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2018 Probate and Trust Legislation Update

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The process of transferring property from a deceased person to his or her beneficiaries is governed by Arizona statutes.  Although the general procedures in Arizona are similar to those in most other states because of the adoption of the Uniform Probate Code and the Uniform Trust Code, most states make their own tweaks and changes.

Senate Bill 1204 was introduced to the 2018 Arizona 53rd Legislature, 2nd Regular Session, to address several issues affecting probate and trust administration and to make some changes to Arizona’s version of the uniform laws.  The Bill was passed by both houses of the legislature and signed by the Governor, meaning the changes will become law effective August 3, 2018.  Here are some of the key revisions affecting the Arizona Probate and Trust Codes.

Arizona Probate Code Changes

Arizona Revised Statute (“A.R.S.”) § 14-2517 has dealt with the enforceability of penalty clauses in wills, commonly called “no contest” clauses and less commonly called “in terrorem” clauses.  This statute states that such clauses are not enforceable if the beneficiary bringing the challenge had “probable cause” to bring the challenge.  The Bill clarifies the challenge can come as a “contest, proceeding or action.”

The Bill also clarifies which rules are applicable to probate proceedings.  Over the past several years, the Arizona Supreme Court has established and amended the various rules that had been created by various county Superior Courts into a statewide Arizona Rules of Probate Procedure.  Accordingly, the amended A.R.S. § 14-1304 states that the Arizona Rules of Probate Procedure now apply to all probate matters.

Arizona has three methods to implement the terms of a decedent’s will.  The first is a summary administration for certain enumerated small estates.  The second is known as informal probate and, if certain requirements are satisfied, allows a matter to proceed without the involvement of a judicial officer.  Finally, there is the formal probate proceeding which involves a judge because of special circumstances or contests.  Because no hearing is mandated in informal proceedings, A.R.S. § 14-3306 does not require notice prior to beginning the process.  However, after the application has been accepted by the court, notice of the proceeding must be given to heirs or devisees.  The Bill clarifies the timing and to whom notice is given in informal probates.  If you want to learn more about the different types of probate in Arizona, watch our video.

The Bill made one major change to A.R.S. § 14-3403 which applies to a notice of hearing on the petition for a formal proceeding.  Previously, the statute required the publication of the notice one time at least fourteen days prior to the hearing.  This requirement was to notify “unknown” persons of the court proceedings. [Read more…]

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Can I have a witness?

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Mesa, AZ Probate Dispute | Probate Dispute Attorney | Berk Law Group, PCArizona’s Revised Statutes (A.R.S.) set out the standards that must be met in order to create a last will and testament. Options include a handwritten or holographic will and a properly witnessed prepared will.

A.R.S. § 14-2502(A)(3) requires that, in the second case, a will be signed by the testator (maker of the will) and be “[s]igned by at least two people, each of whom signed within a reasonable time after that person witnessed either the signing of the will or the testator’s acknowledgment of that signature or acknowledgment of the will.” But who is a proper witness?

Most Arizona attorneys will ensure a proper execution occurs by having two witnesses present along with a notary public. This results in what is called a “self-proving” will. But what happens if there is only one witness signature along with a notary? This is the background in a recent Arizona Court of Appeals decision entitled “In re Estate of Bradley.”

After Ms. Bradley died, her son, who was not named as a beneficiary in her will, complained that the will was not valid because it lacked the signature of two witness. If the will was not valid, the son would stand to inherit.

At a hearing on the petition to probate the will, both the person who signed as witness and the Notary Public testified that they were present and witnessed Ms. Bradley sign the will. The son argued that because the notary was there to “notarize” she did not count as a “witness.” The Court of Appeals disagreed. The Arizona statute does not place any such limitation on who is a proper witness, just that two individuals are either present to see or are told by the signer that she signed. That is what happened here and the court accepted the notary as the second witness.

Proper execution of any legal document is important.   Improper execution of a will or trust is one of the reasons people end up in court. Proper review and overview by an attorney can often prevent expensive and time-consuming litigation. The attorneys at Berk Law Group can review your documents for proper execution and avoid costly headaches later.  And, if you end up court, our attorneys can help you try to resolve the matter as efficiently as possible.  Please contact us if you have any questions.

