As Carolyn Henderson anxiously watched her husband’s flickering vital signs on the Intensive Care Unit monitor, she considered the irony of their circumstances. When she and Kirk planned how they might spend their thirtieth wedding anniversary, this sickbed vigil was the farthest thing from their minds. But then on the very day they planned to celebrate 30 years of marriage, Kirk Henderson, a robust, health-conscious, ex-pro football player in his mid-fifties, unexpectedly suffered a stroke. As the hours ticked by with no sign that Kirk would regain consciousness, Carolyn considered for the first time that he might not pull through.
Although Kirk didn’t die, he hasn’t fully recovered. Today, two years after his stroke, the aftermath of his illness has rendered him barely able to walk or use his right arm. His speech is slurred, his thinking processes are muddled, and he will probably need physical therapy for the rest of his life. Carolyn tries not to dwell on the tragedies of her husband’s illness, emphasizing instead the miraculous progress he has made in so many areas. But just when she starts to think things are returning to normal, she’s reminded that in the eyes of the law, her husband is as good as dead.
Declared mentally incompetent in a court of law, Kirk Henderson no longer has the right to make any decisions for himself. He can’t sign a check, conduct a financial transaction, or even decide how he wishes to be cared for.
When they least expected it, the Henderson’s discovered what insurance companies have been trying to tell us for years. For most of our lives, the greatest risk to our well-being isn’t death. It’s the ever-growing likelihood of becoming seriously ill or injured. And when illness or injury makes us unable to manage our affairs for ourselves, we may face an ordeal nearly as debilitating as our disability itself. It’s a legal process commonly called Living Probate, and for those who must endure it, it is often a living nightmare.
What is Living Probate?
Many people know that probate occurs when someone dies with a will in force, or intestate without a will. This legal process is so-called death probate, and it establishes the validity of the deceased’s will (or when there is no will, determines the deceased’s heirs). The probate process identifies and establishes values for the assets of the deceased; ensures that creditors are paid; sees the courts and attorneys get their fees for handling the probate; and lastly, distributes to the heirs whatever remains of the estate after all debts and expenses have been paid.
What most Americans don’t know, however, is that they may find themselves in the midst of probate while they’re still alive. This living probate ensnares many of those who become unable to make personal or financial decisions as a result of serious injury or debilitating illness.
Few can argue with the idea behind living probate. Its goal is to protect an individual who can no longer protect himself or herself, and it seeks to identify the person or persons best suited to take over the individual’s financial affairs and personal care. That’s the theory. But in practice, living probate can be a costly, time-consuming, bureaucratic and public process that often achieves an outcome vastly different from what the individual would have wanted, just like death probate.
Although it varies from state to state, living probate usually involves these steps:
- Someone, usually a spouse, child or parent, must file court papers to have an individual declared legally incompetent.
- Interested parties, such as family and creditors, will usually be notified.
- Notice of the hearing will be published in a local newspaper.
- If the individual’s competency is contested, an investigation will ensue.
- Finally, a hearing will take place, at which the individual may have to be present if his mental or physical health will allow it. Medical evidence and testimony will be introduced.
If the evidence justifies the conclusion, the individual will be declared mentally incapacitated or incompetent, and the court will appoint others to act on his or her behalf. In general, this responsibility is split into two roles. A guardian makes personal decisions for the individual. The guardian’s sphere of responsibility includes medical care and long-term care issues. A conservator is the person the court designates to be responsible for the individual’s financial affairs.
Often both roles are assigned to the same individual. That’s the usual outcome when the person declared mentally incompetent has a spouse ready, willing, and able to assume responsibility.
It’s another story when there is no spouse, or the spouse, due to age, illness or some other factor, isn’t able to manage the affairs of the individual. The roles are frequently separated in contested cases such as the notorious Groucho Marx competency trial. At the conclusion of the first trial ─ a sordid invasion of Groucho Marx’s personal life ─ his live-in girlfriend was declared his personal guardian, and his bank was declared his conservator.
If the court determines that there is no suitable relative or family friend who can fill the role, a professional guardian or conservator (who is typically a total stranger to the individual) will be appointed.
Clearly, it’s hard to imagine a more humiliating process. Adding insult to injury, it is the individual whose competency is in question who must pay all the court fees, publication fees, and other expenses incurred during the Living Probate. That’s true, even if the Living Probate has been instigated against the individual’s will!
Stan Baker was on his way home from work when his car was struck head-on by a drunk driver. Stan was brought to the hospital in a coma, and the doctors could provide his wife, Maggie, with little reassurance that he would ever regain consciousness.
Still reeling from the shock, Maggie was forced to confront yet another emergency: their financial affairs.
Stan had never considered the possibility that he would be unable to make decisions, whether personal or financial, on his own behalf. So, at the time of the accident, Stan had left no legal documents authorizing Maggie to act for him. That omission, Maggie was dismayed to discover, had almost immediate implications.
When Maggie needed to raise funds to cover expenses, she found she couldn’t sell any of their joint property, nor could she sell the assets in Stan’s name alone. In desperation, Maggie sought out a finance company that agreed to loan her enough money to get by for a while at an exorbitant interest rate.
As it became apparent that Stan might linger in a coma indefinitely, Maggie was forced to do the seemingly unthinkable: she asked her attorney to initiate a Living Probate to have her husband declared mentally incompetent and to give her authorization to act on his behalf.
The hearing itself was far from the formality Maggie thought it would be. In fact, it was a complicated, public, and embarrassing invasion of their private lives.
Making matters worse, Maggie faced a challenge from Stan’s adult daughter from a previous marriage. Stan, a successful entrepreneur, had built a thriving business and accumulated a sizable investment portfolio. His daughter feared that if Maggie were placed in charge of Stan’s financial affairs, Maggie would raid all his assets, take over his business, and effectively eliminate any opportunity the daughter might have to inherit from her father. She filed an action that she, not Maggie, be appointed her father’s conservator.
To Maggie’s dismay, she learned that judges have tremendous discretion to decide who will be appointed guardians and conservators. Although she won a partial victory (she was appointed Stan’s guardian), the judge responded to the concerns of Stan’s daughter by appointing a professional conservator to manage Stan’s financial affairs. Maggie suddenly found herself unable to dispose of any of their joint property or even write a check on their joint account without obtaining the approval of this professional conservator, a total stranger.
Please check back tomorrow for the second half of this article.
Why Choose Morris Hall:
You have a number of options when it comes to estate planning, so why pick Morris Hall? First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters. Also, MH is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones. We are one of only two firms inArizonathat belong to the AAEPA and are the only firm in that has been granted membership. If you have assets and loved ones that you want to protect, you are in good hands with MH. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.