Guardianship Bills Seek to Prevent "Grannysnatching"

By:  Timothy P. Flynn

An adult guardianship is a probate court proceeding that protects an individual that cannot take care of his own affairs by appointing a fiduciary -a guardian or conservator- to care for the incapacitated individual.  In our free-society founded on individual liberties, guardianships although disfavored as a legal status, are sometimes necessary to protect individuals made vulnerable through age or mental illness.

As a Public Administrator, I have served the Oakland County Probate Court by accepting appointments as the guardian and conservator for individuals deemed by a judge to be incapacitated, but who do not have suitable family members to serve as their fiduciary.  Currently serving as guardian for just over 75 protected individuals, and for hundreds over the past decade, I have acquired vast experience in dealing with all aspects of adult guardianships and conservatorships.

Two weeks ago, companion bills were introduced in the Michigan Senate to amend the guardianship provisions of the Estates and Protected Individuals Code -Michigan's probate code- to adopt the Uniform Guardianship Jurisdiction Act.  The companion bills seek to restrict the subject matter jurisdiction of the county probate courts by adopting a complicated three-tier test to ascertain the allegedly incapacitated individual's contacts with the forum state prior to granting a guardianship.

Under the present probate code, a guardianship can be granted for any incapacitated individual physically present in Michigan.   One benefit touted by supporters of the Senate bills is prevention of conduct known as "grannysnatching" whereby a person takes a vulnerable individual into Michigan from another state and immediately files for guardianship in order to control the person's income and assets, and to prevent contact by other family members.

If adopted, the Senate bills would revise our guardianship act, making the initial establishment of a guardianship much more difficult, and complicated.  Under the present guardianship procedures there are effective safeguards already in place.  For example, prior to the establishment of a guardianship, a Guardian Ad Litem is appointed by the probate court to function as the "eyes and ears" of the court; to investigate the guardianship petition and make a recommendation to the judge.

Also, under the present law, all "interested persons" -other family members- must be served with a copy of the petition and can appear at the hearing on the petition and object to the guardianship or to the appointment of the nominated individual.  Such notice provisions, along with the GAL's report to the probate judge, operate as an effective set of safeguards against cases of reprehensible "grannysnatching".

We here at the Law Blogger see these companion bills, SB 465 and SB 466, as more trouble than they are worth.  If adopted, probate court staffs across the state will need to absorb and digest the complex provisions of the Uniform Guardianship Jurisdiction Act and the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act; this will require staff training and increase the administrative costs associated with the delivery of these public services.

Such cost and complication will come just as the Oakland County Probate Court has managed to trim staff and control expenses to stay on-track with Oakland County's perennially-balanced budget; a rarity in this day and age, especially considering that the services provided by the probate administrative staff have remained first-rate.

For these reasons, we say "no" to the companion bills and urge the Michigan Senate to leave well enough alone.  The present guardianship system in Michigan is not broken thus, it does not need to be "fixed" by a uniform act.

Related Note:  A documentary on elder abuse titled, Last Will and Embezzlement, was profiled in today's Freep.  The film, which takes a look at the ways criminals take advantage of the elderly, is playing in Clinton Township and West Bloomfield.

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Posted in: conservatorship,Guardian Ad Litem,guardianship,Oakland County Probate Court

Valid Prenuptial Agreements Require Full Asset Disclosures

Prenuptial agreements, contracts executed in the anticipation of a marriage, have long been validated in Michigan courts.  Generally, there are two contingencies covered in a typical prenuptial agreement: a) the divorce of the contracting parties; and b) the death of one of the parties.

A primary requirement to enforcing a prenuptial agreement is the "special duty" of full disclosure of all assets by both contracting parties.  This requirement was recently examined in a key (but unpublished) decision of the Michigan Court of Appeals.
The case, In the Matter of Kenneth Waller, originated right here in the Oakland County Probate Court.  The case illustrates the risk of executing a "do-it-yourself" prenuptial agreement.

The contract at issue in the Waller case waived the Wife's interest in a statutory share of her husband's estate in favor of the Husband's adult children.  The Wife challenged her Husband's estate at his death, despite her execution of the antenuptial agreement.

The contract was upheld by the probate court judge.  In reversing the probate court, the Court of Appeals focused on the asset disclosure and lack of evidence that any proper disclosure had been made by either party:

Accordingly, fair disclosure is required  under statute and caselaw in the context of
determining whether a prenuptial agreement can be deemed valid and enforceable.  The record indicates that there was no formal disclosure of assets by either decedent or Waller at the time of or before the execution of the  prenuptial agreement, such as through the presentation or exchange of written asset lists or through a verbal communication or declaration electronically recorded so as to preserve proof of disclosure.  The prenuptial agreement itself did not contain an itemization of assets and values,  nor did it indicate that disclosure of assets had taken place.  

Indeed, there is no evidence of even an informal, off-the-cuff discussion between Waller and decedent regarding the nature, extent, and value of each other’s assets prior to the execution of the agreement.  The probate court essentially found that Waller was sufficiently familiar with the assets held by decedent, making it unnecessary for decedent to redundantly disclose his assets to Waller before the agreement was signed, where  the assets had already been effectively “disclosed” to her simply through the evolution of their relationship in which familiarity with each other’s property naturally occurred.  We agree with the principle that if a party challenging a prenuptial agreement was fully aware of the other party’s assets and their value at the time of execution, an argument that there was a failure to fairly and formally disclose assets should fail; the purpose of a disclosure is to make a party  aware of what he or she may be giving up in signing a prenuptial agreement.

The Court of Appeals held that under such a record, the (rebuttable) presumption of non-disclosure should have been applied to invalidate the prenuptial agreement in that case.

