12.17.09
Posted in General at 2:10 pm by Mark Leahy
The Wall Street Journal reported today that the U.S. Senate will not vote to extend estate taxes before they are scheduled to go away (for a year) on January 1. As a result, under the 2001 tax reform, there will be no federal estate tax due for deaths in 2010, but in 2011 they will return at a 55% top rate on estates over only $1 million. All is not grand for taxpayers since the 2001 law also limits step-up in basis on death to $3 million on assets passing to a spouse and $1.3 million on assets passing to anyone. Planning for capital gains may become more complex than planing for estate taxes was.
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12.04.09
Posted in General at 8:04 am by Mark Leahy
The House of Representative voted on Dec. 3 to permanently extend the current $3.5 million estate tax threshold and 45% tax rate on estates exceeding that amount. The Senate has until Dec. 31 before federal estate taxes go away for a year and then come back with an exemption of only $1 million. http://voices.washingtonpost.com/capitol-briefing/2009/12/house_votes_to_make_current_es.html?hpid=topnews
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10.22.09
Posted in Guardianship at 8:19 am by Mark Leahy
Guardians don’t have authority to admit their incapacitated persons to nursing facilities without specific authority from the Probate and Family Court. But, what if a hospital needs to discharge a patient under guardianship to short term rehab? The definition of “nursing facility” in the Code would seem to include rehabilitation and prevent the guardian from authorizing the admission. This could lead to hospitals having to hold patients until a court hearing can be arranged or discharging people to their home without needed rehab, neither in the best interests of the patient.
Should this be changed so that guardians would have the authority to make short term placements in nursing and rehabilitation facilities? But, if so, what is short term, 30 days, 60 days? Or, is there a guideline somewhere in the insurance or health regulations that this could be keyed to?
Shouldn’t a written notice of placement be sent to the nursing home and the appointing court? Then, if the placement needed to become long term, the guardian would have time to file a petition to modify his or her authority.
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10.17.09
Posted in Guardianship at 10:20 am by Mark Leahy
In Massachusetts medical certificates have a life of 30 days. One must be filed with a guardianship/conservatorship petition and one must be on file at the time of hearing. If either is stale, the case cannot go forward. As an aside, our new certificate is being touted to other states as the new gold standard.
But some say that now that the MC is so much more detailed, it’s much more difficult and/or expensive to obtain, making it near impossible to get a permanent appointment without a second doctor visit and MC.
Should the rule be changed to 60 days for the hearing, or 60 days for both filing and hearing? How about 90 days? Or should the strict limit of 30 be for only filing and let the court determine if another is needed at hearing? In acute care situations, the shorter limit might be appropriate as dramatic improvement could occur before hearing. But for prolonged illness, a new MC might be unnecessary. How to know the difference - another checkbox on the certificate?
Or, would the long awaited added protections brought by the Code be diluted by changing this policy which has been in place for many years?
This is an active topic among the courts and the guardianship bar. Opinions seem to be all over the place. If you have an opinion, please post your comments here. We’ll monitor and report to the MUPC Implementation Committee.
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09.29.09
Posted in Guardianship at 10:54 pm by Mark Leahy
A special conservator can be appointed in either of 2 situations. First, when the appointed conservator or temporary conservator is not performing duties (5-412A(c)). If a conservator has abandoned the protected person or is not attending to his funds, or not filing proper accounts, the court has this power which it may exercise any time after finding tha the welfare of the person required immediate action. This is a mirror of 5-308(b) for special guardians.
In addition, the court may appoint a special conservator to assist in implementation of a single transaction or protective arrangement where a continuing permanent conservator appointment is not necessary (5-408). It’s likely that many single transactions will require someone with authority to sign off on the transaction. This is not an emergency appointment and thus the term “temporary conservator” is not used. It doesn’t have to be requested in the petition. The role of the special is only to carry out the functions directed by the court and report back. Formal acceptance by the court of the report may be necessary to permit any sureties to be canceled.
