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COA Gives Special Needs Community Big Win in Placement Case

This is a published decision about a guardianship over a person with a developmental disability (a “DD guardian”), and more specifically, the powers of a DD guardian versus Community Mental Health (“CMH”) with respect to the transfer of the protected person from one CMH facility to another. As probate lawyers understand, DD guardianships are not controlled by the probate code (“EPIC”) but rather by the mental health code.

The case is called: In Re Guardianship of Lisa Brosamer.  Click on the name to read the case.

In this case, Lisa, the protected person, had lived in a CMH home called “College Avenue” for 10 years. When CMH notified the guardian that it intended to move Lisa to another CMH home, the guardian filed a petition in the local probate court seeking to enjoin the move.

The controlling law, MCL 330.1536 says:

(1) A resident in a facility may be transferred to any other facility, or to a hospital operated by the department, if the transfer would not be detrimental to the resident and the responsible community mental health services program approves the transfer.

(2) The resident and his or her nearest relative or guardian shall be notified at least 7 days before any transfer, except that a transfer may be effected earlier if necessitated by an emergency. In addition, the resident may designate 2 other persons to receive the notice. If the resident, his or her nearest relative, or guardian objects to the transfer, the department shall provide an opportunity to appeal the transfer.

(3) If a transfer is effected due to an emergency, the required notices shall be given as soon as possible, but not later than 24 hours after the transfer.

At the hearing, CMH relied on affidavits supporting the proposition that this move would not be detrimental to Lisa. The guardian presented testimony from several witnesses, including Lisa’s doctor, who said that the change would be harmful to Lisa.  The probate court granted the injunction, and this appeal followed.  The COA affirmed the trial court.

The decision of the COA is stunning, and the fact that this is a published opinion, even more so. Clearly the statute allows CMH to make this decision and provides that the remedy for an objecting party, such as a guardian, is an administrative appeal.

The opinion would be more sensible if the COA was taking the position that the probate court order only maintained the status quo until the administrative appeal process played out. But that is not what they say.  Rather the COA says: “For purposes of this appeal, we will assume that the order serves as a permanent injunction from transferring Lisa to any facility at any time without court approval.”  Clearly, therefore, the COA has given the probate court the power to circumvent the nearly unfettered authority of CMH over the placement of its residents granted to it by MCL 330.1536.

This case represents a huge win for the special needs community. But I believe the decision stands on shaky ground, and I would be surprised if the State does not seek leave to appeal this decision to the Michigan Supreme Court.  We’ll see.

Cautious Optimism Greets MSC Decision on SBO Trusts

The SBO Trust is back – or is it?

Yesterday the Michigan Supreme Court released its long awaited decision in the case of Hegadorn v The Department of Human Services.  [Click on the name to read the opinion.]

To summarize, for twenty years the “Solely for the Benefit Trust” (“SBO Trust”) was the primary Medicaid planning tool for married couples in Michigan. In August 2014 that reign ended when the Michigan Department of Human Services (now the Michigan Department of Health and Human Services aka “DHHS”) reinterpreted their rules and started treating assets held in SBO Trust as available resources.  That change led to litigation challenging the DHHS interpretation, which litigation was unsuccessful in the Court of Appeals.  The case was then taken up to the Michigan Supreme Court.

The majority opinion in this case holds that DHHS was wrong when it determined that assets in an SBO Trust can be considered available resources. They say:

The SBO trusts  at  issue  all  contain  language stating  that distributions or payments from the trust may only be made to or for the benefit of the respective community spouse and that the  trust resources may be used only for the community spouse’s benefit.   The ALJs and the Court of Appeals recognized this but erred by concluding that payments to or for the benefit of the community spouses were available  to  the  institutionalized spouses.   Because the  community spouses  are  not themselves applying for or receiving Medicaid benefits, they are not “the individual” referred to in 42 USC 1396p(d)(3)(B). Thus, the Court of Appeals erred by holding that the  possibility of  a  distribution  from  each  SBO  trust  to  each  community spouse automatically made the assets held by each SBO trust countable assets for the purposes of the respective institutionalized spouses’ initial eligibility determination. Accordingly, we reverse the Court of Appeals judgment because it was premised on an incorrect reading of the controlling statutes and thus was contrary to law.  It follows that the ALJs’ decisions are also contrary to law and cannot stand, given that they all suffer from the same faulty reasoning employed by the Court of Appeals.

