Estate planning is a process whereby individuals establishes a comprehensive plan to manage and distribute their assets for their own benefit and the benefit of family members and possibly others in the event of their disability or incapacitation and upon their passing. While the goals of estate planning can vary, this process makes it easier to avoid the need for guardianships or conservatorships under probate court supervision—while at the same time providing a mechanism to sell, eliminate unproductive assets to provide for personal care once a person has become substantially disabled, and provide a plan for the intelligent distribution of assets to beneficiaries once one has died, thereby avoiding the need for a decedent estate administration in probate court.
The guardianship process appoints someone to "control the body" of a disabled individual. The person appointed guardian has the legal right to make all decisions concerning the care, medical attention, education, and all other facets of the disabled person's daily living.
The conservatorship procedure appoints an individual to take control of the disabled person's assets so that they can be used for his or her benefit under the direct supervision of the probate court. The appointment and ongoing operation of these estate planning procedures can be complex and expensive and are best handled with the assistance of an estate planning attorney.
However, an even better plan is to avoid the need for either court procedure by properly planning your estate by the use of a revocable living trust.
Due to estate plans needing to meet strict state requirements, it is best to hire an experienced attorney who knows how to simplify the process, meet guidelines, and avoid extra expenses. An experienced estate planning attorney will review your financial condition, listen to your planning goals for yourself and family members, and analyze how to best accomplish your stated goals, given your financial resources. If you are fortunate to have substantial assets, an experienced estate planning attorney can help you minimize estate and gift taxation and recue income taxation to your heirs. The most important reason to hire an experienced estate planning attorney is that they get the process done correctly the first time. While do-it-yourself estate planning websites tout that you can accomplish these all-important tasks without the aid of an attorney, stop and think: you are only talking about securing the fruits of your life’s work for the benefit of those you most love. Do you really want to assume the risk of protecting your family by doing something you have never done before without the guidance and advice of someone specifically trained and experienced in such tasks?
Joseph R. Burcke has practiced estate planning in the St. Louis and eastern Missouri for more than 30 years. With an extensive knowledge of wills, trusts, powers of attorney, guardianship, conservatorship, and decedent estate procedures, he is able to fully serve his clients as well as their families—both in lawfully avoiding needless, expensive probate court procedures and competently guiding families through such probate processes when, as a result of failure to properly plan, such procedures prove necessary. Burcke has experience with both the young and elderly and knows that estate planning needs to be tailored to each client. His passion and experience of ensuring those with disabilities are properly protected when most vulnerable provides clients with added peace of mind and substantial long-term economic savings.
314-250-3560 222 South Central Avenue, Suite 600, St. Louis, Missouri 63105
The process commences with the filing of a Petition in the probate court. It suggests to the court that an individual has become disabled or incapacitated. It specifies, in laymen's terms, the nature and extent of the disability. The petition further states that the petitioner is able and willing to take over management of the disabled individual's assets and manage them according to law. It estimates the value of the property that will become subject to the probate court's jurisdiction if the conservatorship is created. It identifies by name and address the disabled person's nearest blood relatives and asks the court to appoint the petitioner conservator of the disabled person's estate.
Before filing this petition, the petitioner's attorney will send to the allegedly disabled person's attending physician a standardized questionnaire that asks about the nature and extent of the individual's alleged disability; the scope and course of the individual's immediate and long-term treatment; and the likelihood of continuation of the disability into the future. The physician completes and signs this form under oath. In the absence of any contested issues, the submission of this form will alleviate the need for the doctor's later appearance at court to testify as to the medical nature and extent of the alleged disability.
Upon receipt of this petition, the court appoints a nice young lawyer who needs work (and usually is of the same political affiliation as the probate judge) to act as the attorney ad litem for the allegedly disabled person. The job of this young lawyer is to meet the allegedly disabled person, his doctor and perhaps others close to the situation to determine the nature and extent of the individual's disability, in laymen's terms. It is this young attorney who represents the allegedly disabled individual, should an issue arise about whether the individual is so disabled as to be unable to manage his own affairs.
Notice is given to the immediate family that a petition has been filed which calls to question the ability of the individual to manage his own affairs; that the petitioner has volunteered to act as conservator; and that the recipient of the notice is invited to file any motions he desires in the matter and to attend the hearing which will be held (usually about 60-90 days down the road) to determine if the individual is disabled and to determine who should be appointed conservator of the individual's estate, should the court find the requisite disability to exist.
At the hearing the court will review the medical report; hear the report of the young lawyer regarding his/her personal observations concerning the nature and extent, if any, of the disabilities of the individual in question; and hear the testimony of all interested parties concerning the issues of disability, need for a conservatorship and propriety of appointment of the applicant as conservator. Usually the Petitioner is the only person to testify. He or she recites the day to day living style of the disabled person, placing particular emphasis upon the disabilities from which the individual suffers and how these disabilities negatively affect his/her ability to manage one's own financial affairs; and finally testifying that petitioner understands the legal obligations attendant to appointment as conservator and the individual's willingness and ability to undertake such obligations.
