During your lifetime, it may be necessary for a court to appoint a conservator to oversee your affairs when you are no longer able to do so. A conservatorship can apply to both a person-i.e., someone to make healthcare decisions for you-and to the property contained within your estate. While you can nominate a conservator as part of your estate plan, the final decision rests with a California probate court. You can also sign a power of attorney granting another person control over your financial affairs, without the need for a separate court order.
California courts will look at whether a potential conservator exercised “undue influence” over a person. For example, an unscrupulous individual might use a conservatorship as a means of using an elderly relative’s assets for their personal gain. Similarly, other persons or groups with an interest in a person’s estate might use the conservatorship process to manipulate the situation for their own advantage.
In re Conservatorship of Person and Estate of Melanson
Here is a recent example from a case decided by the California Court of Appeal. This case is discussed here for informational purposes only, and should not be construed as a complete statement of California law.
Mary Melanson and her late husband established a trust in 1994. The original trust terms provided that, upon both of their deaths, most of the couple’s property would go to Catholic Extension, an Illinois-based charity that provides support for Roman Catholic dioceses. In 2009, following her husband’s death, Melanson amended the trust to name Catholic Extension as a co-trustee. Catholic Extension then assumed control of most of Melanson’s finances.
The following year, Melanson expressed concern to family members about Catholic Extension’s management of the trust assets. She feared Catholic Extension officials would force her to leave her home and enter a nursing facility. By this time, Melanson relied more and more upon her nephew, Ralph Zehner, to assist her with personal matters. In 2012, Melanson revoked her 1994 trust-and Catholic Extension’s role as co-trustee-and formed a new trust with Zehner as the successor trustee. Under the new trust, Catholic Extension would still receive the majority of Melanson’s assets after her death, with Zehner receiving the rest.
Catholic Extension moved to take control of Melanson’s assets. It filed a petition with a California probate court seeking to rescind the 2012 trust, restore the 1994 trust, and appoint conservators of its choosing for Melanson’s person and estate. Zehner, with Melanson’s approval, filed his own petition seeking appointment as conservator.
The probate court, and later the Court of Appeal, sided with Zehner. Although there was a presumption of “undue influence” given that Zehner was a beneficiary of Melanson’s amended trust, the court found he overcame that presumption. Testimony showed Melanson was clearly dissatisfied with Catholic Extension’s handling of her affairs, and Zehner, her closest living relative, was capably assisting her. Further, there was no evidence Melanson lacked the legal capacity to revoke her prior trust and make a new one.
Always Plan Ahead
Whenever a person holds substantial assets, disputes can arise between potential beneficiaries. A good estate plan is always the best defense. If you need the services of an experienced California estate planning attorney, contact the Law Office of Scott C. Soady today.