And yet, the majority does not simply order DHHS to approve the applications at issue. Rather it offers the following cryptic explanation of their remedy:

The question now becomes what relief should be granted. … The sheer complexity of the Medicaid program and the Department’s legitimate concerns about potential abuse are paramount considerations in determining what relief is warranted. We further note that, given the reasoning employed in resolving the administrative appeals, the ALJs may have forgone consideration of alternative avenues of legal analysis.  In light of these concerns, we decline to order that the Department approve plaintiffs’ Medicaid applications at this time.  Instead, we vacate the final administrative hearing decision in each case and remand each case to the appropriate administrative tribunal for the proper application of the any-circumstances test.  If the ALJs determine that circumstances exist under which  payments  from  the  trusts  could  be made  to or for  the  benefit  of  the institutionalized spouse,  then  the  ALJs  should  explain  this  rationale  and  affirm  the Department’s decision. However, if no such circumstances exist, the ALJs should reverse the Department’s decisions and order that the Medicaid applications be approved.

One has to wonder, if, as the opinion says, DHHS was wrong in concluding that assets in an SBO are available resources to the institutionalized spouse, what “alternative avenues of legal analysis” or “circumstances” test are they expecting the ALJ to apply?

The McCormack Concurrence

In a lengthy concurring decision, Justice Bridget McCormack, the Chief Justice on the MSC, argues that while the assets in an SBO may not be available resources, the funding of an SBO within five years of application would result in a divestment, and accordingly the decision of the MSC will provide no benefit to the elder law bar or their clients. While her reasoning seems strained, she has clearly offered the DHHS an avenue to continue to fight the use of SBO trusts in Medicaid planning.  And, as Justice McCormack correctly notes, the majority expressly avoided the question of a divestment analysis in their opinion.

Conclusion

The immediate impulse to rejoice at this important decision needs to be tempered. The MSC could have given the elder law bar a clear victory and reinstated the SBO trust without qualification, and nearly all of their opinion seems to be consistent with that result.  And yet, they chose to pull their punches and leave open the possibility that, in the end, this may prove to be a Pyrrhic victory.  Time will tell.

For my prior posts on this issue see:

SBO Policy Change Update (December 4, 2014)

Bloody Thursday (June 3, 2017)

SBO Believers Hear Heartbeat (March 13, 2018)

Credit again to all who believed and have relentlessly pursued this case, most notably our good friend Jim Steward of Ishpeming.

Another POST Post

It’s been over a year since Michigan adopted a law authorizing the use of a Physician’s Order for Scope of Treatment (POST). The details of that law were discussed in that prior post:  POST set to join Michigan’s Medical Directive Stew.  (Click on the name to read that post.) 

As discussed in that prior post, as a result of the passage of the law, State regulators were tasked with creating a uniform POST form. They have done that.  It has been published, and yesterday was the deadline for comments.  I don’t know if any comments were submitted, or if any changes will be forthcoming.  But for now, I think it is safe to assume that the following document is either exactly what will be used, or very close to what will be used: MI-POST Form (click on name to see the form).  I will post more in the future if significant changes are made as a result of comments.

The same State site also offers an information sheet (click here) and a frequently asked questions sheet (click here), both of which might be helpful to those wanting to better understand the purpose and use of this new planning tool.

Lawyers won’t be preparing MI-POST forms for clients, but estate planning lawyers need to be aware of these forms and understand their place. Clients may have questions about them, and patient advocate designations should probably be updated to include POST powers.

Proposed Policy Promises Problems for Planners

This is a post about Medicaid long term care planning. The topic is a proposed policy change related to the use of promissory notes in Medicaid planning.  If adopted, the new policy would take effect July 1, 2019.

