Joseph R. Burcke LLC

222 South Central Ave.
Number 600
St. Louis, MO 63105

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(314) 690-2000

Joseph R. Burcke LLC

The probate court is in existence to provide remedy for individuals who become disabled or die. It allows access to assets that would otherwise be locked up because of disability or death. It’s a completely voluntary process. But, on the other hand, without the use of the process, absent advance planning, you really have no choice but to go to probate court because of the need to access assets for one’s own care, or to unlock the assets so that they can be used by beneficiaries. There are two primary probate court processes. One to handle the event of disability, which is called a guardianship or conservatorship procedure. The other unlocks assets at the death of an owner, which is called a decedent estate administration. Both are commenced with a petition. When a person becomes disabled, a family member submits an application to the probate court to become the guardian of the person and conservator of the person’s estate. Any relative can file, and there can be contesting applications. If there are contesting applications, the court will hold a trial to determine who is best situated to manage the affairs of the disabled person.

Without advanced planning, the first downside in a guardianship or conservatorship proceeding is that if there are contesting applications, the person who is actually appointed may not be the person who the disabled person ever wanted as their guardian or conservator of their assets. Once the conservator and guardian are appointed, the guardian aspect of it appoints the person to make all decisions regarding the disabled individual’s personal well-being. The guardian oversees the disabled person’s health care, physical placement, control of daily activities, and anything else that has to do with the individual’s well-being. On the other hand, the conservator is put in charge of the individual’s assets, but as previously discussed, that control is not unfettered. The person who controls a disabled person’s assets, in probate, is the probate judge, not the conservator. The probate court’s view is that the purpose of the assets is to primarily provide for the care of the individual, not necessarily other members of the family. Therefore, decisions about expenditures are left to the discretion of a probate judge. A probate judge is normally concerned with the view that the assets have to be preserved to last the disabled person’s entire lifetime to provide necessities of life.

Although a conservator may feel that a certain expenditure would benefit the disabled person, the probate judge may not agree because their view is to stretch the assets as long as possible. So, the family loses control. Additionally, in a conservatorship, once the conservator is appointed, he or she has to report to the probate court every year on the anniversary date of his or her appointment. Every penny that’s come in and every penny that’s gone out of the conservatorship is audited by probate court staff. It’s audited to ensure that the numbers add up. It’s also audited for court compliance. If money that wasn’t pre-approved by the probate judge was spent, the conservator has to file a petition for ratification. A petition for ratification gives the conservator the chance to go before the court and say, “Okay, I didn’t get permission, but it was a good expenditure. So, approve it, even though you didn’t pre-approve it.” If the judge agrees, then the expenditure is ratified, and you go on down life’s road.

However, if the court doesn’t agree and doesn’t ratify the expenditure, the conservator has to repay the conservatorship out of his or her own pocket. Now, that also raises another aspect that hasn’t previously been discussed. In order to secure his or her appointment, a conservator has to post a surety bond in the value of the property on the conservatorship. The purpose of that bond is to protect the disabled person from unauthorized expenditure or theft by the conservator. This creates a different problem, which is that the applicant must be able to qualify for the bond. The applicant has to have a good job and a good credit rating. They cannot be a convicted felon. Unfortunately, often a nondisabled spouse who’s a homemaker can’t qualify for the bond, and therefore, cannot be appointed as conservator. This becomes a major problem for families.

Once a person becomes a conservator, they are appointed until either one or two events happen. The disabled person becomes able bodied or dies. There are fees every year, there is court supervision every year, and there’s loss of control every year. That’s the problem with conservatorship administration in probate court.

The first issue confronted in decedent estate administration is whether there is or isn’t a will in place. If there is a will, the appointment of the personal representative or executor is a foregone conclusion, and the deceased person gets the person he or she wanted to administer his or her estate. However, if there is no planning, there can be competing applicants. Again, it will be up to the probate court to decide who becomes the personal representative.

Assuming that there is no planning, there is a set of laws in every state called the intestacy code that determines who will inherit at the end of the probate administration. The problem with the intestacy code is that it yields results that often are not what that person would have wanted to happen. For example, if you’re married, especially is a first marriage, most people would assume that the person who would inherit would be the spouse. But, in Missouri, if there are children, the spouse gets a portion and the children get a portion.

