- Greetings
- Wills Project
- New Probate Rule 334
- Nomenclature Changes
- Nominating Committee Report
- Luncheon Program Series
- Recent Court Decisions
- Comments, Notes and Announcements
- New Information for the Office of the Register of Wills
- Section Steering and Standing Committees
Greetings From the Steering Committee Co-Chairs
The year 2007 was a year of change—the introduction of Judge Winston as the new deputy presiding judge, the promotion of Judge Burgess to presiding judge, the appointment of Anne Meister as the new Register of Wills, and the movement of the Probate Division and the judges' courtrooms to the new building at 515 Fifth Street, NW!
Of course the beginning of a New Year does not mean an end to changes. New procedures have been implemented in the Probate Division to help streamline the processing of documents filed with the court. In most cases, case jackets do not need to retrieved prior to seeing a deputy in the Office of the Register of Wills because files are now scanned and are electronically available on the computer. A duty deputy dedicated to reviewing most routine filings, such as verifications and certificates of completion, is now available from 9:00 am to 1:00 pm and from 2:00 pm to 5:00 pm every day, Monday through Friday. Also, as part of the Probate Division’s modernization, computers are to be installed in the two courtrooms.
The Register of Wills is currently reviewing “old” administration cases—those filed more than three years ago. Practitioners are urged to close these files, if possible.
Practitioners are reminded that effective September 4, 2007, the new SCR Probate 334 applies to the termination of conservatorships. In the case of termination due to the death of a ward, the new rule applies only to wards who died on or after the effective date. Rules 330 and 331 dealing with, respectively, accounts and audits of accounts have also been amended.
We wish everyone a successful 2008!
Morris Klein and Anne Meister, steering committee cochairs
Wills Project Offers Glimpse Into the Lives of Famous Washingtonians
An exhibit of famous Washingtonians will grace the halls of the Office of the Register of Wills located at 515 Fifth Street, Northwest. The exhibit of thirteen wills is designed to provide information about historical figures and insights into the laws at the time the wills were drafted. The wills of former Presidents James Madison, James Monroe, Franklin Pierce, Grover Cleveland, and Woodrow Wilson, First Ladies Julia Dent Grant and Dolly Madison, as well as those of Frederick Douglass, Daniel Webster, Alexander Graham Bell, Oliver Wendell Holmes, Euphemia Lofton Haynes, and Edwin Stanton will be displayed. Educational and legal organizations are encouraged to visit the exhibit. For further information, please contact Iris Joynerat (202) 879-9401. The reproduced wills were framed with the financial support of the Estates, Trusts and Probate Law Section as part of our section’s community outreach efforts.
New Probate Rule Governs Termination of Conservatorships
When a ward under a conservatorship dies, the conservator must now file a petition for termination, along with the suggestion of death, pursuant to the new Superior Court Probate Rule 334. The new rule took effect on September 4, 2007. The petition, accompanied by a final account and report, must be filed within 60 days of the date of the ward’s death. Upon approval of the final account, the court will enter an order of termination.The rule further calls for the conservator to file with the petition an Order for the Appointment of a Special Administrator in the event there are assets in need of protection and no other fiduciary has been appointed.
Nomenclature Changes For Designating
Cases and Use of Courtview
The nomenclature for listing case types, designating cases
and use of Courtview has changed in the Probate Division. Please
see the PDF file below for examples of how cases should now be characterized:
This is a one-page, 12.86 KB pdf document
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Nominating Committee Report
The nominating committee, consisting of Catherine Mary Rafferty, chair, Kate Kilberg, Kimberly Martin Turner, Ed Varrone, and Vickey Wright Smith, met several times to develop the slate for the 2008-2011 term.We discussed twenty potential candidates who were identified by committee members, recommended by other section members, self-nominated, or considered last year. After careful consideration of each candidate’s qualifications, the nominating committee selected nine candidates for the slate. Each section member will receive a ballot in May. We thank all who agreed to be considered and encourage everyone to become involved in the work of the steering committee by volunteering for various programs and subcommittees. For more information on volunteer opportunities, please contact one of the steering committee members.
