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Last Post 28 Nov 2011 01:33 PM by  lkoschney
Subject: R-11-0023 PETITION TO AMEND RULES 7, 8, 10, 10.1, 10.2, 15.1, 15.2, 18, 19, 22, 26, 26.1, 27.1, 28, 29, 29.2, 30, 30.1, 30.2, 30.3, 30.4, 33
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22 Jul 2011 12:33 PM
    R-11-0023

    Petition to Amend Various Rules of the Rules of Probate Procedure

    Would amend probate rules to improve judicial oversight and processing of probate matters

    Petitioner’s Name: Lorraine Smith
    Committee Name: Arizona Judicial Council
    Mailing Address: 1501 W. Washington, Suite 411,
    Phoenix, AZ 85007
    Phone Number: (602) 452-3301
    FAX Number: (602) 452-3484
    E-mail Address: ctrimble@courts.az.gov

    Filed: July 19, 2011.

    COMMENT DUE DATES:

    September 22, 2011: Initial comments to the petition due.
    September 30, 2011: Petitioners may file an amended petition, as necessary.
    November 1, 2011: Comments to any amended petition due.

    ADOPTED as modified.

    Rules 7, 8, 10(C)(4), 10(D), 10(G), 10.1, 15.1, 15.2, 18, 19, 22, 26, 26.1, 28, 29 & 33, Rules of Probate effective on and after February 1, 2012.

    Rules 10(E)(1) and 2, 10(F)(1) and (2), 27.1, 30, 30.1, 30.2, 30.3, 33, and 38, Rules of Probate Procedure and Rule 31, Rules of the Supreme Court effective on and after September 1, 2012.
    Attachments
    ShermanS3
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    30 Aug 2011 03:59 PM
    Clarence S. Scott
    3170 Granite Drive
    Prescott, AZ 86301
    (928)925-2057
    FAX (928)717-9720
    shermscott@northernarizonafiduciaries.com

    In regards to Appendix F.2.D, travel is an expense borne for the benefit of the ward or the estate, whether it be by bus, train, plane, taxi or private car, whether it be in state or out. The cost of transportation is no different than any other purchase on behalf of the ward or estate and should not be treated differently. It is not a money making scheme, but merely a reimbursement of expenses. Where a bus, train or plane ticket serves as a proof of expense, and a taxi fare receipt does the same, it is difficult to break down the costs for a private car. The simplest and most equitable method would be by calculating mileage and charging the rate allowed by the IRS.

    In regards to Rule 30.1, the Good Faith Estimate should be deleted. In order for a Good Faith Estimate to have any applicability, or be anything more than a wild guess, the petitioner must have access to more than public records. The petitioner does not have the authority to access anything more than public records prior to appointment by the court. In addition, no provisions are made for recompense of costs incurred by the person making the Good Faith Estimate. Even research of public records requires time and money and would seem more appropriate after appointment than before.
    Jonathan Reich
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    14 Sep 2011 09:36 AM
    Jonathan Reich
    Jonathan W. Reich, P.C.
    7049 E. Tanque Verde Road, #17
    Tucson, AZ 85715
    520-323-2290
    fax 520-323-2895
    Jonathan.Reich@azbar.org


    With regard to the good faith estimate in proposed Rule 30.1, this proposed rule should not be approved as it is not needed.

    The driving motives for the new statutes and rules was to provide advance notice and to promote efficient and cost-effective management of a protective person's estate. This proposed rule will simply add to the costs of the process without providing any significant information to justify the additional cost.

    A prospective conservator will usually have no legal access to the information resources to provide any type of good faith estimate that would have any usefulness or bearing on the case prior to appointment. Prospective Rule 30.1 will require such proposed conservator to make some due diligent effort to obtain some information to either make a good faith estimate or inform the court and parties that he/she cannot make any good faith estimate. The time consumed will not be beneficial to the proposed protected person and will add to the costs of such petition. The good faith estimates received will not impart any significant information that would justify the expense of the due diligence undertaken. It is not even clear exactly what the use of such information would be at this time in the process.

    Prospective Rule 30.2 provides for a budget at the same time as the inventory (90 days after appointment), at which time the conservator will have sufficient financial information to actually impart useful information.

    The type of cases where a proposed conservator would already have enough information to even make a good faith estimate is most likely confined to situations where the proposed conservator is a spouse or someone who already has access to the proposed person's finances. In the vast majority of these types of cases, the usefulness of any good faith estimate would still be nonexistent.

    The bottom line, with respect to proposed Rule 30.1, is that it does not provide useful information in relation to the additional costs of the petition process it creates.
    cwisnom
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    14 Sep 2011 12:09 PM
    Craig Hunter Wisnom, Bogutz & Gordon, P.C.

    Craig Wisnom
    3503 N. Campbell Avenue, Suite 101, Tucson, AZ 85719
    520-321-9700
    520-321-9797
    cwisnom@bogutzandgordon.com
    Bar #: 016829


    These comments are made with due respect to the effort that has gone into these proposed rules, which I know constitutes hundreds of combined hours of meetings, reading, travel, and writing. Additionally, I am of course sympathetic to the goal of the committee to have the probate process work as well as it possibly can, and of course to always protect the best interest of those being protected. A number of these proposed rules clearly work towards that end by making things clearer and easier for family members and others involved in the Guardianship and Conservatorship; however, there are others that create a great deal of additional, mandatory complexity instead may work against these goals and the best interests of the protected parties and their loved ones.