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Posted in Guardianship at 10:41 pm by Mark Leahy
The Code makes it clear that guardians are for the care of the person and conservators are to manage their the property. But it also says that anyone having money or personal property due a minor can pay up to $5,000 to a guardian (among others) if he is not aware of any conservator appointment (5-102). So, does this mean a guardian of a minor can manage up to $5,000? I dont’t think so. 5-102 provides a safe haven only for the payor. That could be a bank, insurance company or executor, but it doesn’t say the guardian can handle it on an ongoing basis. The guardian can apply the money to the ward’s current needs (5-209(b)(4)) and conserve any excess for future needs. The funds might be periodic income like SSI which the guardian can accept and apply to immediate expenses. The guardian of a minor or adult can also seek, receive and apply support payments from a parent, trust, public entitlement, etc. (5-209(c)). But, if any money has to be deposited to a bank account such that a fiduciary has future access to it, that fiduciary needs to be a conservator.
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08.13.09
Posted in Guardianship at 1:46 pm by Mark Leahy
This year a major reform of probate and guardianship law was enacted in Massachusetts. Aside from its major target of simplifying probate and providing more protection for incapacitated persons, the new Massachusetts Uniform Probate Code brings some subtle changes which should be understood by the retail banking community.
Beginning July 1, 2009 guardians will be appointed for personal decision making only and new appointees will not have authority over the incapacitated person’s property, including bank accounts. Conservators must be appointed to manage any property and bank accounts.
Since any appointment may be limited in its scope, it becomes important for the Letters of Conservatorship to be examined to determine if a conservator has authority appropriate to a particular transaction. For instance, the Letters may permit the protected person to continue managing some accounts. Or, some accounts may be restricted to prohibit withdrawals (except transfers to take advantage of interest rates) except by court order.
Any person who in good faith assists of deals with a conservator is protected except as to limitations endorsed on Letters of Conservatorship and certain transactions which require court approval.
A conservator may expend funds for the support, education, care or benefit of the protected person. The new Probate Code includes a list of powers which are conferred on a conservator (unless limited by the Letters). They include authorization to invest and reinvest funds of the protected person as would a trustee and, more specifically, depositing funds in any single state or federally insured bank, not in excess of the amount protected by federal or state insurance. A conservator may also borrow money to be repaid from estate assets. But, a conservator may not sell real estate without a license granted by the Probate and Family Court.
Old plenary (general) guardianships and guardianships of the estate will still confer authority over the person’s property and they will be automatically considered to be conservatorships. New appointments of guardians will not include power over property, including bank accounts. After June 30 new appointments will have to be of conservators if there is property to be managed. Anyone with a new or old appointment with powers over property can get Letters of Conservatorship from the Probate and Family Court. The old appointment remains in effect and the guardian or conservator is not required to make any new filings for continuation of authority.
A bank may pay funds of a protected person to a conservator or guardian of the estate appointed in another state after receiving proof of appointment and an affidavit of the guardian or conservator that no conservator proceeding is pending in this state and that the foreign conservator or guardian of the estate is entitled to receive the funds. If the bank is not aware of any pending proceeding, it is discharged of liability.
The new law provides that a durable power of attorney will not be affected by subsequent disability or incapacity of the person making the power, or lapse of time unless it states a time of termination. A new provision provides that any person relying in good faith on a durable power of attorney will not be liable for action taken in such reliance. However, unreasonable refusal to honor a durable power of attorney can result in a suit for damages.
The Probate Code also introduces new procedures which will enable quicker and more efficient probate of estates of deceased persons. It will also permit more privacy relative to estate assets. However, these provisions will not be effective until 2011.
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06.29.09
Posted in Guardianship at 3:35 pm by Mark Leahy
Beginning July 1, 2009 Medical Certificates and Clinical Team Reports will be impounded and not available to the public. They will be available to interested persons who make a written request (MPC 303), the respondent, attorneys having filed an appearance and guardians ad litem. See new Standing Order 01-09. If a case is dismissed with no decree entering, the entire file will be impounded.
Parties may request that additional information be impounded as well by motion brought under Trial Court Rule VIII. Considerations for impoundment include the respondent’s preferences and the rights and interests of third parties.