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2007-2008 Lucheon Program Series
The 2007-2008 Estates, Trusts and Probate Law Section Luncheon Series programs are presented at the D.C. Bar Conference Center, 1250 H Street, NW, lower level. The Series programs are listed below:
September 20, 2007: Ethical Issues in Estate Planning: How to Zealously Represent Your Client While Protecting Yourself
Speaker: Mary Ann Mancini
Co-sponsored by the Taxation Section Estate Planning Committee
October 24, 2007:
Real Estate Concerns for the Probate Bar
Speakers: Carol Blumenthal and Elisabeth Zajic
November 15, 2007:
Estate Planning for Domestic Partners
Speakers: Evan Krame and Joseph Kapp
December 20, 2007:
Dealing with Mentally Ill Clients
Speakers: Linda Abramovitz and Patrick Hand
January 17, 2008:
Problems and Solutions Regarding Long Term Care and Assisted Living
Speakers: Judge A. Franklin Burgess, Gail Jernigan, and Sandy Douglas
February 21, 2008:
Planning for Business Succession
Speakers: Nicholas Karambelas, Bonnie Lawless
March 20, 2008:
International and Foreign Administration of Estates
Speakers: Marjorie O’Connell and Leigh Alexandra Basha
April 17, 2008:
Creation and Administration of Special Needs Trusts
Speakers: Morris Klein, John Laster, Kelly Thompson, Yolanda Mazyck
May 15, 2008:
How to Stay Out of Trouble: Ethical Problems, Conflicts of Interest, Practice Standards, Etc.
Speakers: Gene Shipp, Ross Dicker, and Arthur Burger
June 19, 2008:
District of Columbia, Maryland and Virginia Updates
Speakers: Charles Abell, William Davis, and Kimberly Martin Turner
Cosponsored by the Taxation Section Estate Planning Committee
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Recent Court Decisions
Decendents’ Estates:
Muelbauer v. Phalke, Adm. No. 469-05, 135 DWLR 2225, (June 6, 2007) (J. Burgess)
The decedent was survived by two adult children who had received no support from the decedent for the last ten years of his life. The decedent’s will provided that his children were to take nothing from his estate. The personal representative took the position that the prevision in the Will disinheriting the children trumped D. C. Code §19-101.03 (the $10,000 Exempt Property Allowance). The court held that the governing statute did not limit the child beneficiaries of the exempt property allowance to children who are dependent on the testator or to children whom the testator has not disinherited and that the will provision disinheriting the children did not override the statutory exempt property provision.
In Re Estate of Lizzie Wilson, Deceased, Admin. No. 414-00, D.C.App.No. 05-PR-428 135 DWLR 1789 (July 18, 2007).
The decedent died in 1990 and the primary asset of her estate was her residence. The personal representative sought to liquidate the residence but due to a recalcitrant relative who was residing therein, had difficulty obtaining possession. The personal representative retained the appellant to assist her in acquiring possession and signed an agreement to pay the legal fees and personally guaranteed payment of those fees. Appellant, in the normal course of business, provided monthly billing statements to the personal representative but the billing statements were not requests for compensation; they were merely statements of the work performed and the value of the services rendered. After successfully completing the assigned task, the appellant was discharged by the personal representative and sent a check, drawn on the personal representative’s personal funds, not estate funds, in the amount of $6,937.15 stating that it was payment in full for his legal services. Appellant informed the personal representative that he was willing to collect his fee from the estate upon completion of probate but the personal representative insisted that he take the compensation immediately. Appellant then withdrew as counsel. The personal representative included on her final account a request for reimbursement of the attorney fees she had paid to appellant. The trial court entered an order stating that it would approve the final accounting, but took exception to the Appellant’s failure to seek approval from the trial court before accepting compensation for the legal work he performed in the case. The trial court took the position that D. C. Code § 20-751 requires all compensation sought for work done on an estate to be first approved by the trial court, regardless of the actual source of payment. The trial court rejected appellant’s argument that prior court approval was not required because the payment came from the client’s personal funds at the client’s insistence and not from estate assets. The court of appeals affirmed noting that the Probate Reform Act of 1980 does not exempt attorneys from seeking prior court approval for attorneys’ fees merely because the source of compensation is not from the funds of the estate.
Affirmed.
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In Re Estate of Solomon Brown, Deceased, Admin. No. 1374-03, D.C.App.No. 06-PR-435 135 DWLR 2509 (August 23, 2007).
