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Investing in Family

Throughout the years, we are constantly taught, admonished, reminded that we must invest. We must invest in our education by focusing on our studies or by taking student loans to complete our degree so that we can increase our earning potential and job satisfaction. We are taught that we must invest in our retirement by saving a portion of our earnings in an IRA or 401(k). We eventually, for those of us who have them, invest in our children by saving for their own education and by making sure to catch their baseball or field hockey games even if it means going back to the job or office and pulling a late night as soon as the game ends.

Looking back, as teenagers we start our flight from the nest and comforting wing of our parents or guardians with our desire to establish independence. An important part of our passage into adulthood is separating ourselves from those who invested in us so that we can invest in ourselves. And, before we know it, our parents have aged into retirement. To your eyes, are they enjoying themselves? Do they travel? Do they engage in hobbies? Are they experiencing what you grew up hearing them say they would hope to experience in retirement? Do they get to spend time with you or with the grandchildren? Are they getting to relish in the satisfaction of seeing you thrive on their investment and sacrifice in you?

Eventually, the caregiver becomes the cared for. It is worth talking to your parent or guardian about long term care insurance or whether they saved enough for retirement to self-insure for anticipated lifetime medical and long term care expenses. It can affect your ability to invest in your own children or in your own retirement if you have to take time away from work or your young family to become a caregiver or untangle a legal morass where your parents did not properly plan.

Help your parents plan for themselves. You are a major part of your parents’ life story and their future. We spend such a large part of our lives doing the things we do not want to do – chores, commuting, planning, even sleeping – that we should truly enjoy the small moments. And one way to ensure you and those who invested in you will get to do just that is to talk about estate planning and investing for the years to come.

Barrett R. King, Esq.
King|Hall LLC
410-696-2405
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
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A Primer on Guardianships – Part Three – Guardianship of the Property

From one broad perspective, a person can be understood to have control over two sets of decisions in their lives: decisions affecting their person and decisions affecting their property. These are commonly reduced to healthcare and personal decisions (e.g., what medical treatment I receive or where I live), or financial decisions (e.g., what bank holds my money).  For a person who lacks capacity to make these decisions, there is a need to have the proper incapacity planning in place.

For financial decisions to be made by another person, there needs to be a financial power of attorney (“POA”) in place.  These POAs can come in many varieties.  Most financial institutions will have their own forms.  The Maryland Legislature and the Attorney General for the State of Maryland have created a specific form, which must be accepted by banks and financial institutions in the State of Maryland – with some limited exceptions.  Many attorneys will also have their clients sign a separate durable power of attorney which is tailored to their clients’ wishes.  When a person becomes incapacitated and does not have the planning in place, then their loved ones may be left with little alternative to filing for guardianship of the property.

An incapacitated person may not need a guardian of the person if there is an advance medical directive in place, or their loved one is experiencing little issue serving as a health care surrogate.  The management of their property may pose a more difficult challenge.  Banks are reticent to deal with someone who is not named in a POA.  Legal advisors will not release documents.  Simply getting information about assets is difficult without a POA.

The Petition for Appointment of a Guardian of the Property must be filed where the “alleged disabled person resides, even if the person is temporarily absent.” Md. Rule 10-301(c); Estates & Trusts § 13-202.  (Note that temporarily absent is not defined in the statute, but an often seen context is where a person is incapacitated by an injury and is receiving medical treatment in a different county.)  The rule is somewhat different for someone who is not a resident of the State of Maryland.  The practitioner should look at the situs (location) of any property or file where a guardianship of the person would be properly filed.

The Petition for Appointment of a Guardian of the Property must also include two certificates signed by medical doctors (or one can be signed be a licensed psychologist or licensed clinical social worker) attesting to the alleged disabled person’s need for a guardianship.  The rules are different for somone who is a beneficiary of the United States Department of Veterans Affairs (the “VA”).  The VA can supply a certificate in lieu of the two certificates previously noted though for practical purposes it may be easier to get the two physicians’ certificates.

The Petitioner (the one filing for guardianship) has to meet the burden of proving that the alleged disabled person (“ADP”):

  • Is unable to manage his property and affairs effectively because of physical or mental disability, disease, habitual drunkenness, addiction to drugs, imprisonment, compulsory hospitalization, confinement, detention by a foreign power, or disappearance; and
  • Has or may be entitled to property or benefits which require proper management.

