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Legal News: Guidelines for Preparing a Conservator's Financial Plan

Background Information: The following information is provided to assist you in preparing a Conservator's Financial Plan when you are ordered by the court to do so.

The court may at the time of your appointment or (at any other time) order you to prepare and file a Financial Plan. The Plan is necessary to protect and manage the income and assets of the protected person and must be filed with the Court wihtin 90 days of the order.

The plan must be based on the actual needs of the protected person and take into consideration his or her best interests. It must include steps to develop or restore the person's ability to manage his or her property, an estimate of the duration of the conservatorship, and projections for expenses and resources.

The purpose of the Plan is to present a budget for the upcoming year in a format which is meaningful to the interested parties. The Plan should be understood by persons who are not accountants or lawyers. The information should be presented in a simple but complete format to help everyone understand the planned administration of the conservatorship.

First, gather all of the protected person's financial information, then complete the form provided by the court for this purpose. Wherever space is insufficient, you may attach atdditional schedules.

You must provide copies of this Financial Plan to the protected person and any others as identified in the order appointing the conservator, within 10 days of filing with the court and indicate having done so by completing the Certificate of Service at the end of the form.

You are required to maintain supporting documentation for all receipts and disbursements including detailed billing statements from any professional. The court of any interested persons as identified in the order appointing the conservator may request copies at any time.

Interested persons have the right to review and respond to information contained in the Financial Plan within 30 days of the date of service or by the date of any hearing, whichever occurs first.

First, provide all the requested identifying information for the case, the protected person and the conservator.

Part I

First complete Schedules A through C of Part III. Then, write the final amounts from each Schedule in the Summary of Financial Plan. Calculate and insert the Net Income by subtracting the Disbursements from the Receipts.

This will help to show if the person's income is enough to support his or her expenses, or whether steps must be taken to apply for public benefits or sell assets.

Provide a short narrative of the steps you will take to help the protected person to learn to or regain the ability to manage his or her own property or finances. This may include moving accounts to accessible financial institutions, arranging for direct deposit of pension income, providing checks designed for the visually impaired, providing a small account for spending money, arranging for periodic occupational therapeutic activities. Attach additional schedules if the space provided is inadequate.

Estimate the likely duration of the conservatorship, keeping in mind the steps to be taken to restore the protected person's ability to manage his or her own affairs.

Are the assets in the estate sufficient to provide for the present and future care of the protected person? If not, describe why and what steps should be taken. Attach additional schedules if the space provided is inadequate.

Part II

A. Resources/Receipts/Income

List in detail each expected regular source of receipt or income. Include the payer, description by type of receipt (interest income, dividends, social security, and so forth), and other details to identify the income source (such as account numbers).

Insert the expected monthy amount and yearly amounts. If the amount is to be received monthly, indicate so and multipy by 12 for the yearly amount. If the amount is to be received yearly, indicate so and divide by 12 for the montly amount.

Enter the total in Part I. If the space provided in the form is insufficient, attach an additional schedule.

B. Expenses/Disbursements

List in detail all the money you expect to spend on behalf of the protected person during the next year. List the person or company to be paid and the purpose or reason for the expense.

Insert the expected montly amount and yearly amounts. If the amount is to be paid monthly, indicate so and multiply by 12 for the yearly amount. If the amount is to be paid yearly, indicate so and divide by 12 for the montly amount.

Enter the total in Part I. If the space provided in the form is insufficient, attach an additional schedule.

C. Projected Payments to Professionals

List in detail all the money you expect to pay for professional fees to attorneys, doctors, accountants or others. Include any amount you expect to receive or fee for acting as conservator and to anyone, including yourself acting as guardian for the protected person. Also, enter this total as the first item in Part II.B.

 

Legal News: Wills and Trusts (Premarital Agreement)

(Lawyers Weekly - This Week's Decisions, 11/18/19)

Where the widow of a decedent has challenged rulings by a Probate & Family Court judge, the judgment should be vacated to the extent that it declares a premarital agreement null and void.

"At the heart of these cases is the proper distribution of the assets of the decedent, David Stacy, in light of a premarital agreement executed by him and his wife, Iana Stacy (Iana or wife), and the fact that his will did not provide for his wife and expressly excluded his son from a prior marriage. These issues have arisen in the context of two separate cases: (1) a petition brought by the wife against the personal representative of the estate to render an inventory and account and (2) an equity action commenced by the personal representative to recover items belonging to the estate that are in the wife's possession. Because our de novo review of the premarital agreement differs from that of the Probate and Family Court judge, which in turn impacts the outcome of the decedent's estate plan, we vacate and modify portions of the judgment and decree and remand for futher proceedings as necessary.

