By Justin O’Dell

Last month, we came to the conclusion that Dick and Jane could be facing the situation of dealing with the filing of a Guardianship and Conservatorship over Dick’s Mother.   The process sounds intimidating and costly.  If a fight breaks out within Dick’s family, it can prove to be emotional and expensive.  However, if the family stays on the same page and works together, the Probate Court is designed to facilitate the situation while protecting the interests of the Mother.

Before we proceed, we must establish a few definitions:

1)  Ward – The Ward is the person who is declared incapacitated.

2)  Guardianship – A Guardian is appointed to make decisions about the health and welfare of a Ward.  These decisions may touch on financial considerations, but a Guardian does not have control of a Ward’s assets or finances.  Some decisions are allowed without Court approval and others require permission of the Court.

3)  Conservatorship – The Conservator has control of the Ward’s finances and assets and makes decisions about the Ward’s estate.  The Conservator submits an annual budget called an “Asset Management Plan” along with an Inventory of the Estate and a Return of Receipts and Disbursements.

There are two ways to file for Guardianship and Conservatorship.  The processes are the same, but it is not required that an individual file for both.  Circumstances and the individual situation may warrant seeking one without the other.

The first type of Petition requires the signature of a related family member and a physician or medical doctor who has recently examined the Ward.  The second type of Petition may be brought by two family members.  In either instance, all of the Petitioners are required to swear that the Ward lacks sufficient capacity to make or communicate significant responsible decisions concerning his/her health or safety (Guardianship) and lacks sufficient capacity to make or communicate significant,  responsible decisions concerning management of his/her property (Conservatorship).

Once filed, an evaluator will be appointed to make a brief medical evaluation of the Ward to determine whether or not the allegations of the Petition have merit.  The Ward will also be appointed an independent attorney and, sometimes, a Guardian ad Litem to look after the interests of the Ward.

The spouse and all of the children of a Ward are given notice and the right to participate in the proceedings.  If minor children are involved, an attorney or guardian ad litem will be appointed to represent their interests.

If the matter is contested, either as to the issue of capacity or as to the issue of which person should be Guardian and/or Conservator, a full evidentiary hearing will be held.  If all parties, including those appointed for the Ward, consent that the action is prudent and necessary, then the hearing is much more truncated.

If granted, the Probate Judge has the power and authority to grant the Guardian and Conservator any number of rights and powers and to take any number of rights and powers away from the Ward.  These decisions are driven by the facts and circumstances of the case and based on a desire to preserve the independence and rights of the Ward, but also to protect the welfare and estate of the Ward.  Even if the Conservator is granted all of the available powers and the Ward is deprived of the same, some transactions, such as selling property of the Ward always require the permission and approval of the Probate Court.

The Guardianship and Conservatorship can be terminated if the individual regains capacity.  Any interested person, including the Ward him or herself, can initiate a Petition for Restoration of Rights.

Guardians and Conservators can be compensated for the service.  Guardian’s compensation is determined by the Court and Conservator’s compensation is based on a percentage of the assets and receipts and disbursements involved.

Guardians and Conservators become “fiduciaries” of the Ward.  Under Georgia Law, a fiduciary is bound by the highest standards of loyalty, honesty and fair dealing to their beneficiary.  If a Guardian or Conservator breaches a fiduciary duty, they are liable to the Ward and can be order to appear before a Probate Judge to account for their actions.  Other agencies, such as the Internal Revenue Service, also have provisions whereby a Guardian or Conservator can become liable for failure to property act on behalf of another.

Guardianships and Conservatorships are an important function in dealing with the aging process.  Even the most carefully planned estate with Powers of Attorney and Health Care Directives in place can fall short.  Most notably, these documents merely extend rights to a third party, but do not cut off the rights of the Ward.  For situations in which a family needs to protect a loved one from themselves or from predators and scammers preying on the elderly, a Guardianship and Conservatorship is the only possible route.  Finally, Guardianships and Conservatorships are also necessary in order to deal with a disabled child who is turning 18 or when tragedy strikes and a loved one is suddenly injured in a sudden event like a motor vehicle accident or contracts a disabling medical illness.

To learn more about this area, the Probate Court Council of Georgia has published a very helpful guidebook which provides a more expanded discussion.  You can find the handbook here: http://www.sji.gov/PDF/GA_Handbook_for_Guardians.pdf.

By Justin O’Dell

Last month, we learned that Dick’s sister called, informing him that Mom is starting to decline in health.  As a result, Dick’s sister is going to be “added” to all of Mom’s bank accounts just in case she needs to pay her bills.  Sound familiar?  What could go wrong?

