Death and Taxes Blog

Here is the trailer for an upcoming romantic comedy called Life As We Know It, starring Katherine Heigl and Josh Duhamel.

So why am I posting this here? Because the film revolves around two single people who are drawn together when they are named as co-guardians of the daughter of their mutual friends. Since this is a romantic comedy: life lessons are learned, flirting takes place, poop is smeared on someone's face. Call me unromantic, but I want to make a few points about the trailer and how it relates to guardianships:

1. If you die unexpectedly, people should not be surprised to learn that they are named as guardians of your minor children. TALK TO POTENTIAL GUARDIANS. ASK THEIR PERMISSION. (People actually do say "no.")

2. You are not required to choose your children's godparents as their guardians.

3. It may not always be a good idea to name co-guardians. (One note: there are actually two types of guardians, the guardian of the person and the guardian of the estate. These are two different roles -- one has to do with acting as the parent, and the other has to do with managing the ward's finances. You can choose two different people for these two jobs, and that's fine, but the trailer suggests that the two main characters share both jobs.)

4. It is an especially bad idea to name two people with no connection to each other as co-guardians. These people have to work together, and if they don't know each other -- or have a combative relationship (due to a hi-larious first date gone awry) -- that can make things difficult.

5. Don't require your guardians to live in your house. They're already doing you a solid by taking care of your kid(s). Make it easy on them -- let them have access to estate/trust funds to minimize the impact. (Let them put an addition on their house if needed, or even help them buy a new, bigger house.)

So, to review:

-ask potential guardians in advance if they will take the job

-choose appropriate individuals

-think about how acting as guardians will affect the lives of the people you choose

"The Ethicist" column in today's New York Times magazine addresses the issue of whether to tell your friends that you are removing them as guardians of your children under your Will. The column is here.

I'm not an ethicist (insert attorney joke here), but I agree with Randy Cohen that there is no need to tell the friends about the switch. Especially when you are switching to family members (most people understand that blood is thicker than water). Maybe I feel this way because my wife and I did something similar. We named our friends as guardians of our daughter, but then switched to my sister and her husband once they got settled and had kids, and we saw that their parenting style matches ours.

A similar ethical issue (not discussed in "The Ethicist") involves telling people that they are named as guardians. I'm always surprised that people DON'T tell their friends/relatives that they have named them (or plan to name them) as guardians. I know this always makes for a heart-warming film ("lovable moppet(s) show up at the door of self-absorbed yuppie, who then discovers the value of family"), but it's significantly less heart-warming in real life. My advice: talk to those you plan to name, BEFORE you do so. (They may say no. That's what happened to the people my in-laws asked, when my wife was a kid.) And talk to those you have named, AFTER you do so, to fill them in on how things will work.

This UPI article states that the daughter of actor Peter Falk -- famous for his roles in "Columbo" and "Wings of Desire" -- is seeking a conservatorship. (Conservatorship is just another word for guardianship.) Catherine Falk says that her father is suffering from Alzheimer's disease and dementia, and she is concerned that he "can easily be deceived into transferring away property."

Guardianships can do a lot of good things, but people tend not to like them -- they are very expensive, very time-consuming, and (as we see from the above) very public. A couple of notes on avoiding guardianship:

1. Guardianship can usually be avoided if the person in question has the appropriate documents. For instance, if you have a living trust, and all of your property is owned by or payable to the trustee of that trust, then no guardianship should be needed if you become disabled. Instead, you would step aside as trustee, and the successor trustee would use all trust assets to care for you.

2. A quick and dirty alternative to a living trust (at least, for purposes of disability) is a power of attorney. Actually, in Illinois, that would be powerS of attorney (one for health care and one for property). These documents allow you to appoint an agent to make health care and property decisions for you if you cannot do so.

However, the key to the above documents is timing. If someone is showing signs of dementia, it may already be too late for them to execute these documents.

Amy Winehouse is a really talented singer -- she's popular with critics and with the public. (If you haven't tried it, you may want to check out her CD "Back to Black," in which she drags the girl group sound of the 60's into the 21st century.)