    With that respect, I would ask that before these rules are enacted, the AJC seriously and deeply consider whether each of these rules will truly serve those purposes, or whether it will merely add another layer of complexity, cost, and time, to an already challenging role of serving as, or representing, a fiduciary. To that end, the proposed rules that offer guidance to the judicial officers, attorneys, and fiduciaries for administering these cases are beneficial and helpful. For example, guidance on how and when fees are to be charged, how time is to be calculated, etc. is a positive change to provide clarity in assessing fees, WITHOUT unduly adding mandatory complexity. The initial disclosure of fees, for clarity and transparency, which is now enacted by statute, is also helpful.

    However, to the extent proposed rules are overly rigid, and/or greatly increase the paperwork already involved for these type of proceedings, I fear that an unnecessary layer is being added and given the history of the courts, legislation, rules, and bureaucracy, these layers are generally never, ever removed.

    We have already seen many of these rules put into place, from verified statements, the licensure of fiduciaries, the requirement to file account statements, the “general order”, the proposed appointees affidavit, and in Maricopa County, the court accountant; based on the necessity and scope of the Committee, none of those solved the problem that sometimes there will be bad, sloppy, inaccurate, or evil people entrusted as fiduciaries or their attorneys.


    For example, the most problematic cases we have seen publicized were in Maricopa County, where they have the purely additional layer of complexity of a court accountant, yet that has not reduced the problems. Additionally, keep in mind what is already a thoroughly complex structure for conservatorships prior to any of these rule changes; each year, EVERY conservator must account to the Court for the maintenance and expenditures of non-restricted assets, which the courts duly scrutinize, along with proof of what is in the financial account. The courts regularly question family members, professional fiduciaries, and attorneys on questions or discrepancies which are seen in the accountings.

    I think it’s important to note that all the tools, laws, and procedures are in place for the Court to make sure funds are handled by a Conservator appropriately, and any emphasis should be on properly administering these, not adding these. The additions to statutes requiring a fiduciary and attorney to not waste fees on unnecessary litigation, combined with the Sleeth case, give the most important laws possible to avoiding some of the most egregious results of fees being wasted from a protected party’s estate. So, in looking at these rules, please consider whether this is really the way to fix a system, or just to make it more complicated.

    Put more bluntly, in lay person’s terms, if you sat down with someone who was considering being appointed as Guardian or Conservator for their elderly parent, and showed them the additional forms that were going to be required under the proposed rules, how would they react? Again, speaking frankly, looking at all the rules as proposed, as an experienced probate practitioner I would estimate that all these requirements would double the billable time for an attorney to represent an individual fiduciary to establish and administer even the most straight forward guardianship and conservatorship cases. I don’t believe the person being protected will be any better served by those additional fees, though we won’t have a choice. So, either the attorneys will make more money in those cases in unnecessary work, or perhaps less people will seek that advice which could have been most helpful at the outset to avoid future problems. We frequently see this when individuals and family members act as fiduciary without someone advising them of their duties and tremendous responsibility.

    I also share the frustration that, in certain highly publicized Maricopa County court cases, hundreds of thousands of dollars are being spent on attorneys fees where all that money really did nothing to advance the interests of the incapacitated party, and agree that something should absolutely be done to prevent those occurrences. Given that the most outrageous cases that have fueled public opinion ALL involve litigation, it seems that those situations could be far more narrowly and appropriately addressed than through these rules. The recent Sleeth case, by itself, gives tremendous guidance and clarification as to the fact that thousands of dollars should not be spent chasing after hundreds, and similar discussions that will guide judicial officers in determining the reasonableness of fees, and the actions that lead to those fees.


    Litigation can cynically be viewed as an isometric exercise where lawyers on both sides make money through the same amount of action, but it’s understandably more problematic when, in a fiduciary case, both sides may be paid from the same party, and that party is incapacitated. While cutting through litigious waste in these cases is a welcome goal, and some of the proposals address that, I hope they are completely successful; however, so much of the practical effect of these most detailed and mandatory rules will fall on the majority of cases where there is no litigation, and the fees of fiduciaries and attorneys are far more effectively and proactively applied to the actual benefit of the protected parties.

    I hope the AJC will ask itself, with regard to each proposal, when this rule is applied to every case, big and small, complicated and simple: will it really make things better for the protected parties of Arizona in the long run, or unduly make things more complicated and expensive in the aggregate for those involved, including the people we’re trying to protect?

    The specific rules which I most strongly request this body to reconsider are:

    (A) The triage/risk assessment reports required by the investigator: These reports ask an investigator to apply hard, objective numbers and answers to the most subjective possible issues. “Ward appears to be in one or more unhealthy relationships.” To try and compute a rubric for such human issues is simply unproductive, and given the amount of time that will go in to these reports, simply seems to waste the protected party’s money, the exact result these rules should be trying to reduce.

    (B) The updates to the annual accounting requirements and inventory, including the budget and the sustainability forms. While it is of course a good idea for a fiduciary as part of their responsibilities to look at these issues, the uncertainties, ambiguities, and realities of these factors make processing, preparing, and implementing these detailed, mandatory, and rigid forms, in every case, an undue time burden and additional expense; you are also going to make life far more difficult for every honest and forthright fiduciary out there, whether family member or professional.

    (C) Please strongly consider all of the laws and procedures we already have; the requirement for an annual accounting that is reviewed by the Court, and the updates to statutory law requiring fees not to be wasted and the similar requirements of the Sleeth case. Ask whether or not these basic policies, rules, and statutes, if properly implemented, are not fully sufficient to give the courts power to look over the shoulder of fiduciaries and reasonably ensure they are doing an appropriate job. Then consider what it will look like to every potential fiduciary, family member or professional, when they are shown the stack of additional forms now required. These forms look like multiple versions of the more complex Federal tax forms. