Was your child a named beneficiary on the life insurance policy of a loved one? If so, you are now probably hearing from the life insurance company that you have to establish a “minor guardianship” or “minor conservatorship” before they can release the proceeds to you. Parents are often frustrated and surprised by this – since they assumed that because they are the parents of the minor, they should just get the money and be able to hold it and use it for their child and then hand it over to the child when he/she becomes an adult. Unfortunately, that isn’t how it works. Minnesota law requires that a minor conservatorship be established (life insurance companies will often, incorrectly, refer to it as a minor guardianship).
What is involved in establishing a minor conservatorship for life insurance proceeds or an inheritance in Minnesota? The proposed conservator (usually parents of the minor) must petition the court to be appointed. The petition sets forth the details of the situation. An attorney is sometimes appointed for the minor child. The court holds a hearing on the petition. A background study may be necessary for the proposed conservator. Depending on the situation, the court may restrict the funds, meaning the conservator cannot spend them absent a court order. Sometimes the courts allow the conservator to spend the funds for the care and well-being of the child while he/she is a minor. In all cases, there are annual reporting requirements by the conservator, so that the court can monitor the account. Each minor conservatorship situation is different and most people find it helpful to have an attorney assist them with the process.
What do you do if your elderly parent needs help making decisions?
- Determine what level of help that they need. This is often easier said than done. You should look at their physical, mental and emotional health and try to determine whether they are still in a position to make their own decisions. Sometimes the elderly can still come to their own decision about their medical care, where they live, etc., but they simply need help implementing their decisions. Sometimes the elderly have become so cognitively impaired, or are so vulnerable, that they can no longer even make their own decision, let alone implement it. Most times, the elderly lie somewhere in between these two extremes. Figuring out what level of help they need often requires the input of the elderly person’s physician. Sometimes you can tell what level of assistance is needed just based upon your own interactions with mom or dad.
- If mom or dad can still make their own decisions, but just need help implementing their decisions, you should take them to an estate planning attorney who can meet with them and get legal documents or other things in place that will allow someone else to help them implement their decisions. These things range from joint accounts to a health care directive to a power of attorney. The estate planning attorney could even put them in touch with resources to help them develop a care plan for if their health takes a turn for the worse.
- If mom or dad can no longer make their own decisions to keep themselves safe, then you should determine whether they have in place legal documents that allow someone else to make decisions for them. These documents are a health care directive (for medical decisions) and a power of attorney (for financial decisions). Depending on the details of the documents and the particular circumstances that mom or dad face, these might be sufficient to allow someone else to act on mom or dad’s behalf.
- If mom or dad can no longer make their own decisions to keep themselves safe and they do not have any legal documents or other measures in place, then you likely need to pursue the appointment of a guardian and/or conservator for mom or dad. Most people find that they need the assistance of an attorney to do this.
If you have questions about how you can help your elderly parents with decision-making, please contact Cindi Spence of Spence Legal Services at (763) 682-2247.
What happens when a child that is under the age of 18 inherits money, either through an estate or directly as a named beneficiary on a life insurance policy or account? Typically, the minor is required to have a conservator appointed to accept and manage the inheritance. Parents of the minor are usually surprised to learn that this is necessary and that they can’t just receive and manage the money on the minor’s behalf, since they are the parents. The process of having a conservator appointed for a minor who is named to receive an inheritance is usually uncontested. However, because of the procedural requirements that must be followed in order to have a conservator appointed, many people find it necessary and useful to have an attorney represent them. If you choose not to have an attorney, the Court will still hold you to all of the Court rules and require that the statutes be followed. Time and again I have seen well meaning parents attempt the paperwork on their own, only to have the process delayed because they didn’t follow all of the Court rules to establish a conservatorship for their minor child. If you have questions about the process to establish a minor conservatorship, please reach out to Cindi Spence at Spence Legal Services (763) 682-2247.
If you are wondering what a guardianship or conservatorship is, and how I can help you with issues relating to guardianships and conservatorships in Minnesota, take a look at this short video clip about Cindi Spence and Spence Legal Services. Feel free to give me a call if you want to talk about your situation.