Ms. Winehouse is famous for her singing and her personal style (think John Waters Baltimore with a dash of punk), but she is also becoming increasingly famous (or perhaps "infamous") for what euphemistically might be called "struggles" with alcohol and drugs. Ms. Winehouse's mother is trying to reach out to her -- see this story.

In Illinois, there's a solution more concrete than "trying to reach out to an adult child in trouble." Article XIa of the Illinois Probate Act deals with guardianships for disabled adults, and the definition of "disabled person" (in Section 11a-2) includes "a person 18 years or older who... because of gambling, idleness, debauchery or excessive use of intoxicants or drugs, so spends or wastes his estate as to expose himself or his family to want or suffering." In other words, someone can petition the court to find a person with drug or alcohol problems to be disabled, and be appointed as that person's guardian. This could allow the guardian to make decisions about the ward's finances and health care, among other things.

The court battle over 104-year-old socialite Brooke Astor has been well documented in the news media (Wikipedia has a nice summary here).   A settlement agreement was recently signed by the parties, and now the bills are starting to come due.  According to this New York Times article,...

In the seven weeks since the agreement, those involved in the case have filed bills with Justice John E. H. Stackhouse of State Supreme Court in Manhattan for fees totaling about $3 million for the services of 56 lawyers, 65 legal assistants, 6 accountants, 5 bankers, 6 doctors, 2 public relations firms and a law school professor. Under state law, such payments would come out of Mrs. Astor’s assets, valued at over $120 million.

Sheesh!  Here's more:

The justice denied payments for the public relations firms, the time lawyers spent talking with reporters and the hours logged preparing the fee applications themselves.

I've never hired a PR firm or talked to reporters about a pending case -- I think kind of stuff is generally worthless.  But I will say that -- at least in Cook County -- judges will NOT allow attorneys to be paid for the time they spend preparing their fee petition.  Which makes perfect sense, doesn't it?

If you read a lot of the cases that involve undue influence of an elderly person, certain patterns become clear.  There tend to be a lot of cases involving younger family members (children and grandchildren) trying to take advantage, as well as some cases involving unscrupulous attorneys.  Another group of individuals who show up with some regularity in these types of situations: police officers.

In re Estate of Theodore Hoellen is one such case, involving a Chicago cop.  The facts are fairly typical for this type of situation:

The record shows that respondent [Donald L. Owsley], a Chicago police officer, first met Hoellen in the summer of 1999 when he responded to a 9-1-1 call from Hoellen's neighbor after Hoellen mistakenly entered the neighbor's home believing it was his home. After the incident occurred, respondent began regularly visiting Hoellen at his home. Hoellen's case was referred to the Public Guardian's office based on allegations that respondent was financially exploiting Hoellen, who lived alone and suffered from dementia.

In most of these cases, the exploitation is only uncovered after the elderly person dies, but here the Cook County Public Guardian's office was on the case.  They "filed a five-count amended petition for issuance of a citation to recover assets alleging that over the years, respondent had engaged in a course of conduct designed to manipulate and financially exploit Hoellen, an 89-year-old physically and mentally impaired senior citizen who, it was argued, was unable to protect himself from such exploitation."  Citations to discovery information and recover assets are used a lot in the deceased estate context, but can be used by guardians of living individuals as well.

Last June I blogged about probate litigation involving the widow of a former Eli Lilly executive,  Robert E. Koffenberger -- the link is here.  Now there's word of a probate (guardianship) case involving Eli Lilly's sole surviving great-grandchild, Ruth Lilly (who is 90).  This article discusses in more detail, although the way it's written raises a lot of questions:

1. The article says that "the family of Ruth Lilly wants the court to give them supervision over all of her affairs," but it also notes that Ms. Lilly has been "under court supervision for the handling of her financial affairs" since 1981.  It goes on to say that the petition filed by Ms. Lilly's heirs "proposes to give oversight for Lilly's personal and medical decisions to a niece and nephew Ted Lilly."  Does that mean Ms. Lilly currently doesn't have a guardian of the person (to make health care decisions and the like)?

