How Not to Prove Attorney’s Fees

November 24, 2014 § Leave a comment

Allene Crowell died in 2006. Her two surviving daughters, Caron Crowell and Jackie Trotter, were named co-executrixes.

Jackie filed a complaint charging that Caron had unduly influenced Allene to gift her an unfair share of Allene’s estate, and with converting the mother’s assets.

The chancellor did find undue influence and granted the estate a judgment against Caron. She filed a R59 motion, based on which the court added $100,000 to the judgment, on its own motion, finding that Caron had spent more than $100,000 of estate assets “on more than 40 lawyers” looking for legal opinions to support her position. The court ruled her actions to be a dissipation of estate assets.

Caron appealed, and the MSSC affirmed the chancellor’s ruling on the undue influence and judgment, but reversed on the $100,000 addition for attorney’s fees.

Here’s what Justice Randolph said for the unanimous court in the case of Estate of Crowell: Crowell v. Trotter, handed down November 6, 2014:

¶20. Caron argues that the trial court’s finding that she spent $100,000 of the estate’s money on attorney fees is contrary to the facts in evidence. Caron further argues that ordering her to pay $100,000 increases the value of the estate by $100,000 over the value established by Jackson.

¶21. We find that the trial court erred in sua sponte, post-judgment, increasing the judgment by $100,000 for Caron’s estimated expenditures on attorney fees. The record is inconclusive about both the amount of money spent on attorney fees, and from whose money the funds to pay the legal fees came. The trial court noted that Caron testified that the money came from her own funds, which was the only evidence presented.

¶22. At trial, Caron testified that she had seen at least forty-two lawyers. When asked how much she had spent on legal fees, Caron testified “It’s a lot.” When asked if she had paid for legal fees out of her own money, Caron responded:

A. Well, it depends – as long as Mother was alive, I think I used her funds. I didn’t spend that much really. You know, I was trying to get good legal advice for her and get her totally protected. A lot of the attorneys didn’t charge. But I don’t know how much. I don’t know how much it was. I don’t think it was all that much. Then since her, I have paid my own attorneys fees, and it’s been a lot. I – you know, there’s – it’s been a lot.

Q. Well, give me an estimate.

A. $100,000, I think.

Q. In attorney fees?

A. Yes, that’s a guesstimate, estimate.

¶23. The record does not disclose substantial evidence to support a $100,000 increase in judgment. Caron “guesstimated” the attorney fees to be around $100,000. No testimony of bank statements, canceled checks, bills from attorneys, or any other form of evidence was offered to support or contest Caron’s “guesstimate.”

¶24. If Caron actually spent $100,000 on legal fees, the only testimony before the court was that she paid most of the fees out of her own pocket. The $100,000 “guesstimate” followed her statement that she has paid “a lot” of her “own” legal fees. After Caron testified that she had spent a lot of her own money, counsel asked Caron for an estimate. “$100,000.00, I think” was responsive to a question asking how much of her own money she had spent, which is not substantial evidence to support the trial court’s finding.

*   *   *

¶26. The record lacks substantial evidence supporting that Caron actually spent $100,000 of the estate’s money. Caron’s ambiguous and unsupported $100,000 “guesstimate” is not substantial evidence. We find such a conclusion is in error.

No surprise here. The reason I am pointing this out is that Caron’s testimony is not too far off what I hear sometimes from witnesses on the issue of attorney’s fees. Vague, indefinite, ballpark figures, unsubstantiated with proof of payment and other supporting evidence, is simply not adequate to prove a claim for attorney’s fees that will stand up on appeal.

Non-marital Children, Estates, and the Statute of Limitations

November 18, 2014 § 4 Comments

Boyce Elmore died in 2000. His widow, Kathleen, opened an administration and was appointed administrator in 2002.

In 2010, more than ten years after Boyce Elmore died, Cedric Williams filed a paternity action in an effort to establish a claim to recover from Boyce’s estate.

The version of MCA 91-1-15(3)(c) in effect at the time provided that a non-marital child might file an action to establish paternity ” … within one (1) year of the death of the intestate or within ninety (90) days after the first publication of notice to creditors to present their claims, whichever is less …” Since Boyce’s estate had not been opened in the first year following his death, the publication provision was inapplicable.