The proposed policy says:

In order for a promissory note to be a bona fide loan:

  • The loan must be enforceable under Michigan law;
  • The note agreement must be in effect at the time of the loan transaction;
  • The borrower must acknowledge the obligation to repay the loan;
  • There must be a plan to repay in the loan document; and
  • The repayment plan must be feasible.

Medicaid planners use private promissory notes in a couple important contexts, both in relation to divestment. [Divestment is the term used by the Michigan Department of Health and Human Services to mean non-exempt asset transfers for less than fair market value that occur during the five year “look back” period. Divestments result in penalties.]

Promissory notes are sometimes used as alternatives to commercial annuities in “half loaf” divestment planning.  And promissory notes are used to “cure” divestments that clients come in the door with (i.e., divestments done before they met with an attorney).

The primary impact of these proposed changes would seem to be the elimination of promissory notes as a tool to cure preexisting divestments. Specifically, the second bullet above which would require that the note be “in effect” when the funds are transferred to the borrower, would be hard to work around in the typical situation in which a client comes to the lawyer having already made penalizing divestments.

The other bullet points in this notice seem to be directed at the integrity of the arrangement. While ominous, these bullets appear to be less clearly impactful on current planning approaches.

Like annuities, promissory notes, have become a target of MDHHS policy writers. Hope that the new administration in Lansing might be less antagonistic toward Medicaid planning concepts may be misplaced.

Free Programs on New Trust Law

We interrupt this blog for a special message.

Chalgian and Tripp Law Offices will be hosting a series of conversations about the new divided and directed trustee laws that take effect this month. I wrote about the importance of these new laws in my prior post:  The Next Big Thing in Michigan Trust Law (click on the name to read the post).

There is no charge to attend these events, but reservations are required, and seating will be limited.

The events are:

April 16 at 4:00 – 6:00pm in our East Lansing office.

April 23 at 4:00 – 6:00pm in our Southfield office.

April 30 at 4:00 – 6:00pm in our Midland office.

To register, click on the event you would like to attend.

At all three events, the discussion will be led by Attorney Chris Smith. If you don’t know Chris, he is an exceptional special needs and elder law attorney, who is also currently the Chair of the Elder Law and Disability Rights Section of the Michigan State Bar, as well as a member of the Board of Directors of the national Special Needs Alliance.

These are important developments in Michigan trust law. These programs are designed for estate planning attorneys and trust officers. Financial planners who anticipate that they may want to assume fiduciary duties under the new laws should also consider attending.

I hope to see you there.

 

 

A Corktown Hotch Potch

UPDATE:  The case of In Re Monier Khalil Living Trust was first published March 12, 2019.  For reasons I do not fully understand, the Court of Appeals granted a motion for reconsideration, vacated its original opinion and issued a new opinion on May 14, 2019, also published.  Click here to read on the newer and final opinion.  The outcome seems to be the same, and my analysis below is not altered.

 

This is a published Court of Appeals probate case which looks at the limits of a trial court’s authority to dismiss an action on its own initiative.

The case is called In Re Monier Khalil Living Trust (click on the name to read the case).

Spouse died leaving property in trust for the surviving spouse, Evelyn. Evelyn was given the right to all income, an unlimited power to invade principal, and the power to redirect or distribute trust property to others, during her life and upon death.  Further, Evelyn’s decisions with respect to all matters were expressly not subject to review.

Among other things, the trusts contained business and real estate interests in Detroit’s trendy Corktown neighborhood.

Evelyn began exercising her powers to distribute trust property among her children, and did so unequally as the document allowed. After several years, the children who felt they were getting shorted sued, claiming that, among other things, Evelyn was being unduly influenced.

The trial judge held several in-chambers conferences with the lawyers, but did almost nothing on the record in the courtroom, and ultimately dismissed petitioner’s case sua sponte. The petitioners appealed.

Baldwin’s Foil

I think the reason this case was published is because the COA had to rely on an unpublished opinion to get to the result it wanted.

Appellees relied on In Re Baldwin Trust 274 Mich App 387 (2007), a published case in which the COA upheld a trial court after it had dismissed a matter sua sponte when the trial judge had essentially heard enough.  Appellants, however, had to rely on an unpublished decision: In Re Clemence Trust (COA docket 332099, October 31, 2017), in which the trial court was reversed after doing the same thing. Click on those case names if you want to read those cases.

In this matter, the COA spent several pages explaining how the facts between the two cases differed, and how the facts of this case were more like Clemence than Baldwin.  One clear point of irritation to this panel of the COA was that this trial judge did everything, or nearly everything, in chambers, and left the COA with almost no record to review.  As a result of this analysis, the COA reversed the trial court’s decision and remanded the matter for further proceedings “on the record.”

With this decision there is now a published decision to rely upon as a foil for Baldwin.  The law seems to be that while probate trial courts may at times dismiss cases sua sponte, the decision to do so is subject to review.  Among the factors to be considered in deciding whether the trial court acted properly, is the extent to which the trial court allowed the aggrieved party to create a record.

The Whimpiness Factor

Another point made by the COA is that the petitioners never actually formally requested a hearing on the record, and never actually initiated discovery as they are empowered to do. In most cases, the COA would say that they therefore had abandoned their right of appeal on these issues.  But here, the COA allows those issues to serve as the basis for their decision – but not without some heat:

The attorneys also deserve a share of the blame for our inability to properly review this case. It is incumbent on counsel to insist on a record of critically important proceedings, even in the face of judicial disapproval or disagreement. A written motion to create a record might have avoided the need for this appeal.

[I recognize that some litigators who practice regularly in Wayne County (and perhaps other courts) might suggest that this behavior is not whimpiness at all, but rather a matter of survival.]

[When and how to challenge a controlling trial judge is a topic for another day.]

A Hotch Potch B’Gosh

So finally: What is a Hotch Potch?

This case was started with a “Petition for …. return of property to hotch potch…”

This opinion informs us that hotch potch (aka “hotch pot”) is a legal term of art, albeit an “antiquated” one.  Basically, it means: squaring things up before distributing the estate when numerous advancements have been made to the greedy kids.  Nice to have a label for it, or I should say, a label that can be used in polite company.

 

Reflections from a Costly Goose Chase

The crux of this unpublished opinion is whether the cost of litigation initiated by a conservator that turns out to be a big waste of money, should be paid out of the estate.

In In Re Conservatorship of Marilyn Burhop the probate court appointed a local lawyer (“Jones”) as conservator over a vulnerable adult (click on the name to read the case).  Jones learned that prior to her appointment, the ward, Marilyn, transferred nearly $500,000 to certain acquaintances (the “Sirchias”).  In addition, Marilyn changed her estate plan to benefit the Sirchias exclusively.

After some preliminary investigation, Jones decided to sue the Sirchias to recover the funds and to initiate litigation to set aside the estate planning changes. After incurring about $175,000 in legal and fiduciary fees, Jones settles. Curiously, perhaps conveniently, the COA fails to share the details of the settlement – such as whether the conservator recovered anything. But reading between the lines, it seems that Jones simply dropped the case.  The issue then became whether the massive fees that Jones and her attorneys charged to pursue this litigation should be allowed as expenses of the estate, when, in the end, the estate received no benefit.  The trial court allowed the fees in their entirety, and the order allowing those fees is what was appealed and affirmed.

Here’s what I think:

Seek Instruction

The way this case begins is all too common. These days, conservators are often appointed to protect a vulnerable adult from financial exploitation, which exploitation may have already begun.  Accordingly the question of whether the conservator should simply protect what’s left or pursue recovery of what may have been improperly removed is typical.  In this case, Jones apparently did some preliminary investigation before initiating litigation, but what Jones did not do, and what I think was her initial mistake, was to ask the probate court for instruction.

In our firm, when handling these matters, we commonly to seek court instruction at the outset. We ask the court to authorize the conservator to pursue litigation and also to enter into an engagement with our firm.  In that process we present the court with the proposed engagement letter.  We don’t do this in every case, but I am thinking we will start doing it more often.

Certainly, it seems to me that, before Jones was $175,000 into the litigation, she should have gone before the court and asked whether this matter should continue to be pursued and at what cost. Perhaps the court would have told her not to pursue the litigation at all, perhaps the court would have found that a contingency fee arrangement would have been more appropriate, or perhaps the decision to drop the matter would have been made at an earlier date?  We won’t know, because court instruction was apparently never requested.