2. It's unclear from the article who is currently acting as the guardian of Ms. Lilly's estate.  According to the article:

Pictures from a 1998 Eyewitness News investigation showed a frail Lilly who sources said had only limited awareness of her circumstances at the time. The investigation documented questionable spending for things like lavish overseas trips for large groups.

A resulting court review prompted an acknowledgement of lax oversight by National City Bank and a reduction in fees by both the bank and Lilly's personal attorney, Tom Ewbank.

Was National City Bank acting as guardian of the estate?  Was Mr. Ewbank?  I assume it was Mr. Ewbank, since he evidently consented to the above petition, but then why did National City Bank have any duty of oversight regarding Ms. Lilly's finances?  And if the guardian of the estate was acting inappropriately in 1998, why weren't they (or he) removed?

I've spoken about the case of Lillian Glasser -- the New Jersey woman who was taken against her wishes from Florida to Texas by her daughter -- on a number of occasions:

1/4/06 (Thoughts on the Lillian Glasser Case)

1/10/06 (More on Lillian Glasser)

1/16/06 (Lessons from the Lillian Glasser Case)

2/14/06 (Lillian Glasser and the Second Power of Attorney)

My previous posts have focused on the probate litigation aspects of the case, as opposed to the guardianship aspects.  The reason for this is simple: it's impossible for me to have any kind of educated opinion about Mrs. Glasser's mental capacity.  I'm not a medical expert, and I haven't spoken with Mrs. Glasser, so rather than go Bill Frist on the situation, I'd prefer to remain silent. 

That being said, I have handled guardianships in the past, so I know about guardianship procedure.  I have continued to receive e-mails about the proceedings from Mrs. Glasser's son, Mark, and the thing that struck me was this: even if Mrs. Glasser "wins" in the guardianship proceeding, she has in a very real way "lost" because of the immense cost of the proceeding.

Mr. Glasser recently forwarded me an e-mail showing legal and related fees incurred by his mother in the Texas guardianship proceeding. 

Temporary guardian: $71,286

Attorney for temporary guardian: $33,955

Guardian ad litem: $98,856

Attorney for guardian ad litem: $164,375

Mediator: $10,887

Bookkeeping: $3,401

Guardianship accounting: $15,941

The total of the above amounts is $398,701. 

As Mr. Glasser notes, "[t]his is only fees not care for my Mother -- This does not include several hundred thousand dollars in expenses that have not yet been either considered or approved." It also doesn't include New Jersey temporary guardian fees and travel expenses, as well as attorney's fees.  These fees are currently pending in New Jersey and amount to about $125,000.

It's tricky business deciding whether a person is incapacitated and, if so, who should act as their guardian.  However, it can be done.  And it should be done fairly quickly, and with attention to the fees involved.  The fact that Mrs. Glasser has a lot of money doesn't mean that the parties to the guardianship proceeding should be allowed to siphon huge amounts of that money out of her estate.

This month's Illinois Bar Journal has an interesting discussion of the recent 4th district case entitled In re Estate of Doyle (the discussion is available to members of the Illinois State Bar Association here).

The Doyle case involved a power of attorney for property executed by Mary Doyle in favor of her daughter, Rose Marie Doyle, in 1998.  Mrs. Doyle then tried to revoke the power of attorney.  In 2004, Mrs. Doyle's son and son-in-law sought a guardianship for Mrs. Doyle, which was eventually granted (apparently because the court found that Mrs. Doyle's daughter had abused her position as agent under the power of attorney).  The question before the court was this: was Mrs. Doyle's revocation of the power of attorney effective, even though Mrs. Doyle may have executed such revocation when she was incompetent?

The case generated three opinions:

The majority ignored the question of Mrs. Doyle's attempted revocation, finding instead that the court had "implicitly revoked" the power of attorney under a provision in the Power of Attorney Act (755 ILCS 45/2-10) allowing an agent to be removed for cause.

