Estate Settlement Issues:

Settling a decedent's estate involves a number of steps to ensure that the decedent's wishes are carried out and the title of property passes to the intended individuals. First, it is important to determine if probate is required. A probate estate occurs when the decedent owns individually-held property without a beneficiary designation that exceeds a certain dollar amount. (For estates below that amount without real property, a simplified estate administration process can be completed). If the decedent's assets are all non-probate meaning that he or she has a fully-funded revocable trust (commonly referred to as a "living trust") or assets that are held in survivorship or have a beneficiary designated, no probate administration is required.

If probate administration is required, it can occur with a Will or without a Will. If the decedent died testate (meaning he or she signed a valid Will), the executor designated in the Will must request that the Will be admitted for probate and that he or she be appointed as Executor. The court must issue an order for the probate process to commence. If the decedent died intestate (meaning he or she died without a valid Will), the process is not remarkably different, a family member or other interested party will petition the court to be appointed as Administrator of the decedent's estate and the estate will pass in accordance with what Connecticut law provides (the laws of intestacy) instead of in accordance with the decedent's wishes.

Once the executor or administrator is appointed by the Court, the estate administration process begins. There are a number of steps required of the Executor. The first step is to marshal the assets to ensure that all assets have been accounted for and have been sufficiently safeguarded. The next step is to inventory the assets for the court. The Executor must then make decisions regarding liquidating or selling assets and determine the appropriate course of action. The Executor's primary role is to protect and conserve the assets for the beneficiaries of the estate. Creditor claims must also be ascertained and disposed of before beneficiaries receive any payments; otherwise the Executor may be personally liable to the extent such payments are made. Tax filings must also be made on a timely basis. This includes not only the decedent's final income tax returns but also income and death tax returns for the estate. Finally, the Executor is responsible for filing an accounting with the Court showing all of the activity for the estate including income, proceeds from the sale of assets, payments for debts and expenses, and finally distributions to beneficiaries. Such an accounting is subject to Court approval. For the most part, the probate process can take up to a year for a simple and modest estate and can take more than a year for a more complex and substantial estate. Of course, family and beneficiary issues can impact the time necessary to settle a probate estate. As always, it is prudent to obtain competent legal counsel even for a more modest estate.

The probate process is a public proceeding meaning both the contents of the estate plan and the assets are a matter of public record. It can be more costly and time-consuming than other methods of settlement. In the case of a fully-funded revocable trust (commonly known as a living trust), the probate process is avoided. A revocable living trust is known as a Will substitute meaning that like a Will, it provides for the disposition of the client's property upon death. However, instead of the Trustee being subject to probate court supervision such as is the case with an Executor of an estate; the Trustee is able to complete the administration process in an expedited matter. This does not mean that the Trustee can immediately distribute assets to the trust beneficiaries, but the living trust does offer certain advantages over a probate estate settlement. The administration of a living trust after the decedent's death first results in lesser costs associated with estate settlement; second, it provides immediate access to the decedent's assets upon death unlike a probate which could take weeks to gain access; third, it is a private document meaning that is not filed in the court or anywhere else, thus both the estate plan as well as the nature and amount of the decedent's assets are private. Even in the case of a fully-funded living trust and no probate estate, it is prudent to obtain competent legal counsel to both expedite the process and protect the Trustee who is responsible for completing the trust administration and distributing assets to the beneficiaries of the trust.

Many times clients are inclined to achieve probate avoidance not by establishing a living trust, but by establishing joint bank accounts, payable on death bank accounts, or transfer on death brokerage accounts. While all of these effectively avoid probate, they do not adequately protect the client as a living trust does. There is a greater risk with these other forms of ownership of assets passing in a manner that is not entirely consistent with the client's wishes than with a living trust. Such forms of ownership are not recommended merely for estate planning purposes.

Thus, the settlement of a probate estate or the administration of a living trust after the creator's death both require special care. Competent legal counsel is the best way to protect the person who is appointed to handle such administration and to carry out the decedent's wishes.

Conservatorship Issues:

A conservatorship is a legal proceeding wherein a petition is filed (most frequently by a family member) in court to request that a conservator be appointed for an individual. A conservator is like a guardian wherein he or she is responsible for the individual's personal affairs, hence called a conservator of the person and is responsible for the individuals' financial affairs, hence called a conservator of the property. One or both can be appointed by the court. A conservator of the person is appointed if the individual's decision-making ability is diminished to the extent that he or she is at risk of endangering his or her personal health, safety or welfare or that of others. A conservator of the property is appointed if the individual's decision-making ability is diminished to the extent that his or her financial assets are at risk of being dissipated or improperly managed.

In planning for clients, one of the objectives is to have the tools in place to avoid conservatorship. No one chooses to have court supervision over his or her affairs (except in the case of a voluntary conservatorship). A conservatorship proceeding is a court proceeding which is costly and cumbersome and limits flexible decision-making. The tools necessary to avoid conservatorship include a durable power of attorney wherein the client appoints an agent to step in his or her shoes for financial decision-making and an appointment of health care representative wherein the client selects a representative to communicate medical decisions for him or her in the event the client lacks decision-making capacity for medical decisions. With these advance planning tools, it is likely that a conservatorship will be avoided in the event the client's decision-making capacity is diminished to the extent otherwise required for such proceeding.

Even with the advance planning tools in place, a conservatorship proceeding is sometimes commenced in court by the client's family members. While the power of attorney is the key tool, it does not remove the client's decision making capacity. Thus, an agent under power of attorney may be managing finances or otherwise acting in the client's best interests while the client is acting contrary or in opposition to the agent's actions. Thus, a conservatorship may be necessary under such limited circumstances. Another case where a conservatorship proceeding may be commenced even with a durable power of attorney and document appointing a healthcare representative is when family members differ in how the client's financial assets should be managed or differ on issues pertaining to personal or medical decision-making. Such disputes if not able to be mediated frequently result in a conservatorship proceeding before the court.

Major revisions to the conservatorship laws were enacted in 2007. Such revisions were designed to protect the liberty interests of the ward. The major changes include: requiring all conservatorship proceedings to be on the record in the probate court; formal rules of evidence now apply to conservatorships; attorneys appointed for conserved persons are no longer permitted to submit written reports the court on behalf of their clients; the requirements for the imposition of a conservatorship have been heightened; a showing must be made to the court that least restrictive methods have been considered; court approval is now required to move the conserved person's residence and to sell the conserved person's personal belongings; limited instead of plenary conservatorships should be considered the norm instead of the exception thereto; nursing home placement of the conserved person is now within the purview of review by the probate court; and health care decisions are no longer automatically those of the conservator in the case of a health care representative. These are just some of the highlights of this substantially revamped statute.

As you can see, the new conservatorship statute is extremely complex and thus, the need for advance planning and obtaining competent legal advice cannot be over-emphasized.