Asset Recovery v Estate Plan Changes

In this opinion, the COA fails to address what I think is a critical distinction. The appropriateness of a conservator seeking to recover misappropriated funds is one thing, challenging estate planning documents is quite another.

With respect to misappropriated funds, such funds would become property of the conservator, would provide additional resources to benefit the ward during her remaining life, and failure to pursue recovery in a timely manner would present the possibility that a statute of limitations would be missed or that the funds would be dissipated and become unrecoverable.

Challenging the estate planning documents is different. Assuming the changes are strictly with respect to testamentary disposition, setting them aside would not increase the resources available to provide for the ward’s needs, and in most cases there would be no statute of limitations to worry about.  In fact, our laws are structured so that such changes are disclosed to the real parties in interest upon death (or in the case of a trust, upon incapacity) and the real parties in interest are empowered to protect their own interests at their own cost.  If there is any argument that a conservator would have a reason to engage in litigation over the validity of estate planning documents, it would be with respect to MCL 700.5428 which imposes duties on the conservator to manage resources in manner that does not disrupt the known estate plan.  Accordingly, for instance, if there are specific gifts, beneficiary designations or joint accounts, in deciding what resources to dissipate on the needs of the ward, the conservator must take into account the impact of those decisions on the overall estate plan of the ward.  But this issue was not raised in this case, and if it were, the appropriate approach would seemingly be to seek court instruction regarding the use of resources.

To my thinking, the decision of this conservator to spend money litigating the validity of the estate planning documents in this case is highly questionable.

Disregarding Valentino

There is an old rule that says a fiduciary is entitled to fees when what they have done has benefitted the estate. The 1983 Michigan Court of Appeals case In Re Valentino Estate, 128 Mich App 87 (1983) is often cited for this rule.  This opinion holds that Valentino was superseded by EPIC.  Well, that’s news to me.  First, I would be interested in knowing whether there is any published authority for that conclusion, I know of none and they cite none.  Further, it is worth noting that as recently as 2010, with the adoption of the Michigan Trust Code, the concept of a benefit to the estate being a basis for allowing fees was seemingly recognized in MCL 700.7904.  While that law relates to a non-fiduciary’s claim for recovery of fees from a trust, the commentary cites cases much older than Valentino for this rule.

Outspent

A common litigation strategy is to simply outspend your opponent until they wilt. In this case, the COA asserts that the Sirchias did just that.  The COA says the Sirchias engaged in a “scorched earth” litigation strategy, noting that no less than sixteen motions for summary disposition were filed (and denied).  The suggestion is that Jones may have had a case, but only relented because she was running out of money to spend on the litigation.  Seems plausible.  But where in the law does it say that in deciding whether to initiate litigation the conservator should assume that the opposing party will play nice? Rather, I think, this is all the more reason that Jones should have sought court instruction before starting this fight, should have limited the scope of litigation to asset recovery, or retained counsel on a contingency basis.

A Duty to Litigate

In passing the COA in this opinion says that Jones would have been negligent “under the circumstances” not to have pursued this litigation. Um.  Not a published decision so I guess I will leave that conclusion alone.

The Specter of Bleak House

Let’s step outside our bubble for a minute and look at this from the perspective of the Sirchias. The estate of someone they apparently had a close relationship with is diminished by $175,000.  Their inheritance is diminished by $175,000.  They presumably had to spend a similar amount defending themselves against claims that, in the end, were dropped.

Many people (who are not probate lawyers) perceive the probate court as a place where the property of the dead and dying is consumed by a hungry pack of lawyers and court officials. It’s an unflattering image that dates back centuries. Without passing judgment on anyone involved in this sordid affair, you can’t help but acknowledge, I think, that this case sort of feeds into that perception.

Conclusion

I’ve gone on long enough.

Many many conservatorship cases arise where something is amiss and prior conduct may give rise to the possibility of financial exploitation of the ward. Whether the conservator tries to remedy those wrongs and recover the missing assets, or to simply move forward and do their best with what they have control over, is often a decision they need to make.

