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.

A COMPENDIUM OF ESTATE POSTS

July 5, 2011 § 6 Comments

UPDATED CHECKLIST OF CHECKLISTS

May 27, 2011 § 5 Comments

Proving your case by proving certain factors is a fact of legal life in Mississippi.  I’ve referred to it as trial by checklist.  If you’re not putting on proof of the factors when they apply in your case, you are wasting your and the court’s time, as well as your client’s money, and you are committing malpractice to boot. 

Many lawyers have told me that they print out these checklists and use them at trial.  I encourage you to copy these checklists and use them in your trial notebooks.  And while you’re at it, you’re free to copy any post for your own personal use, but not for commercial use.  Lawyers have told me that they are building notebooks tabbed with various subjects and inserting copies of my posts (along with other useful material, I imagine).  Good.  If it improves practice and makes your (and my) job easier and more effective, I’m all for it. 

Here is an updated list of links to the checklists I’ve posted:

Attorney’s fees.

Attorney’s fees in an estate.

Adverse possession.

Child custody.

Closing an estate.

Doing an accounting in a probate matter.

Grandparent visitation.

Equitable distribution.

Income tax dependency exemption.

Modification of child support.

Periodic and rehabilitative alimony.

Lump sum alimony.

Separate maintenance.

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.

CHECKLIST FOR CLOSING AN ESTATE

September 27, 2010 § 20 Comments

  • _____ Judgment opening the estate or admitting will to probate is filed, and there is no contest.
  • _____ Oath of Executor/Administrator filed. 
  • _____ The Executor/Administrator has properly filed his or her bond, or it was waived by the will or by sworn petition of all heirs with entry of a court order authorizing the waiver.
  • _____ Letters Testamentary or of Administration issued.
  • _____ The affidavit of known creditors required by MCA § 91-7-145 was properly executed by the Executor/Administrator and filed before publication to creditors.
  • _____ Publication of Notice to Creditors was made in “some newspaper in the county” that meets the criteria in MCA § 13-3-31, for three consecutive weeks, and it has been more than ninety days since the first publication.
  • _____ Inventory and appraisement were done and timely filed, or were waived by the will or by all heirs by sworn petition with order so waiving.
  • _____ All accountings were timely filed and approved by court order (other than the final accounting, which is now before the court), or waived by the will or excused by the court.
  • _____ In the case of an administration, publication for unknown heirs has been completed, and a judgment determining heirs has been presented, or will be presented in advance of presenting the final accounting.
  • _____ All interested parties to this estate have been served with the petition to close and all other closing documents, including the final account, and they have joined in the petition or have been duly served with a Rule 81 summons, and there is a proper return or properly executed waiver or joinder for each interested party.
  • _____ All probated claims have been paid, and evidence of such payment is in the court file, or the probated claims will be paid in the course of closing the estate, and a final report will be filed evidencing payment.
  • _____ The attorney’s fees and expenses, as well as those of the Executor/Administrator have been disclosed to all interested persons, and they have no objection.

WAIVING ACCOUNTING IN ESTATES

June 28, 2010 § 2 Comments

[This information comes from the outline of a presentation made by Bob Williford to the Chancery Judges Spring Conference earlier this year.  Used with  his permission.]

Intestate Estates:

  • An Administrator is required to file an annual account and a final account.  §§ 91-7-277 and 291, MCA. 
  • Although the statute does not provide an exception to the filing of a final account, a final accounting may be waived “on good cause shown.”  § 91-7-291, MCA.
  • The Administrator may be relieved of the duty of accounting by waiver of all parties interested in the estate of their right to an accounting.  34 C.J.S. Executors and Administrators, § 834.
  • If all of the heirs of the estate join in a request to waive annual account, the court would seem to have discretion to do so, but the court does have statutory authority to waive the final account. 

Testate Estates:

  • An Executor is required to file annual accounts and a final account.  §§ 91-7-277 and 291, MCA.   
  • case law, however, recognizes that a testator may waive the requirement of both annual and final accounts.  Harper v. Harper, 491 So.2d 189 (Miss. 1986);  Will of McCaffrey v. Fortenberry, 592 So.2d 52 (Miss. 1991); Matter of Holt v. Scott, 806 So.2d 296 (Miss. App. 2001).  BUT consider the following case:  Where accounting was waived in the Will, it was held that administration of the esatte was removed from jurisdiction of the court.  Bryan v. Bryan, 167 So.2d 56 (Miss. 1936). 
  • It is customary to waive accounting even if the Will does not expressly so provde, assuming all of the residuary beneficiaries join in the rtequest.
  • The court may require an account even if waived in the Will.  In re Estate of Carter, 912 So.2d 138 (Miss. 2005).  

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