. . . or is there?
Often, a child or close friend of an elderly person will be granted a power of attorney to help the elder handle her financial affairs. Such power of attorney is usually quite broad, granting the trusted agent the ability to, among other things, sell property, open and close bank accounts, and the like.
Far too common is the case where the trusted person then uses the power of attorney for his own financial gain. Family of the exploited elderly person find out only later (often after her death) about the misdeeds.
Given that the wrongdoer was granted a full power of attorney to do anything they thought proper with the grantor's financial affairs, isn't it impossible to sue the agent for misappropriating money or property, for re-titling assets in the agent's name?
No. In Georgia, as in most other states, an "agent . . . cannot have any interest or do any act adverse to the interest of his principal . . ." Furthermore, "[t]he agent shall not make a personal profit from his principal's property; for all such he is bound to account." First National Bank of Paulding County v. Cooper, 252 Ga. 215, 215 (1984).
If a loved one dies and the family fears he has been exploited through misuse of a power of attorney, what can be done? Foremost, an attorney should be contacted immediately. Placing an injunction on distribution of mis-titled insurance policies and accounts early on can save an estate large sums. A "constructive trust" may likewise be placed over the assets of the wrongdoing agent to ensure the stolen property isn't dissipated before the case comes to trial.
Often, such matters settle early. Faced with the reality of their misdeeds and the plain wording of Georgia law, many power-of-attorney-abusing agents will simply allow the matter to progress without putting up a fight. Even in absence of a settlement, a court showing that an agent did some act contrary to the interests of his principal is not as difficult as - say - showing that a will signer was incompetent, and litigation is often worthwhile for the estate.
Unlike Michael Jackson's, the Huffington Post reports
, the Whitney Houston estate will not make much money from the bump her singles will inevitably get in radio play and record sales due to her untimely death.
But Dolly Parton will.
Parton was the writer of the popular Houston single, "I Will Always Love You," and as such commands a much larger share of the song's royalties than its singer, whose cut, according to the HP article
, is diluted severely by, among other things, recording and promotion costs.
Because Houston never actually wrote her songs, most of her income streams would have been in the form of fees for tours and appearances, which of course cannot now continue.
-----------Tanner Pittman, LLC
is a Georgia law firm that handles probate and administration
of complex estates.
Not infrequent is the case in which an executor of an estate or relative of a decedent begins to parcel out estate property before granted authority by the court.
In a recent case handled by this firm, the son of the decedent began giving furniture and heirlooms to grandchildren long before the will was found and probated. Fortunately for that son, the matter was settled before the son was could be sued for his misdeeds.
Explaining why family members of a deceased do this is not hard: they "know the deceased wishes" or are "just doing what's fair."
In the case of In re Estate of Tarpley, just handed down by the Court of Appeals, the high price of doing this is made manifest. In it, an executrix and sole heir of an estate sold an automobile belonging to the deceased for $12,000 before probate was complete. Later, and after the will was overturned for lack of testamentary capacity, the executrix found herself trying to cover up what was an improper disposition of estate property.
Before the appeal was finished in Tarpley, the executor (since removed from office) owed the estate $96,433.73 in compensatory and punitive damages.
About half of this damages award was overturned on appeal; nevertheless because of the Georgia law regarding executors de son tort, damages in the case of bad actors in estates can be quite harsh.
The full text of the case follows below. Click on the "read more" link.
This firm also publishes content at the lawyer directory and rating site Avvo.com. Most recently, we posted a 16-step guide
to petitioning for year's support in Georgia.
Year's support is the right of every surviving spouse or minor child of a deceased to inherit certain property from the estate, regardless of what is stated in the will. Attorneys have also used year's support as a strategic way of legally avoiding certain debts of the estate, ensuring a maximum tax break on certain real property of the estate, and quickly administering some intestate estates without the need for a full court-supervised administration and all of the complicated steps that can involve. Tanner Pittman, LLC
regularly advises clients and assists with petitions for year's support, year's support litigation
, and other probate and estate matters.
posted an article here
that purports to explain "Why More than Half of Americans Don't have Wills."
Though the predictable (and perhaps question-begging) answer "we procrastinate and don't like to think about death" leaves the reader mildly disappointed, the statistics the article cites make it well worth perusing.
Among other interesting numbers is the survey result that "13% [of people] believe that their spouse and children will automatically receive the assets they have in the event of their deaths."
Experience shows that the above number is perhaps understated. Anecdotal reports from contacts of this firm also yield the disturbing fact that most married individuals believe their spouse will inherit everything
when they die.
Unfortunately, this is entirely untrue. In no U.S. jurisdiction of which we are aware does the spouse automatically take the entire estate. And not only is inheritance not "automatic," but it also does not follow such a simple scheme. In Georgia in particular, the spouse and children share equally in the probate property (with the exception that the spouse never takes less than one third).
Often, the survivor of a married couple with children will find him or herself going through lengthy administration only to inherit a share of his or her own home, such that the house cannot be sold or mortgaged without the consent of mutual children - something that can be a hassle when the children are grown and an outright disaster if they are minors.
With estate planning, as with other areas of law, a little knowledge is a dangerous thing. Wills and inheritance law
is the specialty of Tanner Pittman, LLC
, and we are skilled both in drafting estate plans to our clients' wishes and in explianing them in a way that non-lawyers find accessible.
In the State of Georgia, the statutory doctrine of "year's support" can utterly defeat some estate plans. The problem can be voided by careful planning and the use of a revocable, inter-vivos trust (also known as a "living trust.")What is year's support?
In Georgia, year's support is the right of a surviving spouse or minor child of a decedent to take property from the estate. How much property? That question is not easily answered and is the source of an enormous amount of estate litigation . The technical answer is "an amount sufficient to maintain the standard of living" of the surviving spouse or minor child for one year. Ga. Code Ann. § 53-3-7
It is for the courts to determine how much money or property is needed to accomplish this. Such determinations are costly and time-consuming exercises in litigation and trial work. They typically involve months of preparation and at least one appeal. Furthermore, experience shows that some (typically non-lawyer) probate court judges in Georgia see year's support as a convenient way of administering an estate and will award all
estate property to a petitioning survivor. (Despite settled precedent on the question. See Taylor v. Taylor
, 288 Ga. App. 334, 337 (2007)).A seemingly inescapable dilemma.
In any event, there is no way to deprive a spouse or surviving minor child of year's support in a will, by agreement, or otherwise. This is true even if (for example) the spouses have been married for only one year and the will clearly states that only the children from the testator's previous marriage are to receive his or her estate. Solution: there is no estate.
To avoid these problems, one must simply die with no property. Though a seemingly drastic solution, it can be accomplished without also requiring that one's last check bounce. Attorneys use an agreement called a revocable, inter-vivos trust or "living trust" in order to make sure one can enjoy one's property during one's lifetime but have complete say over how it is distributed after one's death.
A "living trust" is defined in more depth at the link below. But the important aspect of the trust for our purposes is that <b>it</b> and not the settlor (the person who made the trust) owns the property. When the settlor dies, the property in his or her estate cannot be taken as year's support because there is no property to take
: the trust technically owns it. Conclusion.
In Georgia, where wills are still the predominant method of estate planning, there is nevertheless a fine argument to be made for drafting a living trust in order to avoid the necessity of paying year's support. Even if year's support should
be paid and the testator wants to provide for a spouse and minor children, a living trust can allow the testator to establish
the amount he or she wants to grant the surviving family and not let it become a matter for costly, emotionally taxing dispute in probate court. Tanner Pittman, LLC
is an estate planning
law firm that regularly advises clients on living trusts, year's support, and a range of other complex estate planning questions. Feel free to contact us
today about your own such issues.
A writer for the New York newspaper the Times Herald-Record commented
Monday on the cost savings from using living trusts as vehicles for disposing of an estate and avoiding probate.
Since 1991, the article noted, a living trust has been a better bet in that state because of attorneys' high fees for probating - topping 3% of the gross estate.
Not so in Georgia.
Here, a typical represented
probate case costs between $1,000 and $2,000 in attorney fees. And many estates can be successfully probated without the need for attorney representation. I have learned that other state bars' practice of charging a set precentage of the estate size is the product of what can be characterized as legalized price setting. That is, the state bar as a whole dictates the fee, and all attorneys must take it.
So living trusts are often not the cheapest route to handling an estate in Georgia.
But are they ever called for?
The article above-cited states a reason they may be. It notes that disinherited heirs (say, children) need not be given notice of a trust's operation, whereas probate of a will contains a notice requirement. So, if you want to disinherit your children, the argument seems to go, prefer a trust because you won't have to send them a ticket to an estate contest by certified mail.
Frankly, that reasoning sounds too clever by half. It is the rare disinherited child that doesn't know of his or her parent's death and estate disposition, and trusts can be challenged in court every bit the same as wills can.
A recent case handled by Tanner Pittman, LLC
, however, may show a prominent exception in which a living trust could
serve as a device to protect the estate. In that case, the disinherited challenger to the will was a distant half-sister who had not seen the testatrix in years. In that case, it was in fact
the statutory notice requirement of probate sent to this half-sister that kicked off the will challenge. Had a living trust been drafted, it's possible expensive probate litigation could have been avoided. Tanner Pittman, LLC
drafts living trusts, wills, and other complex estate planning documents, and our firm is prepared to advise clients on whether a trust or a will is the best device for carrying out their estate planning needs.