Faced with the issue of Cedric’s timeliness, the chancellor ruled that, because Kathleen had failed to give Cedric notice of the estate, the statute of limitations had been tolled, and his action was timely.

The COA reversed the chancellor’s decision that failure to give Cedric notice tolled the statute of limitations, but would not apply the one-year statute because the appellant had failed to raise the issue on appeal.

MSSC granted cert.

In In the Matter of the Estate of Elmore: Jamison v. Williams, handed down November 6, 2014, the court affirmed the COA’s decision, but held that the appellant had “squarely presented” the issue before the chancellor on appeal and at trial by raising the issue of application of SOL under 91-1-15, so that the one-year statute did apply, and barred Cedric’s suit.

Based on all of this, I believe it is fair to say that failure to give notice to a purported non-marital heir will not toll the statute under the language in effect before 2005. The Mississippi legislature resolved the question in 2005 by adding language to MCA 91-1-15 that ” … this one-year limitation shall be self-executing, and may not be tolled for any reason, including lack of notice.”

Some Language to Add to your Fiduciary Orders

June 17, 2014 § 7 Comments

In this district we have had a problem with fiduciaries having been appointed and never qualified by taking the oath and posting any required bond, and consequently not having Letters issued.

A fiduciary has no authority to act unless and until that person has qualified, which requires taking the oath, posting any required bond, and having Letters issued.

In one case in my court the person appointed used the order appointing him, without Letters of Administration ever having been issued, to sell a car, and he closed a couple of bank accounts. He sold the car and pocketed the money; who knows what he did with the funds. The lawyer who opened the estate spent a considerable sum out of his own pocket trying to recover the estate’s money. Not surprisingly, the perpetrator was judgment proof and can no longer be found on this planet.

In another case, a woman (not the mother) testified that she was guardian of the child, but when I ordered the insurance attorney to get the guardianship file, it showed that only an order appointing her had been entered, and she had never taken an oath or posted a required $10,000 bond. Incidentally, she testified that her lawyer had told her that the order was adequate, and she proceeded to use that apparent authority to negotiate a settlement of the child’s claim.

We came up with some language that we now require all attorneys to include in their orders opening estates, guardianships, and conservatorships. You may find this language useful in your own district, and even if you find it superfluous, you just might conclude that there’s no harm in including it.

Here it is:

IT IS FURTHER ORDERED AND ADJUDGED that if the fiduciary has failed to qualify by posting the required bond, if any, taking the oath, and having appropriate Letters issued as required by this order and the laws of the State of Mississippi within thirty (30) days of entry of this order, then the Chancery Clerk is hereby ordered and directed to notify the court immediately of such failure, and the court shall enter an order dismissing this civil action without prejudice and without further notice to the fiduciary, or attorney of record for the fiduciary, or any other parties who have entered an appearance in this civil action.

IT IS FURTHER ORDERED AND ADJUDGED THAT THIS ORDER DOES NOT AUTHORIZE [Name] TO ACT AS THE FIDUCIARY FOR [Name of ward or decedent] UNLESS VALID LETTERS [Testamentary, or of Administration, or of Guardianship, or of Conservatorship] ARE ATTACHED HERETO.

IT IS FURTHER ORDERED AND ADJUDGED that persons who use or accept this order without the attached Letters as court authority to act or conduct the affairs of the [ward or decedent] shall be subject to sanctions by this court.

Pot of Gold … NOT

April 9, 2014 § 1 Comment

Tom Freeland posted this on his blog not too long ago:

Over the years, I’ve seen several estate cases where some family members were claiming the deceased had a lock box with hundreds of thousands of dollars in cash in it, and even were willing to swear under oath to its existence.

But I’ve never seen one with a shred of actual tangible evidence of the existence of the lock box.

I can second that. His post brough to mind some experiences I have had in that vein.