Estates & Trusts § 13-201(c).  After a bench trial and a finding of the need for a guardian of the property by a preponderance of the evidence (which means that it is substantially more likely than not that it is true, and is a less rigorous standard than clear and convincing evidence standard necessary for guardian of the person), the judge will appoint a guardian of the property.  There is no right to a jury trial for a guardianship of the property.

Filing for guardianship may be a difficult process with unique challenges for those who do not handle these on a regular basis.  If you believe that you need to file for guardianship, then call for a free consultation.

David A. (Andy) Hall, Esq.
King|Hall LLC
410-696-2045
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
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A Primer on Guardianships – Part Two – Guardianship of the Person

Many times clients will come for an appointment with an elder law attorney because their spouse or parent is no longer able to communicate decisions about their health or person.  This can be the result of a progressive condition such as Alzheimer’s disease, or from a sudden onset, such as a fall resulting in a traumatic brain injury (“TBI”).  The consequence can be the same if the alleged disabled person (“ADP”) does not have a healthcare power of attorney (“POA”) or advance medical directive (“AMD”) in place.  Many Americans do not have incapacity planning documents.

A healthcare POA or AMD allows the person nominated to serve as the agent for the ADP.  This means that the agent can make healthcare and other personal decisions for the person that is no longer able to communicate those decisions.  The most common context is making decisions about healthcare matters, i.e., whether to select a certain course or treatment, or whether to decline treatment because the ADP has made their wishes known regarding when they no longer want treatment.

Without this document, then a loved one can make decisions for the ADP pursuant to the Maryland Health Care Decisions Act as codified in Md. Code, Health Gen. Art. §5–605.  Where the ADP has not nominated a person, then after two physicians determine that the person can no longer make decisions for himself, then the following people may serve as surrogate (in priority of the order listed):

  • A guardian for the patient, if one has been appointed;
  • The patient’s spouse or domestic partner;
  • An adult child of the patient;
  • A parent of the patient;
  • An adult brother or sister of the patient; or
  • A friend or other relative of the patient who meets the requirements

Id. While this statutory recognition is great for ad hoc or crisis situations, it may not be a viable long term solution for clients.  Sometimes the ADP’s illness will drive them to fight against decisions which are objectively being made in their best interests.  Then the loved one in that situation will want the imprimatur of a court order.

The Circuit Court in the Maryland County where the ADP resides or is admitted to receive medical treatment is the proper venue for filing for a guardianship and it has the authority to appoint a guardian.  Md. Rule 10-201; Estates & Trusts § 13-704(a)(2).  The Petition is the document whereby a client (through her attorney) requests that the court appoint someone as guardian.  Among other basic informational items, the Petition will need to include: a description of less restrictive alternatives to guardianship that have been attempted and failed; facts as to the need for a guardianship; and two certificates signed by medical doctors (or one can be signed be an licensed psychologist or licensed clinical social worker) attesting to the ADP’s need for a guardianship.  The timing of the certificates is important as one needs to be completed within 21 days of filing the petition.  A seasoned guardianship attorney will give you a checklist of the required documents and information in order for the Petition to be accepted by the Court.

The Petitioner (the one filing for guardianship) has to meet the burden of proving that the ADP:

  • Lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person
  • Because of any mental disability, disease, habitual drunkenness, or addiction to drugs,and
  • That no less restrictive form of intervention is available which is consistent with the person’s welfare and safety

Estates & Trusts § 13-705.

The Court will appoint an attorney for the ADP, and it is very likely that the court appointed attorney will be paid out of the ADP’s assets.  For a married couple, this can mean that the two parties will be paying for both sets of attorney’s fees.  It can seem counter-intuitive to have to pay for an attorney to fight against you, but a guardianship seeks to take away the inalienable right of self-determination regarding one’s person.  A court will not do so lightly.

Consult with your fiduciary litigation attorney to go over the options regarding a loved one who can no longer make decisions for themselves and has not executed incapacity planning documents.  If you have not already done so, then consult with an estate planning attorney to prepare for incapacity.  It is truly a case where, as Benjamin Franklin said, “An ounce of prevention is worth a pound of cure.”

