By Mitchell I. Kitroser
Kitroser & Associates
Robert (Bob) is 84 years old and a retired corporate executive. His net worth is approximately $10 million. Bob and his second wife, Laurie live comfortably in an affluent community and have had a good life together for the past 12 years. Bob is Laurie’s fourth husband. She has a net worth of $15 million. When Bob and Laurie got married, they signed a pre-nuptial agreement which set forth that if they divorced, each would take what they brought into the marriage and they would split the marital assets. The agreement further stated that upon the death of either of them, the other would not inherit anything from the other’s estate and that Laurie would have the right to live in their home for the rest of her life if Bob pre-deceased her.
Bob has three adult children, Stuart, Andrew and Donna from his first marriage. Bob’s children all live out of state and have stopped visiting as frequently since they have never really felt welcome around Laurie. They still try to stay in touch with their father by the telephone but are finding it more difficult to communicate with their father over the phone. The kids and Laurie have never had a close relationship but they recognize she has been there for Bob as he has transitioned from a vital and energetic 72-year-old active man into an 84-year-old with significant physical and mental health issues including, most recently, a diagnosis of Parkinson’s disease with dementia.
At this point, Laurie runs the household and Bob’s children cannot even get to their father without Laurie’s permission since they live in a gated community. What really alarmed the children was when their father’s financial advisor called last week and informed them that Laurie was moving all of their father’s money from his advisor to another investment advisor by using her Power of Attorney. The children were not aware that their father had signed a new Power of Attorney, appointing Laurie.
Since the children do not have a trusting relationship with Laurie, they feel that they cannot have a frank and open conversation with her to discuss what is going on. Fearing she may be exploiting Bob, they believe they have no other option but to begin incapacity and guardianship proceedings and seek to set aside their father’s new estate planning documents, even though they have not actually seen them. Bob, in a mentally weakened condition and completely dependent on Laurie for his daily needs, will be reluctant to go against his wife. Additionally, in his mind, she is his caretaker now and has stood by him for twelve years. Despite the pre-nuptial agreements in place, he believes that she should be entitled to something for that (or has she told him that he should believe that). The ensuing fight will be bitter and costly, both emotionally and financially. Situations like Bob’s happen all the time. This is only one example of guardianship litigation.
When an individual is unable to make decisions for themselves and when traditional estate planning (i.e. Durable Power of Attorney, Health Care Surrogate Designees and Successor Trustees) does not adequately address the needs of an incapacitated person, Judges are often called in to settle family disputes over control of a person’s life, including their finances sometimes including where they should live and with whom. Often, there is an element of financial exploitation to the cases, sometimes involving spouses, sometimes children and occasionally strangers who have insinuated themselves into a vulnerable person’s life. Sadly, but by no means surprising, the toughest fought cases usually involve those with significant wealth and the battle is really over the person’s money. Evidence will include medical, financial and historical testimony and documents in order to provide the Judge with a clear picture of what has led to the need for court intervention.
An Incapacity and Guardianship proceeding should not be undertaken lightly. It is demeaning to the individual and results in the removal of many of the rights of citizenship. The law considers it to be an extreme solution, only to be implemented when no other alternative is available.
It is important as advisors that we work together to educate our clients and make them aware of the potential dangers and complications which they may face when families struggle with diminishment of capacity and control over assets and inheritance. Careful pre-planning and the implementation of an estate plan, along with a strong team of trusted advisors around a client before his or her capacity begins to diminish can help to avoid many of the most egregious outcomes. A client needs to take steps now to protect themselves and their wealth so their needs and their intentions as to legacy are preserved.
Mr. Kitroser is the managing attorney of Kitroser & Associates. Mr. Kitroser is AV rated by Martindale Hubbell, the highest possible rating for an attorney. He is a member of the National Association of Elder Law Attorneys, the Academy of Florida Elder Law Attorneys, the Real Property and Trusts Section of the Florida Bar, the Elder Law Section of the Palm Beach County.