"If a decedent and the wife entered into a premarital agreement on July 18, 2008. "The parties dispute the interpretation of this agreement. However, it is undisputed that the premarital agreement enumeratedthe parties' separate property owned by each of them at the time of the marriage. The decedent included in his list of assets something called 'Pigeon Trust'...

"Based on the plain language of the premarital agreement, we hold that the wife waived any right to the Pigeon Trust and all of the other property identified in the premarital agreement as the decedent's separate property. In other words, the decedent's interest in the Pigeon Trust is treated upon the occasion of his death as though the parties were never married, to the effect that the wife can claim no entitlement to a share of that property from his estate through intestacy by virtue of her status as spouse. While this separate property is part of the decedent's estate, it cannot be used for purposes of calculating or receiving the wife's intestate share of the decedent's estate...

"Accordingly, we conclude that there were sufficient indicia of the donor's intent to determine that the decedent's estate was the intended contingent beneficiary of the Pigeon Trust should the decedent predecease  Joan Bentinck-Smith. Therefore, the Pigeon Trust settlement agreement proceeds should be distribted to Deborah, as the estate's personal representative...

"As a result of the adoption of the code, a will executed prior to marriage is no longer void in this Commonwealth. Because the wife is not a beneficiary of the will, the next question is the size of the wife's intestate share. Here, where the decedent was survived by his wife, his son (who is not a descendant of the surviving spouse), and his adoptive mother, we agree with the judge that the wife's intestate share is 'the first $100,000 plus 1/2 of any balance of the intestate estate'...

 

Office News: Using Social Media Wisely

Today so many people use social media to communicate with eachother. I know I use Facebook to catch up on family photos from my siblings who are scattered throughout the country. It's free and I don't have to worry about when to call (especially if they live in Alaska!)

Here are some bits of information with helpful hints to get you to understand more about social media and ways to protect yourself.

Social media
Sites such as Facebook and Twitter may seem more geared for the younger crowd, but these sites also offer some entertainment for seniors. These sites allow you to share photos, news updates, and interact with your friends and family any time.

You can also connect with certain brands, politicians, and celebrities. If you do join one of these sites, be sure you read up on the rules of etiquette that you will want to follow.

Protecting yourself from the dark side of the internet
While there are a lot of good things to be offered on the internet, there are a lot of things that you should be aware of too.

Whether it is saving your passwords or downloading software, you need to be sure that your information is secure. Make sure you have antivirus software installed that will keep your personal information from being compromised. 

Always use unique passwords that involve both lower case and capital letters, numbers, and special characters. Use different passwords for different sites, and if need be, store them with a password manager so they are easy to recall. 

Understand what phishing is and how you can avoid it. Phishing is when an email is sent to a person trying to gather sensitive information such as social security numbers, passwords, credit card information, and more. These emails appear to come from a reputable source. Before complying with the request, call the organization for verification. 

The internet is all about closing the distance gap between people and helping us communicate better.

Whether you are connecting with others, exploring your interests, or using the internet for entertainment, technology can be an amazing thing with the right precautions. So, get out there and enjoy it!

Office News: Questionnaire posed to Alex from Lawyer.com

Alex had recently become a member of Lawyer.com and was asked to complete the following 10 questions:

  1. Please describe a case in the last year or two where you made a big difference.  A call came from Denver, Colorado. To this day, she can't accurately say how she got my number. Her father had died in Pittsfield, MA with a will omitting her, his only heir. She had messed up in filing an objection and was without hope. The office was able to open a door, get deceased's conservator to make arrangement with the woman's aunt. The will was waived an she received over $70,000.
  2. How did you build a successful practice? By asking for help from lawyer.com, getting positive reviews, and being willing to put on seminars at various places.
  3. What should clients look for in a lawyer? Someone very rare. Someone who has Esquire after his name, who is honest, genuine, sincere and real (and has been on the other side of the desk himself).
  4. How important is local knowledge to the success of your cases? It is vital to know and have relationships with the clerk's office personnel of the various counties. We file away their direct phone numbers.
  5. What information can you provide in a free phone consultation? Only a basic answer. The more intricate, the more time and face-to-face follow-up is essential. The Lawyer's answer is "It depends."
  6. What information do you need in a free phone consultation? Can you come in? Do we need a house call? Does this look at face value as something we can help you with?
  7. What differentiates you from other lawyers in your community? I don't charge for phone calls and email exchanges. I will do a lot of tasks on a flat fee. I'm looking to get your positive review, not your money. Provide excellent service and the funds take care of themselves.
  8. What is the most rewarding aspect of your job? The fact that you've brought relief, understanding and support to someone going through a bad time, facing the reality of a will, a death.
  9. What are your other interests in addition to law? New England Patriots football, spiritual subjects, golf on tv and getting extra sleep.
  10. Are you involved in your community? Yes, I am very involved in giving free seminars on everything probate at various senior centers, libraries, adult communities and churches. I feel it is important to educate people and get them prepared.