Upon conclusion of the testimony, the court awards a fee to the nice young attorney (around $400-$500). It sets a bond to secure the faithful performance of the conservator of his duties: usually in an amount equal to the value of the assets under administration (less the value of real estate which is not included in the amount of the bond). Once the bond is posted, the court grants to the conservator "Letters of Conservatorship". This document is tantamount to an operator's permit for the conservatorship. It is this document which entitles the conservator to "sign the name" of the disabled individual and thereby "unlock" his assets for his benefit.
Well, costs will vary from state to state; however, it will not be unreasonable to suggest the following figures: between $500-$750 for the petitioner's attorney; $400-$500 for that nice young ad litem attorney; filing fees of about $100; $150-$250 for the doctor's report; and an unknown amount for the bond premium, which varies in cost dependent upon the value of the underlying personal and mixed property.
Now; having obtained Letters of Conservatorship; can the Conservator now administer the disabled person's assets without further interference by the probate court? You know better!
The first task of the conservator is to prepare and make public by filing with the court an inventory which displays to the court and any member of the general public who chooses to come to the court house and look all of the disabled individual's assets that are under court supervision and their fair market value (as determined by appraisal) as of the date of commencement of the conservatorship. By the way, with increasing computerization of the probate courts records, it will soon be possible (if not already) to view these records from the comfort of one's home via internet access.
After that, each year, on the anniversary date of the Conservator's appointment, the Conservator is obligated to present to the court a Settlement. This settlement must account to the court every penny which has come into the conservatorship during the just past year and account for every penny which has left the conservatorship during the just completed year. This accounting must be supported by back up documentation constituting a canceled check and an invoice or paid receipt.
The probate court staff will review each year's accounting for several requisites; mathematical accuracy, verification of expenditure; and legal compliance. It is this final aspect of the audit which causes the most aggravation in the management of conservatorships by the conservator.
When most people hear the term "legal compliance" they expect the term to mean " compliance with the law" in the investment and expenditure of conservatorship assets. So it does. However, when envisioning the terms of that compliance, most people believe that there is a statute, court rule, regulation or other published guideline for the conservator to follow and thereby ensure that his management of the conservatorship is according to law. But guess what? In most states there are no such all encompassing laundry lists of do's and don'ts. Instead, it is left to the probate judge's discretion as to whether a given expenditure or investment is appropriate under the circumstances surrounding the individual disabled person's situation. While such adaptability may make sense in theory, in practice it can create a harrowing existence for the conservator.
Often probate judges informally adopt guidelines for investment and expenditure. The only problem with such a policy is that, more often than not, such guidelines are not published anywhere. Thus the Conservator must either rely on the expertise of the probate attorney he hires, to know the unwritten customs and mores of the particular probate judge or, before making any unusual or out of the ordinary expenditure, he must petition the court for permission to make the expenditure or investment. This, obviously, is the wiser course. for it is far better to know in advance that the court does not approve of a proposed expenditure or investment rather than after the particular transaction is made.
If the probate judge does not approve of the transaction and will not ratify it when asked to do so as part of the audit process, the conservator must reimburse the conservatorship estate from his/her private funds.
If the Conservator cannot replace the unapproved expenditure, the probate judge charges the bonding company. It then pays the amount back into the conservatorship and sues the conservator for breach of his/her fiduciary duties to the conservatorship.
What is the point of this explanation? Well there are several salient points to be made.
First, and foremost, it is the probate judge, NOT the Conservator who is really in control of the funds entrusted to the conservatorship.
When the conservatorship is for your disabled spouse and the assets subject to the conservatorship are assets which you had always considered to be "family assets" over which you (along with your spouse) had complete control; the total loss of that control may seem inappropriate to you.
Nevertheless the probate court makes no distinction between a spousal conservator and a child or for that matter a stranger. They are all bound by the same rules, policies and discretions of the probate judge. I think that it would be a bit redundant to elaborate at this point on the aspect of the aggravation implicit in such a conservatorship proceeding.
Probate is costly. Because of the nature of the system, before any extraordinary expenditure is made, most smart conservators will petition the court for permission before actual investment or expenditure. In an average conservatorship that means that about two or three additional petitions will be filed each year to cover extraordinary situations.
As always, the cost of the process varies from state to state.
However, annual petitions for extraordinary expenses, coupled with the annual audit process, will usually result in attorneys fees (for a relatively modest sized conservatorship) in the range of several thousand dollars per year. This just to keep the conservatorship operating properly.
How long will this process continue? Until one of two events occurs; the disabled person regains the ability to manage his/her own financial affairs or dies.
By the way, attorneys and conservators are usually paid for their services in probate upon the basis of "reasonable compensation". This means that both the attorney and the conservator maintain time records which attest to their efforts in the operation of the conservatorship and the time it took to exert those efforts. Once a year, usually at the accounting period, these time records are submitted to the court for approval and award of fee. In the St. Louis metropolitan area "reasonable compensation" for the attorney is deemed to be up to $250.00 per hour and conservator's time is valued at a substantially lesser per hour sum.