New Laws that Affect Arizona Probate, Guardianship, Conservatorship and Trust Administration (Effective January 1, 2012)

The 2011 Arizona legislature has passed a number of measures affecting cases covered by the probate code.  The Arizona Probate Code covers more than just the passage of property after death.  It also governs guardianship,  conservatorship, trusts, and powers of attorney These new laws are scheduled to take effect on January 1, 2012. 

There are general trends in these statutes.  The incapacitated and protected person is given more deference to select his or her own guardian and conservator.  Guardians, conservators and attorneys must demonstrate to the court that they attempted to keep costs down.  The court can exercise more control over costs that might diminish an estate. 

Here are some highlights:

14-1104. Prudent management of costs

In probates, guardianships, conservatorships and trust administration, the fiduciary (that is, the personal representative, guardian, conservator or trustee) must preserve the assets, making sure that the benefits of her decisions are worth the costs.  The statute makes an exception if this cost benefit analysis is excused by a governing instrument.  For example, it is more expensive in most cases for a person to receive 24x7 care at home than it is in a nursing home.  If a person indicates in his trust that he wants home care, despite the added cost, his trustee is not required by this statute to opt for the cheaper care.

This statute also requires the court appointed lawyer, any guardian ad litem, and the court, to continually consider the ongoing costs associated with the proceeding.  This means that they must act in the best interests of the ward, avoid engaging in excessive or unproductive activity, and consider the relative costs and benefits before pursuing litigation for the protected person.  For example, suppose that a drug addict exploited a vulnerable adult.  If there is little prospect of recovering the vulnerable adult's stolen money or property, the statute says that the attorney or the court should consider the cost of bringing such a proceeding, as against the limited prospects of success.

14-5109. Disclosure of compensation; determining reasonableness and necessity

When a guardian, a conservator, an attorney or a guardian ad litem who intends to seek compensation from the estate of a ward or protected person first appears in the proceeding, that person must give written notice of the basis of the compensation by filing a statement with the court and providing a copy of the statement to all persons entitled to notice. The statement must provide a general explanation of the compensation arrangement and how the compensation will be computed.

Compensation paid from an estate to a guardian, conservator, attorney or guardian ad litem must be reasonable and necessary.

14-5110. Claim deadline for compensation; definitions

A. In a guardianship, conservatorship or protective proceeding, unless a later claim deadline is established in advance by the court, a claim for compensation by attorneys or guardians ad litem who intend to be paid by the ward or protected person's estate is waived if not submitted to the fiduciary in writing within four months after either rendering the service, incurring the cost, initial appointment of the fiduciary or the effective date of this section, whichever is later. A claim is deemed submitted on delivery, mailing or electronic transmission to the fiduciary. A subsequent appointment of a substitute fiduciary does not renew the claim period.

 B. This section does not apply to an attorney seeking compensation based on a contingency fee agreement.

 C. For the purposes of this section: 1. "Compensation" includes fees, costs and reimbursable expenses. 2. "Estate" includes any estate established pursuant to this title except a trust unless the trust is supervised by the court and the ward or protected person is a beneficiary.

14-1108. Arbitration of disputes; alternative dispute resolution

The court now has the power to order the parties into a settlement conference, or mediation, or arbitration in any case  covered by the probate code.

14-1105. Remedies for unreasonable conduct; definitions

If the court finds that fiduciaries, parties or attorneys incurred unreasonable fees, the court may order them to compensate the estate or the ward.

14-5307. Substitution or resignation of guardian; termination of incapacity 

The statute now gives the incapacitated or protected person the ability to write a simple letter to the judge (a formal court pleading is not required) asking for a finding that she no longer needs a guardian or that the guardian should be changed.  The court now has the power to hold a person who is not a party to the case in contempt of court for interfering with the transmittal of that letter to the court.

This statute also says that interested persons other than the ward who want to communicate to the court, within 12 months of the court having appointed a guardian, that the ward does not need a guardian or that the guardian must be changed, now have to request special permission from the court to do so, by filing formal affidavits setting forth facts.

14-5415. Resignation or substitution of conservator

If the protected person request that her conservator be replaced, the court has to do so, unless the court finds that it is not in the protected persons' best interests.  The court does not have to make a finding that the conservator who will be replaced acted inappropriately.  The court can impose limits on how much of the incapacitated person's money can be used to compensate a conservator who seeks to prevent his own replacement.

 

14-5418. Inventory and records

Unless otherwise ordered by the court, in response to the request of any person who is otherwise entitled to receive the conservator's annual account, but not more often than every 30 days, the conservator must:

1. Allow the person to view the protected person's financial records, the conservator's billing statements, the billing statements of the conservator's attorney or other records related to the protected person under the conservator's control.

2. Provide the requesting person with copies of these documents. Unless otherwise ordered by the court, the conservator shall allow the person to view or provide copies of the requested documents to the person as soon as practicable but no later than thirty days after receiving the request. The requesting party must pay reasonable copying costs.

3. Provide a report of receipts and disbursements of the conservatorship.



14-1109. Repetitive filings; summary denial

If a person files substantially the same petition or motion multiple times within the same twelve month period, and does explain in detail that circumstances of changed since the last time he filed and was denied, the court can summarily deny the request even without a hearing and even if nobody else involved in the case objects.

14-5108. Guardianship of foreign citizens

The court can order a guardianship of an adult who is a foreign citizen only if he or she is under age 21 and is on a temporary visa or is a lawful permanent resident.  The good thing about this statute is that it prevents the probate court from being forced into the roll of detaining illegal aliens.  But the statute is written so poorly that it might prevent a necessary guardianship for any adult who holds dual citizenship.

 

 

Paul B. Bartlett, P.C.

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