Also, the Court of Appeals placed significance on the lack of a financial statement or schedule of assets.  These are typically attached to the antenuptial agreement.  This way, there can be no claim, as in the Waller case, of a failure to disclose, or a triggering of the presumption of nondisclosure.

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Posted in: antenuptial agreement,divorce,divorce lawyer,Michigan Court of Appeals,Oakland County Family Court,Oakland County Probate Court,prenuptial agreement

Underfunded Courts Will Erode Justice

This granite courthouse in the Bronx took a decade to
build (1905-1915) and has been abandoned since 1978.

Achieving justice in the United States is never a given.  There are many factors that affect an outcome in the courthouse: the relative skills of the attorneys; the time a matter takes to get to trial; the personality of the judge; the backlog of the judge's docket.

One factor becoming increasingly important in the determination of justice is the funding [or lack thereof] for the judiciary.

Here in Michigan, there are budget-conscious proposals to eliminate trial judges, court of appeals judges, and to shrink the Michigan Supreme Court from 7 to 5 justices.

Referred to as the weakest branch of government in the Federalist Papers due to its inability to control either sword or purse, the judiciary must now fight for its fiscal life here in America, both at the federal level, and on a state-by-state basis, as legislatures scramble to shrink all government budgets.

Here in Oakland County, the county executive, Brooks Patterson, runs a very tight fiscal ship.  He has demanded that the courthouse balance its budget; in turn, they have accounted for nearly every penny spent in the courthouse, saving wherever possible.

Patterson's plan has meant a slow attrition among the corps of judicial clerks and other court staff.  At the Oakland County Probate Court, this has translated to juggled counter hours and longer lines.  Overall, however, the Oakland County Circuit Court's service to the public has not suffered.  How long, we wonder, can this continue?

If you have not been to the Macomb County Circuit Court in a while, don't plan your business for the afternoon if it's a Tuesday or Thursday; the clerk's office will be closed.

Elsewhere, courts have not fared nearly so well.  In California, for example, $350 million has been cut from the county trial courts since 2009, with even more cuts due by the end of the year.  The Economist reported last week that up to 48% of California's county trial courts could be rendered insolvent by the state's budget crisis.

One result of the cuts to courts in California is lengthening the time an uncontested divorce takes to process through the court system; from 6 to 18 months.  Trained court staff is needed to process such cases without delay.

In New York, the judges, not having seen a legislated pay raise since the turn of the century, have sued the political branches of their state government.  In Ohio, the Morrow County Municipal Court went to a 4-day work week in 2009 and stopped taking new cases for filing because the county failed to requisition sufficient paper.

Some quick stats compiled by the American Bar Association regarding the state of the state judiciaries:

• 26 states have stopped filling judicial vacancies; 
• 34 states have stopped filling judicial clerkships; 
• 31 states have frozen judges' or clerks' salaries; 
• 14 states have closed courts during weekdays; and 
• 3200 courthouses have been characterized as "physically eroded" or "functionally deficient".

According to ABA, "the underfunding of the judicial system threatens the fundamental nature of our tripartite system of government."  To borrow a cliche that also captures the spirit of this problem: "justice delayed is justice denied."

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Posted in: American Bar Association,Federalist Papers,Macomb County Circuit Court,Michigan Court of Appeals,Michigan Supreme Court,Oakland County Circuit Court,Oakland County Probate Court,uncontested divorce

Huge Claims Resolved in Davidson Estate

When you die a billionaire, your estate is often going to be heavily litigated before a certificate of completion is filed with the probate court.  Particularly when your widow (and business partner) is not the mother of your children.

Another ingredient for guaranteed protracted probate litigation: last minute changes to your will.

Local billionaire Bill Davidson's estate had all of these characteristics.  After his death in March 2009, Davidson's estate was estimated at well-over a billion dollars.

Davidson parlayed his fortune from Guardian Industries, a glass company, into a sports empire that once included world-champions Detroit Pistons and Detroit Shock, as well as the Tampa Bay Lightning hockey team, and the Detroit Fury arena football team.

The estate and the $20 million claims filed against it, first denied but then eventually settled, are all on file with the Oakland County Probate Court.  The terms of the settlement, however, are not.

Apparently, the problem arose when Davidson made changes to his 19-page will during the last week of his life.  Those testamentary amendments broke-up Davidson's estate into three separate trusts and named his wife, a son and a daughter, all Bloomfield Hills residents, as the sole beneficiaries.

The probate litigants pitted Davidson's spouse and owner of the Detroit Pistons, Karen Davidson, against his son and daughter.   The dispute involved claims against the estate filed by Milestones Upgrading & Industries Co., an Israeli company, and Big Ben Investments; companies with which Mr. Davidson had a long business-relationship.

The claims filed by Milestones and Big Ben alleged that Mr. Davidson made up to $20 million in investment pledges to the companies.  Karen Davidson, listed as a manager for Big Ben, wanted her husband's estate to honor the pledges, saying they were consistent with Mr. Davidson's testamentary wishes.

In collateral "breach of contract" litigation assigned to Oakland Circuit Judge Nanci Grant, the corporate plaintiffs also privately settled the circuit court disputes via stipulated orders of dismissal in July.

While these large probate and circuit court disputes were being negotiated and resolved, you may recall rumors that Karen Davidson was shopping the Detroit Pistons for an interested purchaser.  Fortunately, the Davidson Estate has enough money to resolve the expensive claims made against it and to apparently keep the Pistons right where they are; in the suburbs of the "D".

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Posted in: Bill Davidson,Detroit Pistons,estate planning,Karen Davidson,Oakland County Circuit Court Judge Nanci Grant,Oakland County Probate Court,probate court litigation