Tag Archives: disputes

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How to Avoid Disputes in a Conservatorship

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How to Avoid Disputes in a ConservatorshipWhen a loved one needs help managing finances or legal affairs, a conservatorship is often the best option. The conservator, usually a family member or trusted friend, has the authority to act in the interest of the protected person’s legal and financial affairs. As beneficial as this can be for the loved one, at times this transfer of power can lead to disputes over certain decisions and situations.

First of all, though, we should clarify what a conservatorship dispute is. For one thing, it differs from a guardianship dispute. A guardianship dispute concerns disagreements about who should be making decisions regarding where the incapacitated person lives and the healthcare he or she receives. A dispute about a conservatorship is a disagreement about who should be in control of money and assets.

Most disputes surrounding conservatorships, then, involve money matters. A conservator may even be abusing his or her authority. Examples could include stealing money or not acting in the best interest of the protected person. But far more common are the disputes arising out of mistakes – so it pays to be aware of some of the pitfalls.

There are three common mistakes people make in conservatorships:

Mistake 1: Failing to segregate conservatorship assets. All assets must be transferred from the incapacitated person’s name into conservatorship accounts.

Failing to separate the protected person’s cash and assets from the conservator’s personal cash and assets can have significant legal consequences. This is a very sensitive area: A conservator may unknowingly use funds from the conservatorship for his or her own use, or may even think it’s okay to use an incapacitated person’s funds for personal use. But the conservator must repay all funds to conservatorship accounts. In the State of Arizona, a conservator can also be fined an additional amount on top of the original sum taken. The conservator can also be disinherited from the protected person’s estate and be made liable for legal fees that have been incurred as a result of mismanaging funds.

Mistake 2: Failing to keep detailed records. The conservator must document and account for all transactions. Dealing in cash, withdrawing funds from an ATM, failing to keep receipts and not keeping track of time spent on the conservatorship are all accounting issues that can leave a conservator liable to accusations of mishandling the responsibilities of the position. If you don’t keep accurate records, you may be held personally liable for all money that isn’t accounted for.

Mistake 3: Failing to comply with court orders. As a conservator, you are responsible for filing an inventory, filing a credit report, submitting a budget and performing annual accountings of the estate. If you fail to comply with the court’s orders and the conservatorship statute, you as conservator may also risk being removed from your position.

The best way to avoid making these mistakes is to be aware beforehand of all the responsibilities and requirements of being a conservator. If you’re not good with recordkeeping and other detailed work, it may be best to defer the position to someone who’s better suited to such things. One option is to get a licensed fiduciary appointed.  A licensed fiduciary is a specially trained person who regularly serves as conservator and/or guardian in cases.

That said, remember that if you do accept the position of conservator, you don’t have to do it alone. Find an experienced probate attorney to help you understand the requirements of the position, and to comply with them.

If you have questions about how to resolve or prevent a dispute in a conservatorship, comment below or contact our office. We’d love to help.

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Resolving Disputes Involving Trusts

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Resolving Disputes Involving TrustsTrusts are legal arrangements in which someone holds property for the benefit of someone else.

Trusts can minimize estate taxes and prevent the need for probate. Trusts also offer greater precision in wealth management and distribution, and can protect your legacy.

But given the human element involved in estates and trusts, disputes can arise when a trust is being settled, even if you’ve given proper care to creating a trust.

Some common examples of trust disputes include:

1. A trustee stealing or misusing money or property in the trust.
2. Questions over whether an amendment to a trust is legitimate.
3. Uncertainty regarding the running of a business, should the trust own a business.

What is a trust dispute, then?

Simply put: If you’re a trustee and family members accuse you of mismanaging the trust, you are involved in a trust dispute.

Or, if someone else is the trustee and that person is mismanaging or stealing assets (or accused of doing so), then you are (or probably should be) involved in a trust dispute.

I have experience in trust disputes. In one particularly lengthy trust dispute case, I represented a professional licensed fiduciary who was the trustee of a trust.

Even before her death, the woman who created the trust was aware that her two adult children had been fighting with each other over how her trust would be settled.

After her death, the younger sibling accused the older one of stealing money from the trust.

The older sibling accused the younger of convincing their mother to amend the trust after she had become incapacitated.

Both accused the other of elder abuse and wanted the other to be disinherited. The case was in a standoff for months. It progressed very slowly through the court system.

This case shows the mistakes people make when resolving trust disputes. These
include:

1. Trying to settle disputes without the assistance of an experienced probate litigation attorney.
This area of law is very complicated and confusing – even to lawyers who do not work regularly in the area of probate disputes.
Statutes of limitations can be detrimental to resolving disputes if the disputes are not handled properly (and within the required time).

2. Not going to court when there is the possibility of a conflict of interest.
If you are both trustee and beneficiary, it can be tricky to avoid the appearance of acting in self-interest when dividing assets.
In such situations you should file a petition with the court asking for court guidance on how to distribute the assets and avoid conflict of interest.

The best way to avoid mistakes when navigating a trust dispute is to enlist the support of a skilled probate litigation attorney.

With the assistance of a qualified attorney, you may be able to settle an affair outside of court, saving you time and money.

Either way, an experienced attorney will help you prevent, negotiate, settle and litigate disputes to avoid costly losses.

If you have any questions about resolving trust disputes, I’d love to help. Give us a call.

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