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Posted in Guardianship at 3:07 pm by Mark Leahy
By new Standing Order 02-09, the Probate and Family Court has announced how it will apply the new law to guardian and conservator appointments made before July 1, 2009.
Guardians of both the person and estate (plenary guardianship) will going forward be considered both guardians and conservators. When the matter is next before the court, a new case file will be opened for the conservatorship. Guardians of the estate only will be treated as conservators. No new filings are required to maintain the authority of the guardian or conservator.
However, if a guardian seeks a new admission to a nursing home, authority must be sought from the court by a Petition to Expand- Modify- Limit the Powers of a Guardian (MPC 201). Admissions made prior to July 1 will be valid without further authorization, even through any temporary hospitalization.
Guardians, whenever appointed, will be required to file an Annual Report describing the incapacitated person’s condition, care, supervision, and visits (Form MPC 821). While new appointments will be automatically monitored for reporting compliance by the new MassCourts computer system, older cases will be reviewed and entered into the monitoring system when the cases are next before the court.
Conservators (including former guardians of the estate) continue to be required to file annual accountings. Older cases will be reviewed and entered into the monitoring system when the cases are next before the court. In addition to being monitored, conservators will be expected to file and present accounts for allowance annually.
Upon request, Letters of Guardianship or Letters of Conservatorship will be issued in place of old certificates of appointment.
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Posted in Guardianship at 1:59 pm by Mark Leahy
The Probate and Family Court has published new guardianship and conservatorship forms on its website. The forms will be required for filings made after July 1, 2009. The forms posted so far include Petitions, Medical Certificate, and Instructions for Clinicians. Additional forms will be posted very shortly.
Note that for any hearing for the appointment of a temporary or permanent guardian or conservator after June 30, the new Medical Certificate will be needed to support the Court’s required findings under the new law.
The forms are in PDF format with expandable sections. Filled in forms may be saved with Adobe Acrobat Standard or Pro.
The link to the forms is:
http://www.mass.gov/courts/courtsandjudges/courts/probateandfamilycourt/upcforms.html
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01.30.09
Posted in Probate at 4:53 pm by Mark Leahy
Representation per capita at each generation reflects the notion that family equally near are equally dear. In an estate, unless otherwise provided for in a will, all grandchildren receive equal shares, even if they are descended through different predeceasing parents. So, imagine an estate in which there are 3 children, only one of which is alive, another deceased leaving 2 children and another deceased leaving 4 children. The living child gets 1/3. The 6 grandchildren share the other 2/3 equally. [2-106]
The Massachusetts Probate Code is not so different as it may appear. While prior law claims to require distribution by right of representation (per stirpes), it actually applies per capita distribution if all issue are in the same degree of kindred. [G.L. c. 190, s. 3]
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Posted in Probate at 4:50 pm by Mark Leahy
Most estate planners would agree that most married couples want to leave their entire estate to each other. Yet the Massachusetts rule has been to give the surviving spouse only 1/2 for those who don’t bother to make a Will.
The new Massachusetts Uniform Probate Code will give the spouse the entire estate if all of their children are of that marriage. The spouse would get $100,000 and 1/2 of the rest if the spouse has children who are not children of the decedent. Likewise, if the decedent left children who are not children of the surviving spouse. The spouse would get $200,000 and 3/4 of the remainder if the decedent left a parent, but no children. [2-102] The children of the decedent take the rest of the estate, and if there are no descendants, parents take. [2-103]
Note that the term “issue” is no longer used as it has a biological connotation. The term descendants is used to make clear the status of adopted children. An adopted child is the child of the adopting parents and not the natural parents, except when the spouse of a natural parent adopts which will have no effect on the right of the child to inherit from either natural parent. [2-114]
The new Code should more nearly reflect the expectations of most people if they had gone to the trouble to declare their intent by making an estate plan and it adjusts to accommodate blended families which are so much more common today.