Another problem with probate is that even though a surviving spouse is the parent of minor children, that doesn’t give the parent control of their children’s inherited assets. In intestacy code administration, in order for children under 18 to inherit, conservatorships have to be created to hold the assets for the child. Children under 18 suffer from a ‘disability’, which is their minority. Under the law, since children are minor, they can’t contract nor hold private assets. As a result, everything that applies to conservatorships with disabled people also applies to children who are entitled to inherit under the intestacy code. The bigger problem isn’t the cost and aggravation of conservatorship. It’s the fact that when children reach the age 18, they’re no longer minors. Their disability ceases to exist, and they then become entitled to receive their inheritance with no strings attached. Most people tend to believe that seniors in high school are not particularly well equipped to handle an inheritance of any substantial value. Nonetheless, some inherit tens of thousands of dollars, even a million dollars, with no strings attached. That’s the result of a lack of planning in the probate court process.

The administration is about a year. If it is an intestacy probate, as we’ve already noted, there can be contested appointments for personal representative, and, much like in a conservatorship, the court will control the administration of the assets for about a year. At the end of the probate process, there is an accounting where you have to account for every penny in and every penny out. Ultimately, there is an order of distribution, which will allow the assets to be distributed according to the law of the intestacy code. Those are the problems of probate court, both in conservatorship and decedent estate administration. In comparison to trusts, the successor trustee has complete control of the assets as soon as a death certificate is procured. The trustee has free reign within the confines of the terms of the trust to immediately administer benefits for the beneficiaries of the trust.

Why do I need an experienced estate planning attorney such as yourself? Can people try and do this themselves?

First of all, one should consult with an estate planning attorney, not just any attorney. Not all attorneys know how to properly draft a trust or estate plan. You wouldn’t ask your internist to perform major surgery. In similar fashion it makes no sense to ask the attorney who fixed a traffic ticket or represented you in an auto collision to handle the complex considerations of planning your estate because is a complex matter and should not be entrusted to an attorney who does not have every day working knowledge of the process.

Nowadays, many people think that they can go online and create viable documents. The problem is that when an individual goes online to try to create his or her own documents, it will most likely be the first time that they’ve ever created such documents. It’s not that it can’t be done by an individual, it’s that a well-established estate planning attorney has created hundreds or thousands of plans and administered them. An experienced estate planning attorney knows from first-hand experience the problems that arise in regard to potential litigation in the form of challenges to the validity of the documents. Also, an estate planning attorney has vast experience in determining the best way to structure an estate plan in accordance with the particular specific situations of each particular client.

Look at it this way. You could try to build your own house and maybe do it quite well the first time. But there are many components to it. You have to be well-skilled in each component in order to successfully build a good house. An estate plan is no different. You have to be aware of the law as is applicable to situations arising with disability. You have to understand what the court processes are for probate. You have to understand what the economic processes are in real life. You have to understand the problems that arise in administering assets for the benefit of another. You have to understand the competing interests of beneficiaries, and how to best solve those competing interests to minimize family conflict. You have to know how to best secure economic benefits for children, spouses, and others. You have to understand what the income and estate tax laws are, particularly with respect to qualified retirement benefits, such as IRAs, 401ks, and the like. If you don’t understand the income tax laws, you can cost your heirs a small fortune in tax costs.

There are a lot of complex and often conflicting considerations that have to be thought-out in order to craft a well-adjusted plan. Much like building a house, you have to understand plumbing, carpentry, basic engineering, and a host of other things. Can you get it right the first time on your own? It’s certainly possible, but what are the odds that you’ll do it well? Remember, we’re talking about everything you’ve worked your whole life to attain for the benefit of you and your family. Do you really want to save a couple bucks and risk not being able to properly secure the maximum benefit for yourself and your family in the event of a disastrous occurrence? Or, do you want to spend a little money with the idea that you can maximize your wealth value to protect yourself and your family members? I suggest that it benefits your economic well-being and emotional well-being to entrust the care and administration of everything that you own to a well experienced estate planning attorney. That’s why I recommend that clients or prospective clients consult with a well-established knowledgeable estate planning attorney.

For more information on Estate Planning, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (314) 690-2000 today.

Joseph R. Burcke, Esq.

Call For A Free Assessment Of Your Needs
(314) 690-2000

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