The Minnesota Supreme Court issued a decision today in the case of In re Guardianship and Conservatorship of Helen Louise Durand, A13-1415 (Minn. February 18, 2015). It affirmed the Minnesota Court of Appeals, holding that Minn. Stat. 524.2-212 (2014), which treates protected and non-protected persons differently in probate proceedings, has a rational basis and therefore does not violate the right to equal protection under the Minnesota Constitution.
The case has a lengthy procedural history. Essentially it involved the Conservator for a Spouse petitioning the District Court to allow an elective share petition to be filed with the probate court, so that the spouse could elect against the estate of her deceased spouse. The personal representative of the estate of the deceased spouse disagreed that the petition was properly brought. At the District Court level the court granted the conservator’s motion for summary judgment, on the basis that requiring the conservator to petition for approval to bring an elective share petition violated the constitution’s equal protection law. The Court of Appeals disagreed that the equal protection laws were violated and reversed. In the opinion today, the Minnesota Supreme Court affirmed.
Minn. Stat. 524.2-212 is the statute that declares the elective share to be personal to the surviving spouse. It differentiates between surviving spouses who are “protected” (under conservatorship) and those who are not. As to those under conservatorship, a petition must be filed with the probate court and a showing made as to why the election is necessary and appropriate. The Minnesota Supreme Court applied the rational basis test and determined that this statute is constitutional because there is a rational basis for treating surviving spouses who are under conservatorship differently from those who are not. The Court reasoned that because individuals under conservatorship are impaired in their ability to manage property and business affairs, this is a substantial and genuine basis for the legislature to justify a distinction focused on the protected persons’ needs. The Court stated, “the Legislature rationally determined that a conservator, whose duty is to manage the pecuniary affairs of a protected person, should not have the unilateral power to make a decision that should be based on both pecuniary and non-pecuniary interests. The Legislature rationally provided that the process should include judicial oversight by findings and an order.”
On February 2, 2015, the Minnesota Court of Appeals issued a decision which should be of interest to both family law attorneys and guardianship/conservatorship law attorneys. In re the Guardianship and/or Conservatorship of Heidi Anne Vizuete and In re the Marriage of Miriam Rose Vizuete vs. Edison Marcello Vizuete, (Unpublished Minn. Ct. App. A14-0474) (“Vizuete (II)”)
Although the Minnesota Court of Appeals affirmed the district court’s ruling in Vizuete (II), confusion abounds for guardianship/conservatorship law practitioners and courts in Minnesota in cases where an incapacitated “child” turns 18, both parents have some sort of custodial rights to the child (in their family law custody/divorce case) and guardianship and/or conservatorship over the newly turned adult is sought by someone.
Facts of Vizuete (I): Mom and dad divorced, with divorce decree giving them joint legal custody of autistic child and giving mom sole physical custody, with dad having parenting time. Autistic daughter turns 18. Mom files petition for guardianship. Dad files petition for limited guardianship and conservatorship (not seeking full powers because he thought daughter could do some things on her own). Court appoints mom as sole, unlimited guardian and denies dad’s petition. Dad appeals arguing guardianship order reduced his parental rights established under the custody order. Court of Appeals agrees and remands for district court to consider the “competing guardianship petitions in light of the custodial arrangement between the parties and the requirements for modification of appellant’s legal custody under chapter 518” (Vizuete I – Unpublished Mn. Ct. App. filed July 3, 2013, 2013 WL 3368334)
Facts of Vizuete (II): Mom filed motion in family court file to modify her legal custody from joint legal to sole legal custody. District court denies this motion, saying she has not presented prima facie case of significant change in circumstances that show endangerment to daughter’s physical or emotional well being. Guardianship court issues new order, explaining that because there was not a basis to modify the parties’ current custody arrangement, it would evaluate their guardianship petitions in light of their respective custodial rights and under the best interest of the child standard. Guardianship court appoints mom as guardian with unlimited powers and dad as guardian with limited powers “with respect to any major decisions affecting Heidi”. The Court of Appeals affirmed, noting that “the district court did not abuse its discretion by appointing a guardianship for Heidi that was in her best interest and that does not abrogate either party’s custodial rights under their preexisting and current arrangement.”
