opium or morphine has “sufficiently reformed to justify it …” the court may terminate the guardianship.

MCA § 93-13-135:

The guardianship of a convict of felony ceases when the term of imprisonment expires or the convict dies.

MCA § 93-13-151:

Guardianship of a person who is found in need of mental treatment shall end when the ward is “restored to reason” and is so adjudicated by a court of competent jurisdiction.

MCA § 93-13-161:

If a guardian has been appointed for the estate of a person in the armed forces or a merchant seaman who is “officially reported or listed as missing in action, or interned in a neutral country, or beleagured, besieged, or captured by an enemy,” the guardianship may be terminated as follows:

At any time upon petition signed by the absentee, or on petition of an attorney-in-fact acting under power of attorney granted by the absentee, the court shall direct the termination of the guardianship and the transfer of all property held thereunder to the absentee or the designated attorney-in-fact. Likewise, if at any time subsequent to the appointment of a guardian it shall appear that the absentee has died and an executor or administrator had been appointed for his estate …”

MCA § 93-13-77:

” … it shall be made the duty of an executor or administrator of a deceased guardian to make final settlement in a of their testator’s or intestate’s guardianship accounts in the chancery court in which the same mey be pending …”

It is obvious that a guardianship terminates on death of the ward. In such a case, an estate should be opened, a final accounting filed and noticed, and the assets transferred to the estate once the guardianship is closed.

A guardianship solely of the person terminates on emancipation of the ward, or when it is shown to the court no longer to be necessary.

SOME THINGS YOU MAY NOT KNOW ABOUT GUARDIANSHIPS

November 10, 2010 § 2 Comments

Here are some things you may not already know about guardianships. Some of them have teeth that can draw blood if they catch you unawares …

MCA § 93-13-38, provides 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, as far as applicable and not otherwise provided, be observed and enforced in all guardianships.”
MCA § 93-13-33, requires that the guardian return an inventory within three months of the appointment, and states: “Any guardian who shall fail to return inventories may be removed and his bond be put in suit, unless he can show cause for the default.”
When closing out a guardianship, the requirements of MCA § 93-13-77, must be satisfied. That section requires that a final accounting filed, and that the ward be summoned and given notice to be and appear before the court on a day not less than one month after the date that the summons is served or after completion of publication, to show cause why the accounting should not be approved. The accounting can not be approved earlier than one month after completion of process. All the requirements to close a guardianship are here.
When a guardian has more than one ward, each ward’s business must be accounted for separately. MCA § 93-13-69.
A child 14 or older has a statutory right to choose his or her guardian. If the ward is over 14, you should have the child join in the petition.
Guardianship of a minor ceases by operation of law at age 21, and, in the discretion of the Chancellor, at age 18. The guardianship may also be terminated by order of the court at any time that the estate has a value less than $2,000 and no further funds or property are anticipated to come into the guardian’s hands. MCA § 93-13-75.
Any claim for a guardian’s fee must include the information required in Uniform Chancery Court Rule 6.11.
A “solicitor’s fee” (MCA § 93-13-79) may be allowed for the attorney, and the claim for it must be supported by an itemized statement of services rendered in the same form as that required for the guardian’s fee, plus the information required in Rule 6.12 of the Uniform Chancery Court Rules.

DON’T FORGET THE THIRD DEGREE IN ADULT GUARDIANSHIPS AND CONSERVATORSHIPS

October 27, 2010 § 1 Comment

Frank Lewis appeared personally in court with his attorney and joined in a request that his son be appointed his conservator. The idea for the conservatorship arose out of some financial dealings by other members of the family who had powers of attorney. After a hearing with no record, the Chancellor ruled that a guardian should be appointed instead, due to Frank’s physical infirmities and need for regular kidney dialysis. The judge appointed Frank’s then attorney as guardian of his estate, and his son as guardian of the person, and cancelled the powers of attorney.

Frank retained another attorney and appealed the Chancellor’s decision.

The Court of Appeals reversed the trial court and remanded for further proceedings, In The Matter of The Guardianship of the Estate of Frank Lewis, decided October 5, 2010.

There are several interesting arguments made by both sides, and I commend the decision for your reading, but the issue of interest in this post is that proper notice of the hearing was not given.

There is no question that Frank Lewis was present at the hearing with his retained attorney. Ordinarily, a party’s presence in court would submit him voluntarily to the jurisdiction of the court. In order to establish a guardianship, however, MCA § 93-13-281 requires that the proceedings shall join as defendants two of his adult kin within the third degree by proper process, joinder or waiver. The petition did name two adult relatives within the third degree, but there is no evidence in the record that they were properly summoned, joined, waived process or personally appeared before the court. The court of appeals reversed and remanded to allow proper notice to two relatives within the third degree and for the court to hear evidence whether Frank does need a guardian.

The moral of the story is that guardianships and conservatorships are creatures of statute, and the statutes must be strictly complied with. If there are two relatives within the third degree, you must join them. If there are not two relatives within the third degree, the court is required to appoint a guardian ad litem for the infirm individual.

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