The decedent died intestate with one major asset, a townhouse. A daughter was appointed unsupervised personal representative of the estate. The attorney retained by the personal representative was also a licensed real estate broker and the sole owner of a real estate firm. The personal representative and the attorney entered into an agreement in which the attorney’s real estate firm would list and market the townhouse under an arrangement which would earn the real estate firm a 3% commission in return for an exclusive listing. The townhouse was subsequently sold for $300,000 earning the real estate firm a $9,000 sales commission. The personal representative had not received consent to the sale of the property from the other heirs before the townhouse was sold. Shortly thereafter the purchasers again listed the property for sale and quickly sold it for $730,000. Two of the heirs objected to the final accounting which sought compensation in the amount of $6,250 for the personal representative and $9,692.72 for the attorney, alleging that the townhouse had been sold without their knowledge and for a price based on an appraisal more than one year old. The trial court found that the personal representative had breached her duty by not marketing the property in a prudent manner, including her use of a year old appraisal and forgoing use of the multiple listing service. The personal representative was ordered to repay the estate $75,000. The court also found that the conduct of the attorney was marked by a conflict of interest between her roles as attorney and realtor and concluded that an equitable sanction should be imposed against her. The court ordered that the commission paid her real estate firm be disgorged from her business and returned to the estate by way of an offset against the attorney’s fees. The court of appeals upheld the finding of the trial court that the attorney had not met her burden of proof in justifying the transaction in the multi-conditioned way prescribed by Rule 1.8(a) and that the sale of the townhouse by the attorney’s real estate firm was tainted by a conflict of interest but found that the trial court erred in the remedy exacted from the attorney.
Reversed and Remanded for Further Proceedings.
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In Re Karen L. Dodds, Admin No. 998-07, 135 DWLR 2889 (October 15, 2007) (Judge Wertheim).
The petitioner filed a petition for the Abbreviated Probate of the estate of the decedent, alleging that the decedent died intestate in a plane crash. Only debris from the plane had been recovered The court denied the petition without prejudice absent any direct evidence of the decedent’s death or for reconsideration after an evidentiary hearing or re-submission accompanied by affidavits and certified documents establishing the pertinent facts.
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In Re Estate of Elizabeth J. Nowlan, Deceased, Admin. No. 277-06, (J. Burgess) (November 16, 2007).
The decedent, Nowlan, maintained a bank account on which St. Alban’s Church was the designated POD beneficiary. St. Alban’s Church was also the sole beneficiary named in her Will. As her health deteriorated she sought the assistance of her friend, Stotlemyer, in paying her bills and telling her which bills had to be paid. When Nowlan lost her checkbook, Stotlemyer drove her to the bank to get a new checkbook. In meeting with the bank officer to request new checks, Nowlan asked the officer to close the account, open a new account, and put Stotlemyer’s name on it for check-writing purposes. She did not ask the officer to create an account so Stotlemyer would have the funds upon Nowlan’s death. The notes of the bank officer indicated that Nowlan requested “. . .Stotlemyer be added to the account for check-writing purposes only. POD stays the same.” The bank officer believed that Nowlan could establish a POD joint account; D. C. law does not permit a joint account with a POD designation.. The court found that Nowlan signed the Customer Access Agreement and was given the Deposit Agreement which evidenced a contract of deposit between Nowlan and the bank. Since Nowlan created the account to allow Stotlemyer to write checks on it, and the documents entered into evidence reflected that intent, the account Nowlan opened was a “multiple-party” account. However, neither the Customer Access Agreement nor the Deposit Agreement was substantially in the form provided by D. C. Code § 19-602.04(a). Had the bank officer created a multiple party account with a right of survivorship and a POD designation for St. Alban’s Church, Stotlemyer, not St. Alban’s Church, would have received the money at Nowlan’s death and St. Alban’s could have gotten the money only on Stotlemyer’s death. D. C. Code § 19-602.12(b)(1). The court found by clear and convincing evidence that Nowlan intended St. Alban’s Church to remain the party to whom her funds should go when she died and that the bank officer made a mistake when she created an account that did not reflect that intent. Since neither the Customer Access Agreement nor the Deposit Agreement was substantially in the form provided by D. C. Code § 19-602.04(a), D. C. Code § 19-602.04(b) provides that the contract of deposit shall be governed by the code provisions applicable to the type of account that most nearly conforms to the depositor’s intent. The court found that the type of account that most nearly conformed to Nowlan’s intent was the multiple-party account “without a right of survivorship” and concluded that the funds in the account at death belonged to her estate.
In Re Estate of Mable G. Mills, Deceased, Admin. No. 443-04, (J. Burgess) (December 4, 2007).
The personal representative of the Estate sought to delay distribution to a beneficiary of the estate pending the outcome of litigation she had initiated against the beneficiary to recover funds she alleged were owed to the estate. The court acknowledged that equitable principles generally applicable to personal representatives include the equitable right of retainer i.e. “ the moral and legal obligation of the debtor to pay his debt to the estate before participating in its distribution” but in the instant case the personal representative had established neither an obligation due nor the amount of any such obligation. Only a verified complaint had been filed and the beneficiary had filed an answer denying the allegations made therein. The court ordered the personal representative to distribute to the beneficiary his share of the estate.