  • When I took the bench I inherited a case in which my predecessor had authorized the administrator to hire a professional treasure hunter to search the decedent’s property for the buried pelf that all of the heirs were convinced was there. Successive authorizations for further excavations were granted until, in the words of one of the attorneys involved, the decedent’s home was perched on a ten-foot pedestal of red-clay dirt with devastation of strip mining all about. It took a ladder to climb onto the front porch. After the heirs exhausted their savings in their quixotic, unsuccessful quest, I authorized them to dig on their own, until at length they gave out. The case took a bizarre turn when I was asked to order that the body of the decedent be dug up and autopsied. No.
  • A woman hired me to recover money in her mother’s intestate estate. Her mother had squirrelled money away each month from her meager Social Security payments in a safe deposit box. She and her sister took turns accompanying momma to the bank, so both knew of the cash. Both sisters were on the card authorizing access. After momma’s death they met at the bank and went through the safe deposit box contents. There was $18,000 there. They decided to leave the money in the box and not tell their husbands. It would be their own little trove of mad money. A couple of days later, my client claimed she had a pang of worry about the money, so she drove to the bank. Her heart sunk when she went to sign the access card and saw that her sister had been there without her the day before. All the money was gone. Her sister denied getting the money. I explained to my client all of the problems in proving her claims, and set out all the lies the sister could spin to cover her tracks. We filed a petition with the court and, to make a long story short, were able to recoup the funds because the sister made the miscalculation of revealing to an honest lawyer what she had done, and he made her do the right thing. The worst aspect for the sisters, aside from the attorney’s fees, was that when all the dust cleared their husbands knew about the money.
  • Some grandchildren of an old woman in Kemper County came in to my law office one day with a cardboard box filled with rusty tin cans. That’s where grandma would stash her money over the years, depositing the cans under the concrete steps up to the front porch. She would sit on the porch all day with a switch to ward off anyone who tried to get at her riches. When we tried to count it, we discovered that the money was wet, mildewed, worm-eaten, and stuck together. The family had to get a consultant with the Treasury Department to advise how to restore the bills, mostly ones. They followed the instructions and got a Treasury check in return for the currency in the grand total of $3,000. A little more than the expenses of administration.  
  • In an estate my former law partner handled decades ago, the decedent left a will giving his eldest son his diamond ring and his bank accounts, and his daughter his home. The youngest son, somewhat of a n’er-do-well, got the decedent’s briefcase, hat and cane, all of which were handed over to him unceremoniously. The young man came back later and told my partner that the briefcase was full of US savings bonds. If that were true, and he found a way to cash them in, he came out pretty well.

Before you leap into that estate with stars in your eyes, step back and be skeptical about tales of untold wealth that needs to be dug up. Most people don’t handle their business that way. In many estates, you would do well to make sure your fees and the expenses of adminstration can be paid.


Wrongful Death and Chancery Court

March 6, 2014 § 3 Comments

If you are going to do any wrongful death practice at all, you must familiarize yourself with the MSSC’s decision in the seminal case of Long v. McKinney, 897 So.2d 160 (Miss. 2004), reh den. April 7, 2005.

The decision clarifies many important concepts involved in wrongful death claims, including priority of jurisdiction, the distinction between heirs and wrongful death beneficiaries, allocation of attorneys fees, costs and expenses, representation, conflicts of interest, and control of litigation.

What is important in this case to the chancery practitioner, however, is Justice Dickinson’s exposition on the role of chancery court.

There is much confusion in the bar, and perhaps the bench as well, about exactly what is the proper role of chancery court in wrongful death. Justice Dickinson expounds:

¶59. Perhaps no aspect of wrongful death litigation is more misunderstood and misapplied than the role of the chancery court.[Fn 13] With respect to a wrongful death suit to be pursued in circuit court, chancery jurisdiction should be invoked for the following purposes:

Fn 13. The misunderstanding can be partly attributed to the Uniform Chancery Court Rules, which address petitions for authority to compromise, and petitions for allowance of attorney fees, in wrongful death suits. U.C.C.R. 6.10, 6.12. These rules apply only to wrongful death suits which require chancery jurisdiction. See discussion infra.


¶60. In the event the litigants wish to pursue a claim on behalf of the estate of the deceased, [Fn 14] such estate must, of course, be opened and administered through the chancery court. As is true in all estates administered through the chancery court, chancery approval is required for the appointment of the personal representative of the estate, whether executor, executrix, administrator or administratrix.

Fn 14. We recognize that, because of the limited recovery available to the estate in many cases, litigants may choose, with advice of counsel, to proceed without including a claim on behalf of the personal representative or the estate. As discussed infra, such decision should be made only after full disclosure to all who might benefit from the estate.

¶61. There is no general requirement under law that the personal representative obtain chancery approval to pursue the claims of the estate in the litigation. Nor is there a general requirement that counsel representing the personal representative and the estate in the litigation obtain prior chancery approval of such representation or the agreement for compensation of counsel. However, obtaining such prior approval is a widely accepted and wise practice.[Fn15] Such prior approval will, in most instances, avoid difficulty when the chancellor is approached for an order approving the accountings and the final distribution of estate proceeds, where such payments include compensation to counsel.

Fn 15. This is especially true where counsel representing the estate in the wrongful death litigation has not agreed, and does not intend, to represent the estate generally.

¶62. Where a recovery is had by the estate in the litigation, the proceeds must be administered and distributed though the chancery court in the same manner as other assets of the estate, and counsel for the estate must be paid from estate proceeds or assets, upon approval of the chancery court in the same manner as other debts and obligations of the estate. * * *


¶66. Frequently, wrongful death litigation will involve a minor, either as an heir of the estate, a wrongful death beneficiary, or both. In such cases, the representation of the minor’s interests, and any agreement for the payment of attorney fees from the minor’s share of proceeds, must be approved by a chancellor, as in other cases. [BCP Note: settlement of the minor’s claim must also be approved by the chncellor, in the same manner as any other minor’s settlement.]

Determination of wrongful death beneficiaries.

¶67. Section 11-7-13 provides that wrongful death litigation may be brought by the personal representative of the deceased or by any one or more of several statutory beneficiaries, for the benefit of all entitled to recover. Unless all persons entitled to recover join in the suit, those who do have a fiduciary obligation to those do not. Miss. Code Ann § 91-1-27 (Rev. 2004) provides for a chancery determination of the heirs at law of a decedent; that is, those who inherit in the absence of a will. Although our statutes mandate no specific procedure for the identification of wrongful death beneficiaries, a chancery court may make such determinations. Those bringing the action, together with their counsel, have a duty to identify the beneficiaries, and they should do so early in the proceedings. [Fn 16]

Fn 16. Recognizing that the lack of a specific procedural framework for determining wrongful death beneficiaries is a handicap for practitioners, this Court – in its continuing review of procedural rules – will address this need.

One of the biggest sources of confusion, in my experience, is the disconnect between the status of persons as heirs and as wrongful death beneficiaries. The categories overlap, but they are not the same. A person may be a wrongful death beneficiary, and yet not be an heir. You need to read and stidy the statutes to learn the difference and to be able to identify all of the individuals who must be included. Merely filing an action to determine and discover unknown heirs at law will not identify all the wrongful death beneficiaries.

From a chancellor’s perspective, I think the most important aspect of all is that of the minor’s settlement. You can make any agreement in circuit court about how to settle the wrongful death action, but you can not tie the hands of the chancellor as to whether the settlement is reasonable or adequate for the child(ren), or as the amount of fees to which it is subject, or to its amount.


April 11, 2013 § 2 Comments

It seems to be a more and more frequent problem that when we issue orders in delinquent estates, an attorney pops up and says something like, “Well, judge, the reason we haven’t filed an inventory, or any accountings since 1997 is that I lost contact with the fiduciary.”

Who’s got the problem in that situation? 

Well, UCCR 6.02 says this about that:

In guardianships and conservatorships an attorney must be faithful to both fiduciary and the ward and if it appears to the attorney that the fiduciary is not properly performing duties required by the law then he shall promptly notify the Court in which the estate is being administered. Failure to observe this rule without just cause shall constitute contempt for which the Chancellor will impose appropriate penalties.

And what exactly are those “duties required by law?” Here’s what UCCR 6.02 says:

Every fiduciary and his attorney must be diligent in the performance of his duties. They must see to it that publication for creditors is promptly made, that inventories, appraisements, accounts and all other reports and proceedings are made, done, filed and presented within the time required by law, and that the estates of decedents are completed and assets distributed as speedily as may be reasonably possible.

It’s pretty clear from the language of the rule that your neck is in the noose along with your fiduciary. If the requirements are not met, you are as responsible for the lapse as is your fiduciary. Oh, and explaining to the chancellor that you had no idea that the Uniform Chancery Court Rules had this provision will in all likelihood only make things worse.

Here are some helpful posts from the past … Five Mistakes that Fiduciaries MakeFive More Mistakes that Fiduciaries MakeApproaching Zero Tolerance … and … Essential Procedures in Guardianships and Conservatorships.

If the landscape of your probate practice is littered with failures to file accountings, inventories and other reports, and you have estates that due to sheer neglect are languishing unclosed far beyond what is reasonable, look no farther than yourself for a place to lay the blame. That’s where the judge will look.


April 2, 2013 § 3 Comments

The COA decision in Estate of Necaise: Covington v. McDaniel, decided March 12, 2013, addresses the question whether a judgment creditor of the potential heirs of an estate has standing to assert a claim against the estate.

Lawrence Covington probated a claim against the estate of Darryl Necaise, Sr., based on a $1,000,000 judgment he had obtained against three of the decedent’s heirs in the Circuit Court of Yalobusha County. The proceedings are convoluted, involve three separate appeals, all consolidated, and even a separate circuit court proceeding. For our purposes, however, we are focusing on the sole issue of Covington’s standing to assert a claim against the estate when the judgment forming the basis of his probated claim was against some of its heirs, and not against the decedent or the estate itself.

Judge Carlton, for the court, spelled out the answer:

¶23. Covington’s appeals regarding the findings of the chancery court primarily arise out of his claim to be an interested party to the probate proceedings and the contest of Darryl Sr.’s will based upon his pecuniary interest in his judgments against potential heirs of the Estate. In support of his argument, Covington relies on Mississippi Code Annotated section 91-7-25 (Rev. 2004), which states that “[i]n any proceeding to contest the validity of a will, all persons interested in such contest shall be made parties.” Significantly, Covington does not assert on appeal that a judgment was entered against the Estate or Darryl Sr., the decedent.

¶24. Relying upon precedent, this Court recognizes that “[i]nterested parties are those whose direct[] pecuniary interests will be either detrimentally or advantageously affected by the probate of the will. Included in this group will ordinarily be [the] decedent’s heirs at law, beneficiaries under earlier wills, and beneficiaries under the will being contested.” Garrett v. Bohannon, 621 So. 2d 935, 937 (Miss. 1993) (emphasis added and citation omitted). With respect to the claim asserted by Covington, we find that Covington failed to prove he possessed a direct pecuniary interest against the Estate. Moreover, the only heir named in Darryl Sr.’s will, McDaniel, never contested the will. In fact, McDaniel, as the executor, had Darryl Sr.’s will admitted to probate; she possessed no duty to notice any parties except creditors of the Estate, which she alleges she accomplished by publication as required. As previously discussed, Darryl Sr.’s former spouse abandoned any intent to contest the will admitted to probate.

¶25. Covington asserts no direct pecuniary interest in the probate of the Estate. Covington is not a creditor of the Estate and identifies no debt or expense owed to him by the Estate or Darryl Sr., the deceased. Further, Covington is not an heir-at-law of the decedent nor a named beneficiary in any will alleged to have been executed by the decedent. In fact, Covington is not a judgment creditor of the sole heir of the estate, McDaniel. Therefore, Covington fails to establish standing to assert a will contest that would never result in him being a beneficiary of the assets of the Estate. His only connection to the Estate is that he tried, yet failed, to obtain a judgment against Darryl Sr. and the Estate. As such, we find this issue to be without merit.

An interesting twist in this case is how Covington attempted to assert himself into the proceedings as to the validity and enforceability of the will itself. I had never seen a party claiming to be a judgment creditor try to assert those kinds of issues in the probate of an estate.

Chancellor Vicki Cobb apparently considered the issue of standing so clear-cut that she assessed sanctions against Covington. You might want to add the possibility of sanctions into the equation before you leap into filing something similar yourself.


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.


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.


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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