The concurring opinion agreed with that result, but said that an incompetent person can't revoke a power of attorney.

The dissent agreed that an incompetent person can't revoke a property power of attorney (noting that revocation of a health care power of attorney by an incompetent person is specifically allowed under the statute).  But the dissent went on to say that a power of attorney is not implicitly revoked through a guardianship proceeding -- instead, you have to specifically use the procedure set forth in §2-10.

The majority's opinion has evidently been somewhat controversial among practitioners, since it appears to weaken the effect of §2-10.

"Judge must decide if it's love or Alzheimer's"

Now there's a catchy headline, to an article published here.  The story will sound familiar to attorneys and others working with the elderly.  Vic Varallo is 83 years old, and even his lawyers admit that he is suffering dementia, and is probably in the early stages of Alzheimer's disease.  A conservator (i.e. guardian) has been appointed to manage Mr. Varallo's affairs, but Mr. Varallo would really like to marry his 48-year-old fiancée, Sheila White.  Mr. Varallo's children object.

On the one hand, we have a valid concern about whether Mr. Varallo is competent to make his own decisions (especially considering that he transferred more than $1 million in property to Ms. White, which she later returned to Mr. Varallo's estate under a settlement agreement).  On the other hand, we have a respected man who has reached the last years of his life, and believes that he has found happiness.

I'm sure there are times when it's a lot of fun to be a judge.  This is probably not one of those times.

An interesting question was posted on the Illinois State Bar Association transactional law discussion grouplist yesterday.  The fact scenario was something like this:

Minor (let's call him Greg) has a guardianship in Cook County Probate Court.  The assets in Greg's guardianship estate are pretty substantial (let's say $1 million).  Greg, who may have some emotional problems, turns 18 next month -- this is the age when, under Illinois law, the assets in the guardianship estate must be released to the ward.  Greg's guardian doesn't believe Greg is mature enough to handle the money. 

Can anything be done to stop the assets from being released to Greg next month, when he turns 18? I think the short answer is "no," unless you can somehow make the argument that Greg is mentally disabled, and succeed in opening a guardianship estate for him.  Another possibility would be to encourage Greg to place his assets in a trust that restricts his own access to the funds.  Why would Greg want to do this?  The main reason is that the adults in Greg's life could make it worthwhile for Greg to do it, either by wielding a carrot (set up a trust and we'll buy you a car) or a stick (if you don't set up a trust, we'll cut you out of our Wills).  Is that fair?  Maybe not, but in my experience it happens fairly often.

Section 11-3(a) of the Illinois Probate Act sets forth the requirements for acting as the guardian of a minor.  Until recently this section prohibited all convicted felons from acting as such a guardian.  However, this prohibition was recently changed slightly, to prevent convicted felons from acting...

unless the court finds appointment of the person convicted of a felony to be in the minor's best interests, and as part of the best interest determination, the court has considered the nature of the offense, the date of offense, and the evidence of the proposed guardian's rehabilitation. No person shall be appointed who has been convicted of a felony involving harm or threat to a child, including a felony sexual offense.

Back in August, I wrote about the battle between the Cook County Public Guardian and preservationists.  The Public Guardian handles the financial affairs of 91-year-old Carolyn Howlett, who has Alzheimer's Disease.  Mrs. Howlett owns and lives in the carriage house of the Avery Cooney estate, which was designed by Frank Lloyd Wright.  The carriage house roof is in disrepair, and the Public Guardian wanted to fix it cheaply, so that Mrs. Howlett could continue to live there.  However, historic preservation groups wanted the roof to be repaired in a (more costly) way that preserves the building's character.

A solution to this impasse was finally reached, and the Riverside/Brookfield Landmark has the details here.  Essentially, the carriage house has been sold to a third party, but Mrs. Howlett retains a life estate in the house.  As a result, she can stay in the house for the rest of her life, and the third party becomes the owner at her death.