Office News: Be Prepared and Get Organized...

The Office of Alexander F.X. Matulewicz, Esq. is ready to help you with all your probate issues.

We find it helpful to advertise by word of mouth to our co-workers, friends and relatives how important it is to be prepared when the day comes and one of ours has passed away.

The real question becomes, will you be ready with all the information necessary to answer who gets what, do you want a funeral, casket, burial plot, or prefer cremation? Do you know where all the important information is being kept?

Is there a will, trust, power-of-attoney, healthcare proxy, bank account and insurance info? There are so many questions, but if you aren't prepared, who gets what, when, how - I'd want my closest family and friends to benefit from what I leave behind. You can't take it with you! And you don't want the state to get it.

The Office realizes people are hesitant to come forward, admit they need to do this now, before it's too late. My own father used to be afraid that if he wrote a will, he'd die. He also thought if he retired, he'd die. All crazy ideas and superstitions. When he did retire after 45 years, he did a part time job where he could still participate in working everyday. It was my mother who talked him into doing a will and getting things "prepared". As an RN she saw too many people die without a will and all the complications that come with it.

The Office even goes one step further to help you. Alex and his paralegal, Amy can come to your house and set up a free consultation - where you are most comfortable in your own surroundings. For example, I'm thinking, my sister (and her family) can host a meeting and invite her elder inlaws, who are in failing health, to see the benefits of getting prepared. They can ask all the questions and explain their reservations about their reluctance. It's a free consultation. You can learn so much. What do you have to lose?

Call the office today and check it out. 508-660-0331. You will be glad you did!

 

Legal News: Nobody Wants to be Sued (Continued from previous blog)

The previous blog spoke about the 5 requirements common to all 19 DAPT (domestic asset protection trust) states that the DAPT must follows:

Those were the basics. From here there are a few additional provisions that vary from state to state and that are seen as important by "experts" in assessing the desirability of one state's DAPT over another. They include:

  • The period (statute) of limitations within which an action must be brought to challenge a transfer to the trust;
  • "Exception creditors" (such as ex-spouses collecting alimony, child support obligations, and tort creditors), if any, whose claims override the protection of the DAPT):;
  • The level of the creditor's burden of proof in challenging a transfer to the DAPT as "fraudulent," meaning prejudicial to the creditor.

One of the most significant considerations is the statute of limitations, which runs from 18 months in Ohio (currently the shortest) to five years in Virginia (the longest). Almost half of the rest is four years, including Connecticut; and the other half, now joined by Indiana, is two years.

In virtually all the statutes the burden of proof to establish a fraudulent transfer if by "clear and convincing evidence," while Connecticut cut that liberal standard down a bit by requiring proof only by a "preponderance of the evidence" if the transferor is also a beneficiary of the DAPT, which would in fact typically be the case with a self-settled DAPT.

The idea of a period of limitations makes sense in some respects, as it would lead to chaos and widespread uncertainty in commerce and property ownership if creditors could surface and make a claim 10 or 20 years after the claim arose.

Exception creditors are the next important consideration. They are creditors whose claims take priority over the protection offered by the statute. Typically, these are claims existing at the time the DAPT was created, for child support, alimony or marital settlements, which is the law in a majority of the DAPT states.

As more states adopt DAPT statutes and more DAPTs are established, more laws will no doubt develop, but at the moment there are relatively very few reported cases across the country.

Furthermore, there are discussions among legal organizations of establishing a uniform asset protection trust law, which could help unify the laws across the country. But whether or not that occurs, we can unequivocally say that times and concepts have changed, and estate planners need to be mindful of that.

Given the growing trends of the states to adop DAPT laws, when we get to the "full monty" where all 50 states have DAPT laws, it may become borderline negligent for estate planners not to consider a DAPT in every estate plan.

