Arizona Senior Law » Probate & Estate Planning

Personal representatives must take caution to avoid conflicts of interest

rwhite — Mon, 22 Mar 2010 15:00:08 +0000

Personal representatives have a fiduciary duty to act in the best interest of the estate they are appointed to administer. This fiduciary duty prohibits personal representatives from acting to advance their own interests. However, many times those appointed as personal representatives are also situated to inherit a portion of the decedent’s estate. Because these situations are inherently susceptible to conflicts of interest, Arizona has passed specific legislation with instructions on how to approach them.

Conflicts of interest include any sale or encumbrance to the personal representative, his spouse, agent or attorney, or any corporation or trust in which he has a substantial beneficial interest, or any transaction which is affected by a substantial conflict of interest on the part of the personal representative. A.R.S. §14-3713.

Where a personal representative enters into a transaction that creates a conflict of interest, any person with an interest in the estate can petition to have the transaction voided. There are some exceptions to this general rule, however. Transactions cannot be voided for conflict of interest where:

The person seeking to have the transaction voided consented to the transaction after fair disclosure.
The Will expressly authorizes the transaction.
A contract entered into by the decedent authorizes the transaction.
The personal representative gave notice to interested persons and received approval by the court.

Personal representatives, then, are generally prohibited from acting in their own interest when administering a probate estate. However, they are permitted to act in accordance with the Will, even if it promotes their self-interest. Where the Will does not give express permission, personal representatives may still be able to enter into certain transactions by obtaining the approval of the court and providing adequate notice to interested parties.

None of this should be handled without the assistance of legal counsel. When entering into transactions that create the appearance of a conflict of interest, personal representatives should seek legal assurance that their efforts will be upheld. An Arizona probate attorney is best qualified to assist in this manner. For a consultation with a probate attorney at JacksonWhite, please call (480) 464-1111 and ask speak to someone in the Elder Law department.

Adding an owner to a bank account can have serious repercussions

rwhite — Tue, 02 Mar 2010 21:34:15 +0000

A bank account owned jointly by two owners is not required to pass through probate when one of the owners dies. Rather, the bank account passes outside of the probate process, and the surviving owner immediately takes full title to the account. Many times, people add a joint owner to their bank account expressly for the purpose of avoiding probate. However, there are also those who add a joint owner to their account without fully understanding the legal repercussions of doing so.

A person who titles a bank account in joint ownership ultimately loses the ability to bequest the account through a will. Even where a will provision specifically mentions a bank account, it may not pass to the beneficiary if the account is titled jointly. This means that people should be extremely cautious when adding a joint owner to a bank account. People many times inadvertently make permanent estate planning decisions in the name of adding a loved one to their bank account for the sake of expediency.

The truth is that joint ownership can be a very important and useful tool when it comes to creative estate planning. However, there are serious implications when adding a joint owner to your bank account. The possibility is here to inadvertently disinherit your loved ones in this manner. It may be prudent to consult with your estate planning attorney when making changes to how your finances are arranged. Making important and lasting decisions without qualified legal counsel can create problems that could easily have been avoided. For a consultation with an attorney at JacksonWhite, please call (480) 464-1111 and ask speak to someone in the Elder Law department.

Upcoming Presentation at Rose Court Senior Living

tgranado — Wed, 27 May 2009 14:55:13 +0000

Please join us for a Pancake Breakfast and a Presentation on Advanced Directives, Guardianships & Conservatorships, and Wills given by Tammy Jo Granado, Elder Care Coordinator of Jackson White, Attorneys at Law.

Time: 8:00am-9:30am
Date: Thursday, May 28, 2009
Place: Rose Court Senior Living (Thomas & 18th Place – behind the Heart Hospital)
2935 N. 18th Place, Phoenix, 85016
RSVP by phone: 602.265.9813, Jackqueline Sutnick

HOPE TO SEE YOU!

Are You Tuned In?

kburns — Fri, 21 Nov 2008 16:56:44 +0000

I was recently introduced to a great resource for anyone dealing with end of life issues and just planning ahead. Hospice of Arizona hosts a weekly radio show on Mondays at 3pm. Tune in to 1100AM KFNX to listen to Marsha Hall and Judy Peters as they host, “We’re There for You.” For those who think it’s just an hour about hospice services, think again. They touch on topics such as advanced directives, financial planning, as well as Elder Law/Care. They offer a relaxed environment for listeners to call in if they wish. If you decide to become a listener, you may even hear some familiar voices from the Law Firm of Jackson White!

My House Is Not Selling!

emacdonald — Fri, 05 Sep 2008 17:53:40 +0000

In the past twelve months, the housing market seems to have slowed to a grinding halt. This has caused more concerns than normal for clients in need of long-term care. With assets and pensions funds diminishing with the falling market and houses not selling, more and more clients are in need of turning to Medicaid/ALTCS to help with covering their long-term costs.

In Arizona, an individual is allowed to keep a house valued at less than $500,000 and still qualify for ALTCS. At first glance, this seems like good news. Indeed, if done appropriately, one can apply for ALTCS and secure long-term care benefits even though one has a home of substantial value!

One must always remember that ALTCS is keeping tally of the costs it is expending upon an applicant/recipient of the ALTCS program. Because most on ALTCS have less than $2,000, there is not much chance that ALTCS will ever recover its costs-unless there is a house. If the house exists, you can be assured that ALTCS is keenly aware of it.

There are various ways that ALTCS attempts to collect from houses, and it is constantly seeking to expand its options. The most common approach is for ALTCS to recover from the probated estate. This approach has probably not born the fruit that ALTCS has desired, but often it is ALTCS’ only option. A more secure approach for ALTCS is to place a TEFRA lien on the property. This approach allows ALTCS to attain recovery when the house sales, but ALTCS is not allowed to use it in all circumstances. In either event, one should consult with an Elder Law Attorney to understand one’s rights and options with regard to their houses.