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Arizona Supreme Court Reverses Itself – Makes Elder Abuse Claims Easier

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Vulnerable Adult Litigation

Elder Law

Elder financial exploitation, abuse, neglect are growing concerns in society today, with baby boomers reaching an advanced age and requiring more medical care and financial assistance.  According to the National Council on Aging, “approximately 1 in 10 Americans aged 60+ have experienced some form of elder abuse. Some estimates range as high as 5 million elders who are abused each year. One study estimated that only 1 in 14 cases of abuse are reported to authorities.”  Elder abuse, neglect and financial exploitation are obviously huge problems.

Arizona enacted the Adult Protective Services Act (APSA) in 1988 to provide broad remedies to protect victims of elder abuse, neglect and financial exploitation.  APSA does not only protect the elderly; the statute provides protection for any “vulnerable adult.” A vulnerable adult is any person, age 18 or older, who cannot protect him- or herself from “abuse, neglect or exploitation by others because of a physical or mental impairment.”  APSA also provides for enterprise liability, meaning that the facility where the abuse occurs may also be held liable.  Learn more about elder law claims.

In 2002, the Arizona Supreme Court decided the case of the Estate of McGill v. Albrecht to determine under what circumstances victims of elder abuse and neglect (or their estates) can recover under APSA.  There, Norma McGill had an extended history of psychiatric illness and had been placed in various behavioral health facilities for about 30 years.  Norma died at age 64.  Her death certificate showed that she died from, among other things, neurotoxicity secondary to medications – in other words, she overdosed.  Her estate and family brought APSA and other claims against various of Norma’s providers.  The trial court judge dismissed the APSA claim, finding that it “was based on Defendants’ malpractice in caring for Ms. McGill and that something more than malpractice must be shown to establish an APSA claim.”

In its ruling, the Supreme Court held that, for abuse to be actionable under APSA, the act(s) must have: (1) arisen from the relationship of recipient and caregiver, (2) been closely connected to that recipient and caregiver relationship, (3) been linked to the service provided by the caregiver due to the recipient’s incapacity, and (4) been related to the problem(s) that caused the person’s incapacity.  This ruling did not supply a broad remedy of recovery that the legislature intended in adopting APSA; rather, it strictly narrowed the circumstances under which a victim could recover under APSA.  This ruling made it more difficult, if not impossible in some instances, for victims to pursue claims under APSA, rendering the purpose of the Act (to supply broad remedies) almost meaningless.  In its decision, the Court noted the difficulty in applying its formula: “we are well aware that this formulation does not provide an easy, bright-line test for judges and juries. But we believe it best serves the purposes of the legislation and addresses the problems the legislature sought to correct.”

However, in June 2017, the Arizona Supreme Court made a surprising ruling in Delgado v. Manor Care of Tucson AZ, LLC when it reversed its prior decision in Estate of McGill.

Delgado arose from the death of Sandra Shaw.  At the time, she was a patient at a skilled nursing facility in Tucson and had several serious medical conditions, such as kidney disease, anemia, heart disease and hypertension.  She had recently undergone surgery for a brain tumor.  She needed to use a wheelchair and needed assistance with basic tasks, like walking, bathing, dressing and others.  She was obviously a vulnerable adult as defined in APSA.  Her condition briefly improved at the nursing facility, but it eventually declined and she died of sepsis – a serious infection usually contracted through a wound.

Sandra’s sister and estate brought various claims, including for abuse and neglect under APSA, against the nursing facility, Sandra’s doctor and others.  The trial court applied the McGill four-part test and dismissed the APSA claims, finding that the fourth element was not satisfied because the cause of Sandra’s death, sepsis, “was not related to the conditions that  caused her incapacity.”

In overruling the trial court and reversing its own decision under McGill, the Delgado Court held that, for a claim to be actionable under APSA, it simply requires that a vulnerable adult suffer an injury caused by abuse or neglect from a caregiver.  This ruling is the exact broad remedy originally intended under APSA, allowing a vulnerable adult to file a claim against an abusive caregiver without having to meet other requirements that were needlessly imposed by the Court in McGill.  Now, the standard for victims of abuse or neglect (or their estates) to file a claim under APSA simply requires that the vulnerable adult was abused or neglected by a caregiver.  This decision conforms to public policy, allowing victims and their estates an easier way to seek remedies under APSA.