Unless Mom is very, very careful or has an overly diligent banker, an awful lot can go wrong.  When someone walks into a bank and asks that a person be added to an account, banks generally operate on the assumption that the person is going to be added as a joint owner of the account.  By default, a bank will generally select that the account is “Joint With a Right of Survivorship” or “JTWROS”.  Even if they do not expressly make that designation, Georgia law holds that the account is presumed to be with a right of survivorship, unless a contrary intention is indicated.

The problem occurs when Mom ultimately passes.  By operation of Georgia law, the account belongs 100% to the joint owner at the moment of death and passes regardless of the contents or provisions of Mom’s will.  The ownership transfer is only overcome by clear and convincing evidence of a contrary intention.

So, if Dick’s sister is added to the account and over time Mom begins pulling all of her money and property into that account (say for example she sells her home and moves into a care facility), Dick’s sister would effectively receive all of those funds to the detriment of Dick’s Father or the other children.

I have seen this fact pattern play out dozens of times.  It is plainly obvious to everyone that the parent never intended to leave all the money to one child.  In the majority of cases, the one sibling does the right and honorable thing and returns the money to the estate or distributes it equally.  However, there are many instances where the sibling takes the position that the money is his or hers, just as Mom would have wanted.

The unfortunate fact is that the remedies to the situation are so simple.  First and foremost, make sure you know your banker and know what they are having you sign.  Ask questions and get answers.  Second, if you need to add someone onto an account, designate them as having “signature rights only” so that they can conduct banking transactions, but have no ownership interest.  Thirdly, if more rights and authority are needed, use a General or Financial Power of Attorney to act on behalf of Mom.  Lastly, if Mom is in need and cannot care for herself or for her property, a Petition for Conservatorship or Guardianship can be filed in the Probate Court without a lot of time, trouble and expense.

Next month, we will look at the Probate Court process for dealing with an incapacitated adult and obtaining guardianship and conservatorship.  What is required to file?  What responsibilities are incurred?

By Justin O’Dell

As introduced last month, Dick and Jane are a young, married couple with three children.  Dick and Jane have never been able to find the time to sit down and prepare their Wills.  They are now asking friends and family about getting it done.  Some of the common myths they are hearing are as follows:

1)      “Don’t hire a lawyer, just do it online.  Lawyers charge too much.”

2)      “You need to avoid probate and set up living trusts.”

3)      “You cannot name out-of-state people as Executor or Guardian.”

Drafting a Will is one of the most important legal exercises for a young couple.  Along with a Will, couples should consider completing the Georgia Advance Directives Form.  This Form will dictate decision making authority and end of life decisions in the event of a tragic situation whereby D ick or Jane cannot make a decision for his or her self.

The first myth is a common situation perpetuated online.  While it is true that legal forms are available for limited amounts of money on line, the insight and knowledge to make sure that the forms are drafted and executed correctly is not readily available.  I have had numerous instances where people have spent more money trying to deal with the issues created by poorly drafted or executed Wills online than they would have spent hiring a lawyer to do it correctly in the first place.  Think of it this way – you can also go online and learn to rewire your electrical panel, replumb your bathroom or even do knee surgery, but is that the best idea???  O’Dell & O’Neal charges $600 as a flat fee for this work which includes the consultation, preparation of the Will and execution of the Will and Advance Directives Form.  By contrast, the hourly rates of most lawyers would easily surpass that total in fixing a mistake.

The second myth is perpetuated by individuals seeking to overcharge clients for estate services.  The reality is that no one should avoid probate and even the “probate avoiding” documents still require admitting a Will to probate.  What the process is referring to really involves keeping assets out of probate, not avoiding probate court.  There are states and situations where keeping assets out of probate makes sense.  Some states still charge fees based on the size of the estate. Some individuals have extremely high net worth or unique family situations where living trusts provide value.  For Dick and Jane, simple wills are more than adequate.  Furthermore, many of the “probate avoiding” techniques establish living trusts to hold assets.  In order to accomplish their purpose, these living trusts must hold all of the parties’ assets and must have a separate tax ID number and file a separate tax return each year.  For individuals like Dick and Jane this only complicates their already hectic lives.

The final myth is commonly circulated based on old memories of law long ago.  It is true that at one time, restrictions existed regarding the appointment of out of state Executors, Trustees and Guardians.  Most of these restrictions are gone.  Executors and Trustees may freely serve without any additional requirements or costs and frequently do so.  The use of e-mail and Fed-ex makes dealing with local attorneys and the probate court as easy (if not easier) as dealing with someone on the other side of Atlanta.  As for guardianship, the paramount concern of the Court is the desire of the parents and the best interests and welfare of the children.

Next time, we will continue the Probate law theme and discuss some issues with Dick and Jane’s parents and aging.  Dick’s sister has called and informed that because Mom is in poor health, she is going to have Mom add her to all of her bank accounts.  Good idea????