This is a good solution, and one that doesn't get used as often as it should.  Here, it's a real win for Mrs. Howlett: she gets to stay in her home, the roof is fixed, and her estate gets some money from the sale.  Note that the fair market value of a house with a retained life estate is less than the fair market value of a house with no such retained life estate.  How much less?  Presumably the parties to the transaction consulted actuarial tables to determine Mrs. Howlett's life expectancy, and then used an agreed-upon interest rate to figure the present value of the buyer's future interest. 

Grant D. Griffiths runs a very good blog with the self-explanatory title of Kansas Family and Divorce Lawyer.  Practitioners of family law and estate planners sometimes work on the same issues, and Mr. Griffiths focused on an area of concern to estate planners in a post dated August 7, on "Choosing a Guardian for Your Children."  If you are having trouble choosing guardians for your minor children as part of the estate planning process (or even if you aren't), this post is a must-read.

The Chicago Tribune has recently been covering an interesting, guardianship-related story (see here and here - registration required).  It centers on 91-year-old Carolyn Howlett, who is a resident of suburban Riverside (close to my home of Oak Park).  Riverside is best known as a planned community designed by landscape architect Frederick Law Olmstead, but it also has a couple of houses designed by Frank Lloyd Wright.  The most famous of these houses is probably the Avery Coonley estate, pictured here.  Mrs. Howlett and her late husband bought a carriage house on the estate back in the 1950's, and she continues to reside there.  However, Mrs. Howlett now has Alzheimer's disease, and the Cook County Public Guardian's office is acting as her guardian.  (The Public Guardian steps in when a Cook County resident is disabled, has an estate of at least $25,000, and has no one else willing or able to act as guardian -- see this site for more information.)

A dispute has now arisen between the Public Guardian and preservation groups, and centers on the (deteriorating) roof of Mrs. Howlett's residence.  The Public Guardian wants to fix the roof so that Mrs. Howlett can continue to live there, but because funds are limited, their solution is to install an asphalt replacement roof (cost: $14,000).  The preservationists -- including a University of Chicago professor who lives on the estate -- say that a historically-appropriate roof should instead be installed, at a cost of $250,000.

The solution seems quite clear to me: if the preservationists want a historically-appropriate roof on the carriage house, they should pay for it; if they aren't willing to do so, then the Public Guardian should be allowed to proceed in a way that best serves the ward (i.e. fixes the roof and allows Mrs. Howlett to stay in her home while spending the smallest amount of money possible for repairs).  Is this really something that requires a debate?

Question 1: Where can I make my wishes known regarding my choice of guardian for my minor children?

Answer 1: The typical place to designate a guardian is in a Will.  However, it's important to stress that the statute allowing designation of a guardian (755 ILCS 5/11-5) says it can be done in "any writing, including a will."  In other words, it's perfectly acceptable to designate initial and successor guardians in some other document.  That being said, the guardianship designation should adhere to some execution formalities -- it "must be witnessed by 2 or more credible witnesses at least 18 years of age, neither of whom is the person designated as the guardian."

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Question 2: Who may act as a guardian of a minor in Illinois?

Answer 2: A person who the court finds is capable of an active and suitable program of guardianship for the minor(s) and who:

1. is at least 18 years old;

2. is a U.S. resident;

3. is not of unsound mind; and

4. is not himself or herself a disabled person (as defined in the Illinois Probate Act).

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Question 3: Are there different types of guardians?

Answer 3: Yes -- there's a guardian of the person and a guardian of the estate.  These roles can be filled by the same people or by different people.  Under the statute, the two types of guardians are distinguished as follows:

"The guardian of the person shall have the custody, nurture and tuition and shall provide education of the ward and of his children...."

"The guardian... of the ward's estate shall have the care, management and investment of the estate, shall manage the estate frugally and shall apply the income and principal of the estate so far as necessary for the comfort and suitable support and education of the ward [and the ward's dependents], or for any other purpose which the court deems to be for the best interests of the ward...."

