Incapacity, Conservatorships, and the Probate Court

Many people use wills to direct how their assets will be distributed after they die. However, few people plan for legal incapacity, which can occur suddenly and without warning. Wills have no utility while the person who created the will is living. A will has legal significance only after it has been admitted by a probate court.

Imagine that a loved one becomes incapable of managing their affairs – perhaps they cannot communicate, maybe they are unconscious for an extended period of time, or simply cannot understand what is going on around them. Trauma, illnesses such as dementia, or a surgical procedure gone awry are just a few of the real life situations that may give rise to legal incapacity. What medical decisions need to be made? Perhaps decisions on providing or withdrawing life saving or life sustaining medical interventions must be made. Who will make them? What are patient’s wishes in that situation?

If the incapacitated person has not planned for such a contingency, it may be necessary to go to the probate court for the appointment of a conservator. Conservatorship proceedings, particularly when someone is incapacitated, can be time consuming and expensive.

How will the incapacitated person’s financial affairs be handled? Bills may need to be paid. Assets such as a home or automobile may need to be protected and maintained. Financial accounts may need to be managed. Income, such as social security, pension, interest, or insurance proceeds may need to be deposited. Taxes may need to be paid. Perhaps one or more businesses must be managed. Dependents, such as minor children, may need to be supported. These kinds of situations are stressful; family members may not know what to do; financial institutions and healthcare providers may refuse to deal with family members for fear of inappropriately disclosing confidential information. Assets may be wasted or jeopardized.

While some may find it difficult to discuss, planning for incapacity can go a long way toward reducing the stress and uncertainty families face in such situations by having the legal measures in place in advance to manage the incapacitated person’s affairs. Fortunately, there are a number of legal tools available to provide for legal incapacity, so that many or all of these issues can be effectively dealt with without having to go to the probate court. Unfortunately, once a person becomes legally incapacitated, it is too late to create these measures if the incapacitated person hadn’t already done so before they became incapacitated.

The next installment in this series of articles will briefly review powers of attorney as a legal tool available in Connecticut to plan for incapacity. Other legal tools, such as appointment of healthcare representative, advance directives, living trusts, advance designation of conservator, and alternative ways of titling assets, such as survivorship, payable on death, and beneficiary designations will be examined in subsequent articles.

This article is for informational purposes only.  It is not intended to be, and should not be relied upon as legal advice.  Please consult a qualified attorney for advice regarding your particular situation.

Copyright© 2014 Domenick N. Calabrese. All rights reserved.

Incapacity, Conservatorships & the Probate Court

Incapacity Conservatorships & the Probate CourtProbate misconceptions mistakes and myths blog2016Incapacity Conservatorships & the Probate Court Blog

Wills: Myths, Misconceptions & Mistakes

cropped-img_1399.jpgMost people realize having a will is a good idea. It provides for the transfer of your assets after you pass away to the people and institutions of your choice. As an attorney and  probate judge, I’ve seen and heard myths, misconceptions and mistakes in this area.

 

Some people believe it’s effective to simply write a note directing who will receive their assets after they die. This won’t work in Connecticut. Connecticut has strict requirements for how a will needs to be executed. If these requirements are not carefully followed, the note won’t be recognized as a valid will.

 

The same principle applies if someone wants to make changes to an existing will. Crossing out and writing in provisions to an existing will generally won’t be valid. If someone wants to change their will they either need to execute a new will or execute a codicil to the current will. The laws of will execution also apply to how a codicil must be executed in order to be valid.

 

Another misconception is that if someone dies without a will, all their assets will go to their surviving spouse. This is only true if the person who passed away had no children or surviving parents. Otherwise, the children or surviving parent will receive some portion of the decedent’s probate assets. If someone passes away survived by a spouse and children, the surviving spouse receives the first $100,000 and half of everything over $100,000. The children receive one half of everything over $100,000. However, if one or more of the children are not also children of the surviving spouse, the surviving spouse receives 50% of all the decedent’s assets and the other 50% are divided equally among the children. Stepchildren of the decedent are not recognized as heirs at law unless there are no surviving blood relatives of the decedent.

 

Photocopies of a will are not legally valid – only the original signed copy of the will may be admitted to probate. If the original cannot be located, additional proceedings in the probate court are necessary to allow admission of the photocopy.

 

All wills name an executor – someone or an institution (such as a bank or trust company) responsible to administer the estate. However, the executor named in the will does not actually become the executor unless they are willing and able to serve as executor and they are appointed by the probate court. Often people state they are the executor of a living relative’s estate, but that is not the case until their relative dies and they are appointed by the probate court.

 

Wills have no legal authority until admitted to the probate court. If someone becomes legally incapacitated, their will has no effect on the management of their assets while they are alive. Trusts, advance healthcare directives, powers of attorney, appointment of healthcare representatives and advance designation of conservators are legal tools used to plan for incapacity.

Prince: No Will, So What’s the Way?

The old adage, “where there’s a will there’s a way” might not have been intended to apply to wills people have for their estates.  However, wills do provide direction for who gets a person’s assets after they pass away.  But what happens when a person dies without a will?

The recent untimely death of music superstar Prince has drawn attention to what happens when someone dies without a will.  Here’s what’s been reported about Prince so far: he had no spouse; he had no surviving children or grandchildren; he had five siblings who are living, four of them are half siblings.

It’s likely that Prince’s assets at the time of his death were very significant, and right now it appears he had no will.

When someone dies without a will, state law determines who receives the deceased person’s assets and how much of the total estate goes to each person.

Let’s imagine that Prince was a Connecticut resident (which he in fact was not).  Based on the information above, his estate would be divided equally among his siblings – there would be no distinction between full and half siblings: all would share equally after expenses and claims are paid.

Persons who stand in line to inherit from a deceased person when there is no will are called heirs.  Heirs have legal rights.  Even if there is a will, heirs must receive notice of the initial probate hearing to give them the opportunity to attend the hearing and object to or to support the admission of the will to probate.

Wills usually name someone to be the executor of the estate.  The executor, only after appointment by the court,  is responsible for protecting the assets of the estate, administering the estate in probate court, and using the assets of the estate to pay administration expenses, creditors, and beneficiaries.

I sometimes hear people say that they are a living relative’s executor, but that is not an accurate statement. A person does not become an executor unless and until the person who has a will dies, the will is admitted to probate, the person named in the will as executor is willing and able to serve as executor, and  the probate court appoints the executor.

When someone dies without a will, or none of the executors named in the will are able to serve, an administrator will be appointed by the probate court.  The administrator’s role is similar to that of an executor. It’s common for the administrator to be a relative of the person who died.

Some of the speculation as to why Prince had no will involve common reasons why many people should have wills.  Having a family that includes minor children increases the need for someone to have a will.  Among other things, a will allows a parent of minor children to name a guardian for those children in the event both parents pass away.  Since Prince had no surviving children, that reason for having a will likely doesn’t apply in his case.

 

Because Prince had no spouse, tax planning for the benefit of a surviving spouse  does not apply.  However, it’s likely that if Prince’s assets were valued in excess of $5.4 million at the time of his death, his estate will have federal estate tax liability. Federal estate tax liability may be reduced by leaving gifts to charitable organizations in a will or trust.

Proper estate planning increases the likelihood that someone’s assets will go to the people and organizations of their choice. With no will, assets will go to heirs at law. Many people have a limited or even incorrect understanding of what this means for them and their assets after they pass away.  The objectives of estate planning go beyond  providing for a surviving spouse or children, and minimizing federal and state estate tax liability. Proper estate planning should be based on the goals of the person for whom the estate plan is created. Competent estate planning attorneys take the time to understand their client’s asset portfolio and their client’s values and objectives; explain options to the client, and create an effective estate plan customized for each client.

 

This blog is for informational purposes only and is not intended to be, nor should it be relied upon as legal advice.  Please consult with a competent attorney for advice as to your particular situation.

COPYRIGHT 2016 by DOMENICK N. CALABRESE. ALL RIGHTS RESERVED.  COPYING, DISSEMINATION OR USE WITHOUT THE PERMISSION OF THE AUTHOR IS STRICTLY PROHIBITED.