Takeaways from Vizuete (II):
- Guardianship/conservatorship attorneys will need to ask their client for a copy of divorce/custody decree and carefully analyze the custodial rights granted to each parent therein.
- In deciding guardianship matters involving incapacitated individuals who are turning 18, if there is a divorce decree or custody order involving that “child”, the district court in the guardianship action should make inquiry into the underlying divorce decree and make specific findings and an order that takes into consideration the competing guardianship petitions of divorced parents in light of their respective custodial rights under their divorce decree and the modification standards applicable to their custodial arrangement in their family law file.
- Family law practitioners who are representing someone with an incapacitated, or potentially incapacitated, child, will want to be mindful of the “labels”, as well as the substantive rights, that are assigned to their client in divorce/custody situation. A custody label may not just be a “label” when it comes to potentially incapacitated individuals, as it may now affect the outcome of guardianship proceedings that will occur after the child reaches the age of majority
More questions than answers are raised by this decision. Does this decision mean that a court can no longer appoint a third party professional guardian in cases of “feuding parents”, because doing so would abrogate both feuding parents’ custodial rights? Does the Court need to take the custodial arrangement in the divorce decree into account if only one parent files a petition, and the other parent doesn’t object? Confusion abounds. We will need to wait and see how Vizuete (II) impacts guardianship actions of incapacitated adults when their parents disagree.
If you are petitioning to be a guardian or a conservator in Hennepin County, you must watch this series of videos about the responsibilities of being a guardian or conservator in Minnesota. It’s good viewing for individuals considering being a guardian or conservator in any county in Minnesota. I have all of my clients watch it and many of them are surprised by the duties and responsibilities that come with being fiduciary for an incapacitated person.
What do you need to convey title to a piece of real estate that is in your own name only, but your spouse is under conservatorship?
The Minnesota Title Standards require 3 things:
- Certified copy of letters of conservatorship;
- Certified copy of order of probate court authorizing conservator to consent for the incompetent spouse to the deed of the owner;
- Deed executed by owner and consent executed by the conservator by endorsement thereon.
See Minnesota Title Standards I-G-2 and Minn. Stat. 507.04
As a practical matter, this will involve the conservator petitioning the probate court for an Order allowing the conservator to consent to the conveyance. Most courts will do this ex-parte, without a hearing. The attorney should submit a Petition to Consent to Conveyance by Owner Spouse and a proposed Order. However, some courts may require notice to Interested Persons and a hearing. Therefore, the owner spouse should work with the incapacitated spouse’s conservator as soon as he/she plans on listing and selling the real estate, so that a potential sale/closing is not delayed.
For those of you following the case of former ADMI leader Steve Grisham, you will find an update in a recent Star Tribune article by James Schiffer. One of the latest issues is who should pay the attorneys fees incurred by ADMI’s lawyers in investigating all of the ADMI client files to determine whether any other thefts occurred. The Hennepin County Probate Court is expected to issue a decision later this summer on whether the company that provided a bond for ADMI should now have to pay $90,000 of ADMI’s legal fees, which were expended in the investigation surrounding the theft of $100,000 from and ADMI client.
The Minnesota Court of Appeals released an unpublished opinion on February 18, 2014 in the case of In re: Guardianship and Conseservatorship of Wallace Berge, A13-0585.
Berge held that the admission of an emergency room report in a guardianship trial was not prejudicial error, where there was ample other evidence to support the Court’s ultimate conclusion that a limited guardian and conservator was necessary. Although, as the Court noted, the District Court would not have been able to make Findings of Fact as to Berge’s condition at the hospital emergency room without admitting the emergency room report, the Court went on to note that the emergency room report simply corroborated the other testimony that it had admitted and found credible concerning Berge’s condition that entire night (confirming the observations of an officer and a child of Berge’s).
Also of note is the Court’s analysis of whether less restrictive means were possible, in lieu of a guardianship. The court relied upon testimony that Berge would likely not accept outside caregiver services because he had in the past refused them and because he was frugal.