On October 3, 2012

We often discuss the importance of estate planning. While most people don’t like to think about their own death, none of us is immortal. But estate planning isn’t just about what happens after you die. If you become incapacitated in some way and can’t make decisions for yourself, you may need to rely on a family member, business partner or someone else you trust to make decisions for you. These could involve your health care, estate or other personal interests.

Even if you have someone you trust and assume will act in your best interest, it’s important to formally establish a power of attorney. If you suddenly need to rely on this person to be your conservator or guardian, nursing homes, banks and other financial institutions will want documentation asserting that formal role. Failure to establish power of attorney can result in long, expensive and sometimes failed legal battles over your own best interests, as the estate of one Colorado Springs man has demonstrated.

The 76-year-old man’s niece, an apparently close relative who was also his goddaughter and visited the man often from her home in California, recently lost a court case over $1 million in commercial and residential properties that he transferred over to her in May 2010. In the months after the transfer, he became ill to the point that his cognitive abilities were affected. Soon afterward, the woman was ordered to return the properties by a court-appointed conservatorship. She refused, and the niece and the conservatorship went to court.

An attorney for the conservatorship accused the niece of exploiting the man, putting money from his bank accounts into accounts under her own name, and coercing him to give her the property. The attorney said the man came to him a few months after the transfer asking to get his property back. Was the demand a result of dementia, or did he simply have a change of heart?

According to the jury in the case, the man was “unduly influenced” by his niece, who was ordered to give back the properties and pay $315 in attorney fees. She and her attorney plan to appeal.

If the man had established a conservatorship from the beginning, the court battle might have been avoided. You may be able to avoid similar ordeals by setting up a plan now, before you lose the ability to make competent decisions about your estate.

Source: Daily Democrat, “Appeal planned in conservatorship lawsuit,” Don Frances, Oct. 2, 2012

· Our law firm handles a wide variety of estate planning and probate litigation issues. To learn more about our practice, please visit our Colorado estate and trust administration page.

Categories: Trustees, Executors & Fiduciaries

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