William E. Davis, case editor
NOTE: The Editor wishes to thank the Judges assigned to the Probate Division and members of
the Probate Bar for making cases available for inclusion in this edition of Recent Court Decisions.
Comments, Notes and Announcements
Pooled Special Needs Trusts
By Evan J. Krame,
Law Offices of Evan J. Krame, Rockville, Maryland © 2008
Pooled special needs trusts offer an opportunity for persons with disabilities to secure resources toward improved financial freedom. Persons with disabilities may be entitled to public benefits if they meet the definition of a disabled person under the Social Security Act. When a person receiving SSI or Medicaid then receives an inheritance or recovery in a tort case, he or she may lose public benefits if the inheritance or recovery is deemed available to them. Special needs trusts, and pooled special needs trusts in particular, can receive funds on behalf of a person with disabilities, and apply those funds for the person’s benefit, without rendering him or her ineligible for public benefits.
Why would a beneficiary look to a pooled trust rather than create his or her own special needs trust? The most common factors dictating the creation of a separate trust versus participation in the pooled trust typically include the amount of the assets, the need to select a trustee, and the costs of operating a trust. The most common scenario is that a public benefits recipient will be entitled to a recovery or inheritance not typically large enough to warrant the establishment of an individual trust. Pooled trusts have been typically the choice for trust shares of less than one million dollars. Such smaller sums are not attractive enough for most corporate trustees. The pooled trust stands out as a safe, viable option for smaller amounts.
Moreover, there are additional demands upon the trustee of a special needs trust when compared to more common trusts. With a special needs trust, the trustee must be part social worker and part benefits planner in addition to a responsible money manager, investor, and administrator. For example, a special needs trust should not pay for the costs of food or shelter for the beneficiary. To the extent the trust pays for food or shelter, the beneficiary’s SSI payments will be reduced or virtually eliminated. Corporate trustees might not have staff intimately familiar with the SSI and Medicaid rules that govern special needs trusts. It is an extremely important and time consuming responsibility to ensure that the trust disbursements improve the beneficiary’s quality of life while not interfering with means-tested benefits. In addition, families may not know someone who is willing to serve as trustee. Pooled special needs trusts offer knowledgeable staff who are eager to assist. When the family does have an individual in mind to serve as trustee, they should remember that an individual can die, move away, or become disabled. A pooled special needs trust does not rely upon just one person.
The beneficiaries of special needs trusts are often more demanding of the trustee’s time and attention. Developmental disabilities or physical disabilities notwithstanding, the beneficiaries of special needs trusts have needs and desires that must be communicated, addressed, negotiated and acted upon. Dedicated and empathetic professional staff to manage the special needs trust is critically important.
The costs of establishing an individual special needs trust will generally eclipse the minimal fees to participate in a pooled special needs trust. The trust document governing the pooled special needs trust will likely have been drafted by attorneys with expertise in this field of law. It is also likely that public agencies will be familiar with or have reviewed the trust document for compliance purposes.
There is a crucial difference between third party trusts and other pooled special needs trusts. The difference between them is the treatment of the balance remaining in the sub share upon the death of the beneficiary. There are no requirements governing the payment of the balance of the third party trust remaining at the beneficiary’s death. However, in the pooled special needs trust, remaining funds will be applied toward the repayment of any outstanding Medicaid lien held by the government for services and goods provided to the beneficiary. There is no statutory requirement that all of the remaining balance be used to repay the Medicaid lien. Accordingly, there is generally a split between the repayment of any Medicaid lien the government has and retention of the balance by the non-profit trustee of the pooled trust. Most pooled special needs trust have adopted a policy of paying the Medicaid lien to the government only up to the value of one-half of the remaining balance of the sub-account. The trust programs use the funds retained to continue providing services to other beneficiaries, either to operate the program or to assist other beneficiaries whose funds have been depleted.
The disadvantages of a pooled special needs trust are few. The family members may be concerned about the loss of direct control over trust disbursements and investments. However, the family should be reassured by the competence and diligence of the pooled trust staff. Funds remaining in the pooled trust at the beneficiary’s death will generally not revert or pass to the surviving family members. This may be the price paid for protecting those assets so that the beneficiary remains eligible for valuable public benefits. Additionally, there are no enforceable operating standards imposed by the federal and state governments on pooled trusts. There is no certification process or accreditation process for pooled trusts. There are also no guarantees that the federal benefits laws won’t change.
In the District of Columbia and Maryland, we are served by the Wesley Vinner Memorial Trust, a pooled special needs trust operated by Shared Horizons, Inc., a not for profit corporation in the District of Columbia. The Vinner Trust enables families and persons with disabilities to establish relatively inexpensive and effective trust accounts that provide supplemental funds for the person with a disability while protecting him or her from losing important government benefits. The board of directors is comprised of dedicated professionals and community representatives. Among the directors are public benefits advocates, lawyers, insurance agents, and marketing consultants.
In order to participate, the beneficiary or his or her family signs a joinder agreement setting up a sub-account. In some cases, a court order will be required to establish the sub-account. Examples are recoveries in a tort case by a person whose incapacity prohibits them from receiving and managing the recovery. If the plaintiff does not have a guardian, the pooled special needs trust offers a safe and efficient way to receive the recovery.
The trust staff will address requests made for disbursements and maintain records of the disbursements. A disbursement request may come from the beneficiary, or from a designated representative who is typically an immediate family member. The disbursement must be primarily for the benefit of the beneficiary. If a disbursement request will have an adverse impact upon the beneficiary, the trust administration staff will advise the beneficiary and may choose to deny the request.
The staff and board of directors of Shared Horizons, serving as trustee of the Vinner trust, are frequently challenged by beneficiary requests. There is a desire to preserve the balance so as to provide goods and services to a beneficiary over a longer period of time. There is an equal desire to have a positive impact and enhance the beneficiary’s current situation. In one recent case, the beneficiary had an opportunity to fulfill a life-long dream of vacationing in Hawaii. The cost of the trip nearly depleted the beneficiary’s sub-account which was of concern to all. The determination was made that the beneficiary should have the opportunity to make this trip. The utter joy experienced was beyond measure as the trust enabled one man to have the vacation of a lifetime.
Pooled trusts permit a wide variety of people with disabilities to benefit from the protection and management of their funds without causing a disruption of vital public benefits. Pooled trust programs provide a convenient and economical way to have the trust funds administered for people with disabilities that will supplement the benefits offered by entitlement programs.
Persons interested in the Wesley Vinner Memorial Trust should contact Yolanda Mazyck, the executive director of Shared Horizons at (202) 448-1460 or visit the website at www.shared-horizons.org. The author is also the current President of Shared Horizons.
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New Location, Telephone Numbers for Office of the Register of Wills
The Office of the Register of Wills relocated to 515 Fifth Street, NW, Washington, DC (Building A) in July of 2007. The office is located on the third floor. Listed below is a directory of numbers:
Office of the Register of Wills
Main number: (202) 879-4800
Duty deputy: (202) 879-9448
Probate Operations Branch
Small Estates section: (202) 879-9409
Decendents' Estates section: (202) 879-9409
Herbert Files, supervisor: (202) 879-9412
Interventions and Trusts Branch
Carmen Aponte-Ayala, supervisor: (202) 879-9421
Auditing and Appraisals Branch
P. Allen Butler, III, branch manager: (202) 879-9429
Mary E. Simon-Ford, deputy clerk III: (202) 879-9430
Alicia A. Purkapile, supervisory auditor: (202) 879-9431
Vandell B. Swann, appraiser: (202) 879-9445
Duty auditor: (202) 879-9447
Order desk: (202) 879-9460/61
Estates, Trusts and Probate Law Section Steering Committee and Standing Committee
The 2007-2008 Estates, Trusts and Probate section steering committee members are Anne Meister, cochair; Morris Klein, cochair, Elder Law, and Legislation; Kimberly Edley, Secretary and Newsletter; Kate Kilberg, Digest and Public Statements; Paul Pearlstein, Luncheon Series Programming, CLE Coordinator and Internet Coordinator; Catherine Mary Rafferty, Finance, Nominating, and cochair elect; Andrea Sloan, Luncheon Series Programming, Guardianship/Conservatorship issues; Kimberly Martin Turner, Digest and Newsletter; and Edward Varrone, Pro Bono liaison, DC Practice Manual, and Judicial Reception. The standing committee chairs are William E. Davis, case editor and Archie L. Palmore, community outreach.
If you have questions or comments, or wish to write an article for an upcoming newsletter, please contact either Kimberly Edley, newsletter editor, or Kimberly Martin Turner, assistant newsletter editor.