If you or a loved one are the victim of vulnerable adult abuse, neglect or financial exploitation please contact us to schedule a consultation with one of our experienced attorneys.

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2016 Arizona Probate and Elder Law Legislation Updates

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AZ houseDuring the 2016 State of Arizona Fifty-second Legislature Second Regular Session, the House of Representatives has proposed three bills and the Senate has proposed one bill with proposed amendments to Arizona’s elder laws.  The proposed revisions involve powers of attorney, claims for financial exploitation under Arizona’s Adult Protective Services Act, A.R.S. 46-451 etc. and guardianships.

Powers of Attorney

A.R.S. § 14-5501 sets forth, among other things, the requirements to create a valid durable power of attorney in Arizona.  Basically, a “durable” power of attorney is one that either (a) stays in effect notwithstanding that the principal (the one granting the power) becomes incapacitated or disabled or (b) becomes effective when and if the principal becomes incapacitated or disabled.

Pursuant to A.R.S. § 14-5501(B), the intent to create a durable power of attorney may be expressed by the following or similar language in the power of attorney: [Read more…]

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Financial Exploitation Finding Affirmed by Court of Appeals

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Arizona’s Adult Protective Services Act protects Arizona’s large population of vulnerable adults from abuse, neglect and financial exploitation. The current version of the statute provides that a person who is acting in a position of trust and confidence must use a vulnerable adult’s assets solely for the adult’s benefit.  That statute was recently the subject of an Arizona Court of Appeals’ decision in the Estate of Domingo Rodriguez.

Factual Background

Domingo was an immigrant of Spain and did not speak or write English.  He had three adult children: John Rodriguez, Santiago Rodriguez, and Manuela Graca.  Domingo’s wife died in 2001, whereupon Domingo, then 80 years old, began living with Manuela and her husband, Manuel Graca.  At the time, Domingo had a pacemaker and needed assistance managing his finances.

The Gracas had extensive involvement in Domingo’s care and finances.

Over the next ten years, the Gracas provided all of Domingo’s care: arranged for and transported him to all medical appointments, administered his medications, assisted in all of his social and recreational activities, and cared for his dog. Manuela quit her job in 2001 to care for Domingo, but she eventually returned to work part-time and, later, full-time.

In 2002, they sold Domingo’s house and used some of the proceeds to expand their home to accommodate Domingo and make other renovations.  Later, they sold the home and used the funds to purchase another home.

While Domingo was living with them, the Gracas used funds from Domingo’s savings account, his monthly pension and Social Security to supplement their own income and help with household expenses.  However, importantly, the Gracas did not keep an accounting of their use of Domingo’s funds.

During at least the last two years of his life, Domingo suffered from dementia.  Domingo died in 2012 and John was appointed as personal representative of Domingo’s estate.  John then filed a complaint against the Gracas in which he alleged that they were liable for financial exploitation under Arizona’s Adult Protective Services Act, breached their fiduciary duties to Domingo, converted his money and enriched themselves with his property.  The Gracas denied wrongdoing and counter-sued for the value of the services that they rendered to Domingo as caregivers.

The Superior Court’s Decision

After a one day trial, the superior court found that the Gracas committed financial exploitation in violation of A.R.S. § 46-456 and breached their fiduciary duty to Domingo. The Court ordered the Gracas to pay Domingo’s estate damages in the amount of $15,527.26 and attorneys’ fees of $35,000.  The Gracas then appealed. [Read more…]

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Sadomasochistic Relationship Leads to Exploitation Claims

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What do sex, sadomasochism and financial exploitation have to do with each other?  This is not a joke!  Read more and find out.

In a recent Florida lawsuit, 68-year-old Alex Abrams claims that his sadomasochistic relationship with Judith Gumbrecht, also known as “Goddess Jude,” Goddess Judeallowed her to financially exploit him.  The allegations set forth in the lawsuit against Goddess Jude are intriguing and troubling, perhaps revealing a new method of financial exploitation of the elderly.