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01.23.09
Posted in Guardianship at 10:59 am by Mark Leahy
In furtherance of the objective to protect the liberties of a disabled person and encourage limitations on orders restricting those liberties, the new Massachusetts Probate Code distinguishes between conservators and guardians. After the effective date (July 1, 2009) guardians may be appointed only for protection of the person. A conservator must be appointed to protect property and business affairs. If both are needed, 2 petitions and 2 appointments are required, though they may be consolidated. [1-302(d)]
A guardian may be appointed for an incapacitated person “who for reasons other than advanced age or minority, has a clinically diagnosed condition that results in an inability to receive and evaluate information or make or communicate decisions to such an extent that the individual lacks the ability to meet essential requirements for physical health, safety, or self-care, even with appropriate technological assistance”. [5-101(9)]
A conservator may be appointed for a person to be protected if “the person is unable to manage property and business affairs effectively because of a clinically diagnosed impairment in the ability to receive and evaluate information or make or communicate decisions, even with the use of appropriate technological assistance, or because the individual is detained or otherwise unable to return to the United States; and the person has property that will be wasted or dissipated unless management is provided or money is needed for the support, care, and welfare of the person or those entitled to the person’s support and that protection is necessary or desirable to obtain or provide money”. [5-401(c)]
Note the difference in terminology. Guardians are appointed for incapacitated persons and conservators are appointed for persons to be protected. Only minors are wards.
Conservators must file an inventory and accounts in the traditional manner, but they must add to the account a listing of services provided and a recommendation as to the continued need or changes in the scope of the conservatorship. [5-418(b)] Guardians, on the other hand, must provide within 60 days of appointment and annually thereafter a report of the condition of the person. The report will include the current mental, physical and social condition; living arrangements, services provided, summary of guardian visits, comment on treatment, plans for future care and a recommendation as the continuation and scope of the guardianship. [5-309(b)] The court is mandated to establish a system to monitor accounts and reports.
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Posted in Guardianship at 10:17 am by Mark Leahy
All too often plenary guardianship appointments are made when a person’s incapacities are only in some areas of diminished functionality. The new Massachusetts Probate Code should change this tendency by requiring information which will highlight functional incapacities and promote creation of limited guardianships.
A court may limit the powers of a guardian and create a limited guardianship with the limitations endorsed on the order, [5-306(c)] the purpose being to “enclourage the development of maximum self-reliance and independence of the incapacitated person and make appointive and other orders only to the extent necessitated by the incapacitated person’s limitations or other conditions”. [5-306(a)] However broad or limited the guardian’s powers, he or she should encourage the person to act, participate and develop capacities to manage his or her own affairs. [5-309(a)] Indeed, the guardian should report changes status of the incapacitated person which may lead to refinement in the scope of the guardianship. [5-309(b)(7)] A ward’s liberties must be held in the highest regard and orders limiting those liberties should be made only to the extent absolutely necessary to protect the individual from harm.
The more extensive information available to the court through the new petitions and medical certificates (already required) will permit implementation of the new standard.
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01.21.09
Posted in Probate at 12:26 pm by Mark Leahy
Privacy has been a hot button issue in recent years for good reason, yet the probate process opens all the intimate financial details of a deceased person’s property to public scrutiny. Well, now it’s possible to avoid publicity under the new Massachusetts Probate Code.
Certainly a personal representative is required to inform the estate beneficiaries. He or she must prepare an inventory within 3 months after appointment and mail it to the beneficiaries. It MAY also be filed with the court. [3-706] Thus public disclosure of assets may be avoided. Conveyancers may object and request an inventory to connect the chain of title for real estate. However, title issues should be satisfied by a deed of distribution under 3-907. Deeds of distribution are uncommon under the old practice in Massachusetts, but may become common under the code.
A formal closing of an estate would require filing of an accounting and inventory for public record. However, if the personal representative does not feel the need of a final judgment before distribution, he or she can make an informal closure by filing a closing statement under 3-1003. The personal representative must make a verified statement that an accounting has been sent to interested parties, that the time for filing claims by creditors has expired and that the estate has been full administered. Six months after filing objections are barred. In a simple situation with the personal representative being a family member, the informal process may suffice. An independent personal representative may want the comfort of a formal judgment on closing and may forgo the privacy protection.