When that happens, if people could really rollover in their graves, Queen Elizabeth would be in the likes of a spin class.

Legal News: Nobody Wants to be Sued

(News Briefs, Lawyer Weekly, 11/25/19)

No one wants to be sued, and everyone would feel better if they knew their assets would be protected if they were sued. It is commonknowledge that we live in the most litigious country in the world. There are more lawyers in southern California than in the entire country of Japan.

A lawsuit is initiated every 15 seconds in the US. Such an atmosphere has motivated a considerable segment of the public to go to some lengths to protect their "nest egg," even to the point of moving it out of the country. Is that necessary? Isn't it possible to protect it while it's here?

In 1977, Alaska, followed quickly by Delaware, became the first states formally to adopt laws that would allow a person to establish a trust for her own benefit, the assets of which could not be reached by creditors. It is referred to as a self-settled domestic asset protection trust, or DAPT.

Of course, the various state DAPT statutes differ somewhat, but following is a brief description of the basics and some of the distinctions among the states' laws, as well as an overview of the laws of the most recent additions.

For openers, there are five requirements common to all 19 DAPT states that the DAPT must follow:

1) The trust must be irrevocable - irrevocable by the settlor, that is. The power to revoke can be given to other parties, such as the trust protector;

2) The trust must have a local trustee (but it could also have a co-trustee elsewhere, such as in the settlor's domiciliary state - generally a bad idea);

3) Some ot the trust assets must be located and administered in the DAPT state;

4) The trust must provide that its governing law is that of the DAPT state;

5) The trust must contain a spendthrift provision (prohibiting attachment or reach by creditors or assignment by the beneficiaries).

 

Legal News: Wills and Trusts (Irrevocable Spendthrift Trust- Judgment Creditor)

(Lawyers Weekly dated 11/25/19)

Where a plaintiff brought a reach and apply action against a Massachusetts spendthrift trust created by his parents' murderer to enfore an Arizona wrongful death judgement against the murderer's estate, a question should be certified to the Massachusetts Supreme Judicial Court concerning whether a judgment creditor of the settlor's estate may reach and apply assets i an irrevocable spendthrift trust after the death of the self-settlor of the trust.

"Harry De Prins brought this reach and apply action against a Massachusetts spendthrift trust created by his parents' murderer, Donald Belanger, to enforce an Arizona wrongful death judgment against Belanger's estate...

"The crux of (defendant Michael J.) Michaele's argument on appeal is that the district court erred in its core legal holding that De Prins is entitled under Massachusetts law to reach and apply the irrevocable trust assets to satisfy the wrongful death judgment. This argument turns on whether in these circumstances, under state common law and state statutes, a self-settled spendthrft irrevocable trust which provided for unlimited distributions to the settlor during his lifetime (and to no one else) protects assets in the trust form a reach and apply action by the settlor's creditors after the settlor's death. Massachusetts law has not resolved this question...

"We thus certify the following questions to the Massachusetts SJC: 'On the undisputed facts of this record, does a self-settled spendthrift irrevocable trust that is governed by Massachusetts law and allowed unlimited distributions to the settlor during his lifetime protect assets in the irrevocable trust from a reach and apply action by the settlor's creditors after the settlor's death?"

 

Legal News:Trust Beneficiaries Sue (Breach of Fiduciary Duty)

In the Lawyers Weekly (11/25/19) under Verdicts & Settlements:

Mimi Greenberg died in 1974 and was survived by her spouse, defendant Nathan Greenberg and their two adult children, plaintiffs Ruthanne Miller and Henry Greenberg.

Mimi had executed a trust agreement with defendant Nathan as one of three initial co-trustees. Years later, following the death of one of the initial trustees, defendant Agnes Kull was appointed as a co-trustee.

The trust provided that there would always be three trustees in office and that, in the event a co-trustee was unable, unwilling or ceased to serve in that capacity, the remaining co-trustees would appoint a replacement.

In addition to being appointed an initial trustee, Nathan was named beneficiary of the trust, as were plaintiffs Ruthanne and Henry. Nathan, as a beneficiary, was entitled to distributions only as the other trustees deemed necessary or advisable for health, comfort, support and reasonable enjoyment in life, taking into consideration any other income or assets available to him, to live in the same manner and enjoy the same comforts to which he was accustomed during Mimi's lifetime. Further, Nathan was prohibited from participating as a trustee in any decision to make such a distribution to himself.