David A. (Andy) Hall, Esq.
King|Hall LLC
410-696-2045
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
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A Primer on Guardianships – Part One – Introduction

Potential clients will often come into our office because their loved one is no longer able to manage their financial affairs or health care decisions due to a disabling event or disease.  One study suggests that nearly two-thirds of Americans do not have incapacity planning documents.  When the disabled person does not have the proper planning documents in place (at minimum, an advance medical directive and financial power of attorney), then their loved ones are unable to make the necessary medical and financial decisions on their behalf.  Often the next step for those clients is to file for guardianship of their loved one.

Many clients are often dismayed that guardianship is not a simple process.  A husband will often believe that they will naturally be appointed as guardianship for his disabled wife without much fuss, but the process may be much more complicated.  First, the court will appoint an attorney for the “alleged disabled person”.  That term of art is important because it underlines why the courts are very particular in how guardianships proceed.  It is up to the “Petitioner”, the one seeking guardianship, to prove that the alleged disabled person (“ADP”) lacks the capacity to make decisions for him or herself.  The court wants to make sure that the ADP indeed lacks the capacity prior to taking away that person’s rights.

The court appointed attorney will meet with her client and ask if they want to contest the guardianship.  The ADP’s answer is critical to how the case unfolds.  Sometimes this answer is driven by the ADP’s underlying medical condition and sometimes they refuse to believe that they cannot handle the decisions for themselves as they have always done.  If they want to contest the guardianship, then it will proceed like a normal civil case where both parties engage in discovery and the process culminates in a trial.  The ADP has a right to a trial by jury or can elect a bench trial (where the judge makes the final decision).

The process may become more complicated if someone else seeks to be appointed guardian as well.  This often arises where two siblings battle over who best would care for mom or dad when they are disabled.  It is possible for the litigation to be fought between three or more litigants with all sides fighting hard.

Having the right guardianship attorney on your side will help you navigate this complex area of law.  It can be maddening to have to fight so hard just to help your loved one, but it’s the unfortunate side of when the proper planning documents are not in place prior to the disabling event or disease.

David A. (Andy) Hall, Esq.
King|Hall LLC
410-696-2045
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
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Trying to Prevent Estate Litigation through In Terrorem Clauses is Often an Empty Gesture

Sometimes an estate planning client will anticipate that there will be a challenge to her estate after she dies –  and frankly if there is a house, then in this area its generally worth at least a couple hundred thousand dollars, thus, it’s worth fighting over.  Perhaps her children do not get along. Or there is a family business in which one relative has spent many years alongside to build and grow, and the client wishes to leave that relative a larger share of the business.  In an effort to prevent challenges to her will, a client may ask her estate planning attorney to utilize an in terrorem clause.  These can also be known as “no-contest” clauses.  An in terrorem clause essentially states that when someone objects or attacks the will (through the appropriate legal process), then the challenger will no longer receive a legacy or residual distribution that they otherwise would have received through the will.

Under Maryland law, an in terrorem clause in a will is void where there exists probable cause for instituting law suit.  Md. Code, Est. & Trusts Art. § 4-413.  Someone considering whether or not to challenge a will should consult with an experienced estates and trusts attorney to determine whether there exists probable cause to challenge a will.

An in terrorem clause is ineffective from preventing a challenge by someone who is disinherited as there is no stick (or carrot) to make the challenger think twice prior to challenging.  If they have nothing to lose, then there is nothing to prevent them from hiring an estate litigation attorney to challenge the will.

A no-contest or in terrorem clause may still be a good idea to include in your estate planning documents depending on your particular family dynamics.  While no clause can prevent all estate litigation, these clauses may be useful in preventing meritless litigation, i.e., a baseless challenge designed to extract a monetary settlement.  In addition, it may be a useful tool for your personal representative to use when negotiating a settlement with a will challenger as it can make estate litigation an all-or-nothing proposition.

No one wants to think about their family fighting over their estate.  Having a thorough and frank conversation with your estate planning attorney can help identify red flags and allow the planning attorney to attempt to draft around those challenges.  One such solution is appointing a third party as personal representative because the disinterested person can help prevent the estate administration from becoming a battle ground for long simmering family disputes.  Avoiding estate and trust litigation before it starts can save your family many tens of thousands of dollars in costs.

David A. (Andy) Hall, Esq.
King|Hall LLC
410-696-2045
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
This email address is being protected from spambots. You need JavaScript enabled to view it.

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