The Allegations

In 2011, Alex Abrams, then 63-years-old, divorced his wife of 32 years and was living alone. During this time, Abrams’ lawyers claim that he was suffering from severe clinical depression, an unspecified dementia condition and Alzheimer’s disease.  Abrams also had a history of ADHD and anxiety.  Because of Abrams’ age, medical and mental disabilities, his lawyers argue that Goddess Jude used their sadomasochistic relationship, which began in 2011 after Abrams’ divorce, for the purpose of financially exploiting Abrams.

According to the complaint filed against Gumbrecht in July 2015, she advised Abrams that it was “of the highest honor to be her financial slave.”  As a result, Abrams opened a new joint financial account with Gumbrecht, as well as made her an authorized user on Abrams’ credit card accounts.  Gumbrecht rewarded Abrams for these financial changes with sexual favors, but also threatened to punish him if he did not adhere to her financial instructions and requirements.

As a result of Gumbrecht’s control, Abrams claims that he transferred his Florida home to her via a Warranty Deed.  Gumbrecht also took more than $500,000 of Abrams’ money from his bank and credit card accounts.  Abrams’ attorneys claim that Gumbrecht was well aware of Abrams’ medical and mental health issues, as she attended a doctor’s appointment in which he was diagnosed with Alzheimer’s disease.  Abrams alleges that in violation of Florida Statute §825.103, Gumbrecht exploited Abrams by using her relationship with Abrams to create a relationship of trust and confidence in order to knowingly obtain or use his funds, assets, or property for her benefit.

Much like Arizona’s financial exploitation statute, Florida law defines exploitation as, among other things, “knowingly obtaining or using, or endeavoring to obtain or use, an elderly person’s or disabled adult’s funds, assets, or property with the intent to temporarily or permanently deprive the elderly person or disabled adult of the use, benefit, or possession of the funds, assets, or property, or to benefit someone other than the elderly person or disabled adult, by a person who:  1.  Stands in a position of trust and confidence with the elderly person or disabled adult; or 2.  Has a business relationship with the elderly person or disabled adult.”

In May of 2015, Abrams formally demanded that Gumbrecht promptly return his property or pay for the full value of his property, funds and assets.  Gumbrecht apparently denied this request and, instead, threatened to expose their relationship to his children.

According to Court documents, using her status as a dominatrix, Goddess Jude was able to exploit submissive Alex Abrams, receiving his home and over $500,000.  While a lawyer for Abrams did state that Gumbrecht’s advertisement of “financial slavery” was within the bounds of legality, she went too far by exploiting the elderly man due to his mental and physical condition.

Berk Law Group is Here to Help

Typically, financial exploitation of elderly or disabled adults is committed by a family member, friend or caregiver.  However, a business relationship, such as the sadomasochistic relationship between Abrams and Gumbrecht, can also lead to financial exploitation.  If you believe you or a loved one may be a victim of financial exploitation, or would like to learn more about financial exploitation and elder abuse claims in Arizona, please contact us.

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Do It Yourselfers Beware! – Holographic Will Held Invalid

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When a loved one dies, it is a time of grieving, pain and sorrow.  The grief and sorrow can turn to frustration and even anger when the deceased’s wishes for his estate are not followed.  Sometimes the person’s wishes are not followed because the person did not have testamentary capacity (was of unsound mind) or was unduly influenced.  Other times, the person’s wishes are not followed because those wishes were not properly adopted in a legally enforceable will.  Irrespective of the reason for the question or dispute, it is often helpful to consult with an experienced Arizona probate attorney.

The question in Wagoner v. Aleman, decided by the Arizona Court of Appeals on May 19, 2015, was whether Jeanine Jones’ partially typed and partially hand-written will was valid and enforceable under Arizona probate law.

In that case, Elisa Aleman was Jones’ natural granddaughter.  Elisa’s natural mother died shortly after Elisa was born and Elisa was legally adopted six months later.  Despite the adoption, Jones reconnected with Elisa and they remained close until Jones died on August 31, 2012.

