Sunday, June 6, 2010

My mother goes before the judge

OK, everybody take a deep breath.

Now hold it....hold it.
Let it out slowly like you're blowing out a candle.
Breathe deep. Hold it...hold it.
Exhale, slowly.
My 95-year-old, 100 lb.- mother has said yes in front of a judge to placing all of her assets in a revocable trust to be drawn up by her attorney and filed with the court next week. The decision came in a dramatic courtroom finale on Thursday.
In November, my mother's long-time attorney had recommended a conservatorship as a solution to the ongoing tug-of-war involving money, power of attorney and farm issues after my bi-polar sister called the police to report my mother had been kidnapped when I took her to lunch without my sister. Since then, I've heard about many similar family incidents where conflict erupts as an aging parent begins to lose it. The ultimate hammer: If you don't hand over this or do that, we'll put you in a home.
A conservatorship, said the attorney, would allow an independent third party appointed by the court to manage my mother's assets thus eliminating money as a point of contention among the three of us. A conservatorship may be set up even though the person is competent, which is my mother's case. It's just that at 95 with her vision and speech impaired by a stroke and in frail health, she could no longer read the paper work or stay on top of things. My sister had begun pressuring her to change power of attorney, issue her a debit card and write large checks to family members.
My mother first agreed to the conservatorship idea but then backed away when she found out how much a bank would charge for providing the administrative services...somewhere between .8 percent and 1.7 percent annual on her assets. So it was left to me through an attorney recommended by my mother's lawyer to petition the local court on behalf of my mother. At a March hearing, the judge appointed a temporary conservator.  As the June 3 follow-up hearing drew closer, my sister hired a separate attorney to argue that my mother did not need a conservator. My worst nightmare was about to aged mother sitting in a witness chair trying to answer questions about her checking account, her farm business and taxes. It would have been humiliating and depressing for everyone involved, especially my mother.
The morning of last week's hearing, the deal-making began among the attorneys with a new proposal from my mother's attorney -- a revocable trust for all my mother's assets with the bank as trustee.
Mother's attorney represented her as guardian ad litem, which means he could recommend to the court something in my mother's best interest, even if she didn't agree.
The revocable trust provides "flexibility and income to the living grantor" (my mother) and at her death transfers her property to the beneficiaries (me and my sister) without probate. The bank will be appointed trustee of mom's existing trusts and will take into the new trust all other assets.
As the court session began, the judge called the attorneys into his chambers to hear this proposal and explain to my sister's attorney that this was the way it was going to go. It was the job of my mother's attorney to explain to her that a revocable trust was worth the money.
In a Q&A session in the foyer, my mother -- dressed in magenta jacket and black slacks -- leaned on her cane while grilling three attorneys and the banker about the deal.
We went back into session with my mother and her attorney at a table in front of the judge. Everyone went out of their way to make sure the court record indicated that my mother was a competent person, capable of making her own decisions and aware of what was being proposed.
"Mrs. Adkins, do you agree to the revocable trust proposal, its costs and what you're giving up," asked the judge. After a long pause, my mother said, "I guess so." There was nervous laughter. But her answer was good enough.
My mother's attorney will file the paper work with the court and U.S. Bank's local trust department will begin consolidating my mother's assets, setting up a checking account that she and my sister (who lives with my mother most of the time) can use and begin negotiating with the tenant operator of my mother's farm.
The only way this can be revoked is if my mother goes back to court and convinces the judge it's not working out.
Was this an expensive way to resolve family conflict? Yes. Will this resolve all issues facing my family? Probably not. But with an independent third party in charge of the money, my hope is that my mother's life will become more peaceful and happier, that we can enjoy each other's company without the stress of money issues cropping up. That my mother's care can become the most important priority and we can all get along.
Many of us in our 60s face similar situations with aging parents in their 80s and 90s, who are ever so slowly losing control of their assets and finances, but don't want to let go of the control. My mother hasn't been actively managing her investments or farm business for years. Now, in the last years of her life, the worry of all this should be lessened, not just for her but for her family. We owe a debt of gratitude to my mother's attorney who knows the family well, who saw a course of action and guided us all to a positive outcome for all concerned. I'm breathing a lot easier.
Here is some of what I've learned about trusts.

Irrevocable trusts transfer assets before death and thus avoid probate. However, revocable trusts are more popular as a means of avoiding the probate process. If a person transfers all of his assets to a revocable trust, he owns no assets at his death. Therefore, his assets do not have to be transferred through the probate process. Even though the grantor of the trust died, the trust did not die, so the trust assets do not have to be probated. However, trusts avoid probate only if all or most of the deceased person's assets had been transferred to the trust while the person was alive. To allow for the possibility that some assets were not transferred, most revocable living trusts are accompanied by a "pour-over" will, which specifies that at death, all assets not owned by the trustee should be transferred to the trustee of the trust.
A revocable trust that may be altered or terminated during the grantor's lifetime. Since the trust may be altered at any time until the grantor's death, it is considered part of the grantor's estate and is subject to taxation. The property is passed on to the beneficiaries only after the grantor's death, and the revocable trust then becomes irrevocable. Trusts are estate-planning tools that can replace or supplement wills, as well as help manage property during life. A trust manages the distribution of a person's property by transferring its benefits and obligations to different people. There are many reasons to create a trust, making this property distribution technique a popular choice for many people when creating an estate plan.
The basics of trust creation are fairly simple. To create a trust, the property owner (called the "trustor," "grantor," or "settlor") transfers legal ownership to a person or institution (called the "trustee") to manage that property for the benefit of another person (called the "beneficiary"). The trustee often receives compensation for his or her management role. Trusts create a "fiduciary" relationship running from the trustee to the beneficiary, meaning that the trustee must act solely in the best interests of the beneficiary when dealing with the trust property. If a trustee does not live up to this duty, then the trustee is legally accountable to the beneficiary for any damage to his or her interests. The grantor may act as the trustee himself or herself, and retain ownership instead of transferring the property, but he or she still must act in a fiduciary capacity. A grantor may also name himself or herself as one of the beneficiaries of the trust. In any trust arrangement, however, the trust cannot become effective until the grantor transfers the property to the trustee.

1 comment:

  1. NASGA is an organization of victims and families working to expose and end unlawful and abusive guardianships/conservatorships -- a growing national epidemic.

    Guardianship wards are stripped of all rights: the right to decide where to live and whom to associate with, how to spend (or save) ones own money, to accept or refuse medical treatment --or even ask for a second opinion, marry, vote, etc. Most important, wards are stripped of the right to complain.

    With the fox guarding the henhouse and the hens muzzled, guardians and their attorneys can easily unjustly enrich themselves at the expense and to the detriment of the very person they have been court-appointed to protect.

    Many wards are forcibly taken from their homes and isolated in nursing facilities against their will - and family is not permitted to visit or have information or input regarding medical “care.” Wards die prematurely - alone and afraid. The devastation victims and families suffer at the hands of the system haunts them for the rest of their lives.

    And where do the victims go for help? Many go to the AG, only to be turned away because the abuse has been court-sanctioned. Convicted felons have more rights than guardianship wards.

    Visit NASGA at, or NASGA’s blog at for more information.

    Elaine Renoire