So, by sending an inventory and accounting to the beneficiaries and closing by a sworn statement, privacy of family finances can be preserved under the new code.
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Posted in Probate at 11:30 am by Mark Leahy
One of the great advances the new Massachusetts Probate Code introduces is informal probate. It not really new, its been around since the time of sir William Blackstone and you can read about it in his Commentaries, Book II, Chapter 32. “The executor… must prove the will… either in common form, which is only upon his own oath before the ordinary or his surrogate, or per testes, in more solemn form of law in case the validity of the will be disputed.”
Solemn form is basically our current formal procedure to obtain a final judgment after notice and proof of the will by the witnesses (per testes). Informal probate (common form, as it is still called in some states) permits immediate appointment of a personal representative without waiting for a final judgment allowing the will or determining heirs. This leaves open the opportunity for anyone to contest the will or heirship while allowing someone to get to work right away to marshal assets. Actually, 7 days prior notice must be mailed to interested parties. Publication is still required, but not until after informal appointment. This procedure can be found in the Code at 3-301.
If probate is opened informally, any interested party may still file a formal probate resulting in an automatic suspension of the personal representative’s power to distribute plus any other limitations the court wishes to impose.
The new code still allows one to probate formally in the old fashion by requesting a citation, giving notice and wating for a return date to request an appointment and allowance of the will. This will be preferred when a contest is anticipated or by the cautious person who wants the protection of a judgment before undertaking the responsibility. The formal filing may be made immediately after death and prevents a later informal filing. The formal procedure is at 3-401.
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01.16.09
Posted in Guardianship at 2:59 pm by Mark Leahy
A new caregiver authorization was signed into law on January 14. New MGL c. 201F permits a parent to authorize another to exercise concurrent rights and responsibilities over the education and healthcare of a minor. Authorization is by notarized affidavit with 2 witnesses . The authorization is revocable and may be for as long as 2 years. This will greatly reduce the need of guardianships for minors. It is Chapter 511 of the Acts of 2008 and may be found at http://www.mass.gov/legis/laws/seslaw08/sl080511.htm.
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Posted in General at 9:59 am by Mark Leahy
On January 15 Gov. Deval Partick signed into law the long-awaited Massachusetts probate and guardianship law reform and codification. The official designation is Chapter 521 of the Acts of 2008. The enactment came on the last possible day for the 2008 legislative session.
The effective dates are delayed to give the courts, lawyers and the public time to adjust to the changes from current procedures. The guardianship section of the code (Article V) will become effective on July 1, 2009. The remaining parts relating to estates and trusts will become effective on July 1, 2011.
There will be many opportunities to get up to date on the changes through CLE before the effective dates and we’ll review as many of the new features of the Code as we can right here. Please give us your comments and questions and we’ll try to respond to all.
And a big thank you to all (and there are many) who made this possible.
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01.15.09
Posted in General at 1:56 pm by Mark Leahy
Estate and guardianship law and procedure in Massachusetts have been significantly modernized by the enactment on January 15, 2009 of the first comprehensive codification of probate law in the Commonwealth.
The new Massachusetts Probate Code introduces a flexible system for administering estates of deceased persons, permitting as little or as much oversight by the Court as may be appropriate for the needs of families inheriting wealth.
The time needed to open a probate will be shortened while at the same time the protections available for beneficiaries will be increased by enactment of a new optional informal probate system currently available in many other states. Estates may be more quickly and efficiently administered in the vast majority of situations where no controversy exists. Privacy of family financial information will also be protected. Surviving spouse’s rights are improved while also protecting shares of estates for children of prior marriages.
Guardianships for incapacitated persons will be more protective of their individual rights. Individuals subject to guardianship proceedings will no longer be stigmatized by reference to a “mentally illness” and loss of personal rights will be limited as circumstances require. Greater disclosure of a person’s needs and limitations will be needed before a guardian may be appointed and guardians will be required to make regular reports of the care and condition of their wards.
The Massachusetts Probate Code was drafted and sponsored by the Massachusetts Bar Association and the Boston Bar Association and is a joint effort of judges, Registers of Probate and guardianship public interest groups.
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