The beneficiaries' claims against Nathan and Agnes principally arose out of:

(1) the distribution of trust assets to Nathan as beneficiary of the trust in violation of the terms of the trust. Specifically, the judge ruled that Nathan enjoyed a much more affluent lifestyle following Mimi's death and therefore, did not require the distributions to maintain the lifestyle to which he had become previously accustomed. Further, the distributions were made in violation of language in the trust instrument forbidding Nathan from making any decisions as trustee concerning distributions to himself as a beneficiary;

(2) the investment of trust assets in different Ponzi schemes. The judge ruled that the trustees' investments were made negligently and in breach of the trustees' fiduciary duties and the Massachusetts Prudent Investor Act. Specifically, the court found that Nathan breached his fiduciary duty to the trust when he failed to investigate adequately the investment strategies and allowed his decision to participate in the risky investments to be motivated by greed. Agnes violated her fiduciary duties by disregarding her obligations to exercise reasonable care, skill and caution to preserve the asets of the trust in that her passive disregard of the risks that Nathan's actions posed to the assets of the trust jeopardized the trusts' interest and led to losses;

(3) the failure of both Nathan and Agnes to consult with the third co-trustee as to the administration of the trust and, when that trustee resigned, to appoint a successor trustee; and

(4) the trustees' failure and refusal to account to the beneficiaries.

The action was originally brought by Nathan and Agnes seeking a declaration that their actions had been in compliance with the terms of the trust, which was ultimately dismissed. The plaintiffs asserted counterclaims, which formed the basis of the judgment. Further, since the commencement of the action, both Nathan and Agnes died and the representatives of their respective estates have been substituted as parties.

Legal News: 8 Life Events that require a change in your estate plans

Estate plans need to be updated periodically, especially by older adults. Frequently revising your estate plans is important as you age because your circumstances change ore frequently than at previous points in your life.

While you and your estate planner should review your estate plan every 2 years once you are over the age of 55, there are several other life events that should also trigger a review.

1. A new addition to the family.

Your golden years may be full of new additions to the family, whether your children get married or have children of their own. Estate changes may not be necessary after a new addition, but you may want to make them to pass down something to your new grandchildren or to a favority daughter or son-in-law.

2. A new diagnosis.

If you have been given a new diagnosis, you'll likely spend some time reviewing what can happen as the illness progresses. A new illness may require you to give new health care instructions to your executor. For example, there may be some treatments you do not wish to receive and some you do. Your loved ones need to know this should you become unable to make your own health care decisions. Communicate your wishes in writing to your power of attorney as soon as you're sure of them.

3. A serious falling out.

Over time, your opinion about the people in your life may change. Or, you may feel the same about them, but their circumstances may make them a poor choice as a power of attorney or trustee. Say you discover you and your daughter feel very differently about palliative care. Or, you find an old friend, whom you're named as trustree, has developed a gambling addiction. When their circumstances or your feelings change, it's best to update your estate plan as soon as possible. 

4. Divorce or the death of your spouse.

If you and your spouse separate, or if they pass away, you may need to set a new estate plan in motion. Critical positions like beneficiary, powers of attorney and trustee may now be left unfilled. Although this is a very emotional time, it's best to make these changes as soon as possible as your estate is very vulnerable following a divorce or death.

5. Increase in assets or liabilities.

If you've added a new asset (or sold one) you may need to account for the change in your estate plans. For seniors, these changes may mean closing a 401k or selling the family home.

6.Moving to a new state.

Laws about estate panning and inheritance differ by state, so if you've made the move to a new one, you'll need to update your plan with state laws in mind. Your estate planner should be familiar with these and how they can impact your specific plan.

7. Remarriage.

Cupid works in mysterious ways and you can find love at any age. Many newly remarried seniors do not immediately realize that remarriage will change existing estate plans by default. A will made before a new marriage is very likely to be contested and the last thing you want is your loved ones in conflict upon your death. Update your estate plans as soon after your wedding as possible and let your children and new spouse know where they stand so they won't be confused at any change of plans upon yourr death.

8. The death of a beneficiary, executor or trustee.

Close friends and even children may pass before you do. In their grief, few people remember that the tragedy leaves their estate plans in disarray. You'll have to fill any position that is now vacant and spell out an inheritance for any widowed children or the spouse of your deceased loved one.

If you update your estate plan regularly and after these life events, you can feel secure that your wishes will be carried out as you want upon your passing.

Plus, when you update your will routinely, there's less likely your family will experience conflict over it, which is an important legacy to leave them.