I don’t mean to beat up on the conservator in this case, or to suggest that she didn’t act in good faith. Jones may well have been justifiably outraged by the actions of the Sirchias in the period prior to her appointment as conservator. But even giving this conservator the benefit of every doubt, in the end, it is hard to say that the ridiculously unfavorable outcome of this case could not have been ameliorated, perhaps avoided, had other reasonable decisions been made along the way.

Litigation Strategies Part IX: Six pages of: “You Lose”

I was reading an unpublished court of appeals opinion the other day. It was six pages long and pretty much every part of it could be summarized as: “and therefore the Appellant loses.”

I read most every probate case that comes out, published and unpublished, and I write about a few of them, but I ignore most of them. The ones I ignore are ignored because they don’t say anything important.  Someone lost at the trial level and decided to appeal.  A lot of times the case they had in the trial court was lame.  But, other times it seems like their case may have had merit, but because of the way the matter was handled during trial, at the appellate level, their case stinks.

The morning after I finished the first day of a trial, I was reading a case which was typical of the type of cases that I ignore. And it occurred to me that all these years of reading about all these bad appeals has changed the way I practice, the way I try a case.

I’ve become “that guy.”

In court the prior day, I was annoying; putting opposing counsel (a nice person) through their paces as they tried to admit records and examine witnesses; objecting to foundation; objecting to relevance; objecting to hearsay; arguing that a question was outside the scope of cross exam.

I used to hate lawyers like that. But now I am that.  Not always, but if the case is the type of case that if I lose I might want to appeal, I do those things.

What I understand now, that I didn’t fully appreciate when I was less experienced, is that when a case is appealed, the Court of Appeals will go out of its way to affirm the trial court. And if they can affirm the trial court because an objection wasn’t made or an issue wasn’t preserved, they will.  Affirming the trial court on technical grounds is easier than getting into the more challenging questions of law and fact that were the focus of the case when the appellant hired a lawyer and went to trial in the first place.

So, my thinking is: Don’t make it easy for the COA. When you try a case, in addition to doing what needs to be done to persuade the fact finder to rule in your favor, make sure you create a record that would force the COA to look at the substance of the case if your lose at trial.  Keep bad stuff out if you can.  Get in all the evidence that supports your position, even if it seems like overkill at times.  And most of all: make objections and preserve issues.

Someday I might take the time to count, but, just guessing, I bet 90% of probate cases that get appealed, get affirmed. And that isn’t because all of those cases couldn’t or shouldn’t have been won.

Bottom line: Being “that guy” or “that gal” may be uncomfortable at times, but if you want to avoid having to explain six pages of “you lose” to your client, it’s just the way it has to be.

Point of Clarification: This post is about trial practice in cases that would justify an appeal if you lose.  Being “that guy” or “that gal” in depositions, or in hearings on matters that no one is ever going to appeal, remains just plain obnoxious.

Capacity Case Illustrates Witness Weight

This unpublished opinion provides an opportunity to discuss the types of witnesses that are often involved in lack of capacity and undue influence cases, and how they are weighed at the trial level.

The case of is called In Re Estate of Aurelia Rokosky (click on the name to read the case).

Aurelia lived alone on Grosse Ile. She apparently had no spouse or children.  But she had a friend who lived nearby until 1994 when this friend moved to Portland, Oregon.  In 1976 Aurelia prepared a will leaving everything to this Portland friend.

In 2008, when Aurelia was 86, she developed a new friendship with a person in Michigan. This Michigan friend helped Aurelia with her shopping and housework.  In 2010, this Michigan friend began helping Aurelia with her bill payment and finances.

Aurelia also had a neighbor (“Neighbor Bill”) with whom she had a good relationship until mid-2010. Before their friendship broke off, Neighbor Bill observed that Aurelia suffered from significant confusion, that she was unable, for instance, to operate her television, and that she repeated herself frequently. Their relationship ended, Neighbor Bill claimed, because Aurelia became paranoid.  At one point in late 2010, Neighbor Bill called the local police department because he was afraid that Aurelia was not safe living alone, but the police found her home and living situation to be in reasonable order.