Before she died, Jones prepared what was labeled a “Last Will and Testament” on a computer.  The document provided that Elisa was to inherit 50% of the sale of Jones’ property in Lake Havasu City, Arizona.  Later, Elisa stated that she was present when Jones made handwritten changes to the Will.  The changes reduced Elisa’s share to 25%.  Jones initialed all of the changes, except one that remained basically unchanged from the original document.  Only Jones and a notary signed the document.

After Jones died, her sister opened probate, claiming that Jones died intestate (without a will).  Elisa then filed a petition seeking to admit the typed/handwritten will to probate, whereby she would inherit 25% of the sale proceeds of the Lake Havasu City, Arizona property.  Elisa claimed that the will was a valid holographic will and Jones’ sister objected.  Elisa also argued that even if the will was not valid and Jones died without a will that she was Jones’ heir under Arizona’s intestatcy laws, such that Elisa was entitled to Jones’ estate.

[Read more…]

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Lou Reed Leaves $30 million—and Only a Will

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Berk Law Group, P.C. Announcement

Lou ReedLou Reed, famous for 70’s hits like “Walk on the Wild Side,” died on October 27, 2013, leaving behind an estate worth at least $30 million that generated around $20 million in income since he died. Wealth like that is often secured by a complex estate plan, designed to reduce the possibility of disputes and avoid probate and litigation.

Many celebrities spark massive probate litigation after they pass away by either planning too little for someone of their wealth or cutting someone out of the plan who thought they should be included. These cases often end up in trust litigation, since the wealthy often use revocable living trusts and irrevocable trusts as their preferred planning devices.

The strange thing about Lou Reed’s estate plan is that it was solely comprised of a will. According to news reports, Mr. Reed didn’t have even a revocable living trust.

So what’s the result for Mr. Reed’s surviving family members and loved ones? First, the process in probate court (called Surrogacy Court in New York, where Mr. Reed’s estate is being administered) is entirely public. Reporters, jealous members of his extended family, and unscrupulous people all have access to the particulars of Mr. Reed’s estate. [Read more…]

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Probate Challenges and Estate Litigation – Do Wills Always End Up in Court?

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Berk Law Group, P.C. Announcement

Mesa, AZ Probate Dispute | Probate Dispute Attorney | Berk & Moskowitz, PCFor anyone who has heard the estate planning maxim that failing to plan is planning to fail—and for some families the goal of estate planning is probate-avoidance—there still tends to be some confusion about probate litigation.

First, probate and estate litigation are not the same things as estate administration through probate. Probate “means proving (a Last Will and Testament’s) genuineness in probate court. Unless otherwise provided by statute, a will must be admitted to probate before a court will allow the distribution of a decedent’s property to the heirs according to its terms.”

A Last Will and Testament is supposed to reflect the complete and true wishes of someone in their sound mind who sets forth their wishes for property upon death.

When someone’s wishes are disputed, misunderstood, vague, or otherwise argued over, the probate court hears evidence of the person’s intent.

It is at the point where challenges and disagreements interfere with the court’s ability to administer the will that probate challenge and estate litigation occur. [Read more…]

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Mickey Rooney’s Family Accused of Elder Abuse, in Court Following Actor’s Death

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Mickey Rooney Estate Drama | Probate Litigation Attorney | Scottsdale, AZ | Berk & Moskowitz, PCTo a certain generation, Mickey Rooney evokes memories of Hollywood’s golden years, where going to the movies was a happy, music-filled, and glamorous experience. Classic film fans mourned the loss of an icon after hearing news of Rooney’s passing on April 6, 2014.

Quickly following on the heels of this tragic news, however, was word that Rooney’s extended family was openly feuding about everything from who would claim his body to who should lay claim to his somewhat meager estate. News of his final years also included stories of possible elder abuse by those same relatives.

The years before his death seem to have foreshadowed his final decline. Since 2011, he had fought legal and personal battles, struggling to maintain his dignity.  In that year, Rooney and his attorneys filed a financial elder abuse lawsuit against Chris Aber, his wife’s son from a previous marriage, and Aber’s wife. The lawsuit accused the Abers of robbing Rooney of millions of dollars and of elder abuse. [Read more…]

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