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Question 4: I don't like my minor child's other parent, and I would prefer that he or she not be allowed to act as my minor child's guardian if I die.  Can the other parent be stopped from acting as guardian?

Answer 4: Probably not.  With respect to guardianship of the person, 755 ILCS 5/11-7 makes it clear that "[i]f one parent is dead and the surviving parent is competent to transact his own business and is a fit person, he is... entitled [to the custody of the person of the minor and the direction of his education]." 

Another provision of the Illinois Probate Act states that the Court lacks jurisdiction to even deal with a petition for the appointment of a guardian if "the minor has a living parent, adoptive parent or adjudicated parent, whose parental rights have not been terminated, whose whereabouts are known, and who is willing and able to make and carry out day‑to‑day child care decisions concerning the minor...."

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Question 5:  Does my minor child get a say on the question of his or her guardian?

Answer 5:  If the minor child is 14 years old or older, the minor child may nominate individuals to act as guardian of the person and the estate.  Such nominations are, of course, subject to court approval.

I've spoken before about how those who administer a decedent's estate owe certain fiduciary duties to the beneficiaries of the estate.  This is also true of those administering a guardianship estate.  A guardianship estate is created for a person who is living but who can't care for himself or herself (either because he or she is a minor or because he or she is disabled).  In those cases, a guardian (in Illinois) or conservator (in some other states, including Michigan) is appointed to deal with the affairs of the person for whom the guardianship was created (aka the ward).

Because the ward is alive, there are a lot of procedures in place to protect this person's interests -- that's why guardianship estates tend to be more time-consuming and expensive to administer than probate estates.  Unfortunately, you still occasionally hear about cases like this one, where a conservator stole money from the estates of various wards.  To make matters worse, the conservator was an employee of the county, and was appointed as the guardian of estates as part of her job.  (In Cook County, the Office of the Public Guardian can be named as guardian when no friend or family member of the ward is willing or able to take this job.)

I talked about the connection between elderly drivers and probate litigation a month ago.  The idea is that family strife can result when a parent falls in the grey area between incompetent and fully competent.  Usually the dispute arises among the parent's children, in deciding to what extent dad can't care for himself or mom needs to have decisions made for her.  But sometimes the dispute can erupt between the parent and the children.  As this article states, Joan Bennett Kennedy is unhappy that her children sought to become her guardian, and may be trying to retaliate by selling her Cape Cod home.  Will the children be able to prevent the sale by extending their guardianship over her?  Will the children continue to maintain a united front?  Stay tuned.

Joan Bennett Kennedy is back in the news after she was found unconscious on the street.  I wrote about her guardianship a few weeks ago, here. 

Having a guardianship doesn't necessarily mean you are under "house arrest" -- the amount of supervision provided by a guardian to a ward will vary on a case by case basis.  The question of supervision becomes more difficult when the ward is the guardian's parent -- you want to respect your mother or father's independence while also acknowledging that your parent may need some extra care.  It sounds like Mrs. Kennedy's son, U.S. Representative Patrick Kennedy, is struggling with this issue right now:

"You want to make sure there is someone there for her all the time ... but at the same time you don't want to encroach on her privacy too much.  When things like this happen, it makes you feel as though maybe you should have done more to make sure there is someone with her 24/7 and perhaps that might become necessary."

The Kennedys may have more money and celebrity than most families, but with respect to issues like this one, they're no different than any other family.

According to this Boston Globe article, the three children of Joan Bennett Kennedy -- the 68-year-old ex-wife of Senator Edward Kennedy -- have been named as her guardians.  Mrs. Kennedy is not disabled in the traditional sense of the word, but she is evidently an alcoholic.  Apparently her children were able to argue successfully that their mother's condition is a mental illness (a requirement under Massachusetts law).  Establishing a guardianship for an alcoholic would probably be easier to do in Illinois, where (in section 11a-2 of the Probate Act) the definition of disabled person includes a person who "because of gambling, idleness, debauchery or excessive use of intoxicants or drugs, so spends or wastes his estate as to expose himself or his family to want or suffering."