On January 24, 2011, Aurelia saw a lawyer and had a will prepared leaving everything to the Michigan friend. The lawyer testified that she was clear and coherent at their meeting, and that she had testamentary capacity.

That same day, when Aurelia arrived home, she called Neighbor Bill several times, each time in an agitated state, and each time explaining that she had arranged for her estate to pass to the Michigan neighbor at her death.

A few days later, Neighbor Bill and others who knew Aurelia became concerned that they had not heard from or seen Aurelia. The police were called.  Aurelia was found in her home in her bathtub fully clothed.  It is unclear how long she had been in the tub, and she was taken to a hospital where a doctor evaluated her cognition and deemed her to be “profoundly confused.”

Aurelia was discharged from the hospital to a long term care facility where she lived the remainder of her life and died in August, 2013.

Also, it is important to note that in September 2011, Aurelia met with a second lawyer and executed a ladybird deed leaving her home to Michigan friend at her death. That deed was deemed invalid, and that decision was not appealed.  But the second lawyer also testified that as of September 2011, when Aurelia met with him, she had testamentary capacity.

And finally, the Portland friend, in contesting the validity of the will, employed an expert witness, a geriatric psychiatrist, who reviewed the Aurelia’s medical records and opined that Aurelia lacked testamentary capacity on January 24, 2011 (the date of the will) and for every day thereafter.

After receiving all of this testimony, the trial court admitted the 2011 as valid on summary disposition, and the Portland friend appealed.

So, to sum it up, besides the presumably self-serving testimony of the parties themselves:

  • There are two lawyers who met with Aurelia and who testified that Aurelia had testamentary capacity in January 2011 and in September 2011.
  • There is a police report that indicates that Aurelia’s home was reasonably maintained in mid-2010.
  • There is an uninterested fact witness, Neighbor Bill, who testified as to Aurelia having clear signs of cognitive impairment before the 2011 will was executed, and that Aurelia became severely agitated and confused on the very date she signed the will, leading to hospitalization a few days later.
  • There is the evidence that the Michigan friend, a fact witness who seeks to have the will upheld, cannot dispute, which is that she was helping Aurelia with her daily activities, including her finances, before the will was signed.
  • There is a medical opinion from four days after the will was signed, when Aurelia was in the hospital, that she was demented and severely confused.
  • There is an expert opinion that she lacked testamentary capacity on the date the will was signed.

Indeed it is difficult to understand how a trial judge would think that, with all this evidence, this case could be decided on summary disposition. And you will not be surprised to learn that the Court of Appeals reversed that order and remanded the case for trial.  But this case illustrates some important points about how these cases can be viewed at the trial court level, and what witnesses carry the most weight, including:

(1) Trial judges often place great weight on the testimony of the lawyers they know. Capacity is, after all, a legal question and lawyers who regularly prepare estate plans are considered experts in evaluating whether their clients meet the standards of testamentary capacity.

(2) Capacity is presumed. The burden is on the contestant to overcome the presumption of capacity.  In any case where there is a lawyer who prepared the document, this presumption and the testimony of an experienced estate planning attorney, carries great weight.

(3) Testamentary capacity is a low standard.

(4) The “lucid moment” concept is far from dead. Even though Aurelia was deemed incompetent only a few days after the execution of the will, and even though she spent those few intervening days in a confused and agitated state, and even though there is ample evidence of age-related cognitive decline even before the will was signed, the trial judge presumably had no problem concluding that she was clear and coherent at the moment she signed the will, as her attorney testified.

These are the types of witnesses that often exist in lack of capacity/undue influence cases. What we can take away from this example, I think, is that challenging documents prepared by an experienced lawyer is tough sledding, but can be accomplished.  As in this case, expert opinions have become standard practice, and are often critical to surviving summary disposition.  Solid testimony from an uninterested fact witness can also be very valuable.  And, as I have suggested before, surviving summary disposition is often the first objective.  When a case is heading to a jury, the parties each face significant risk and the possibility of settlement increases accordingly.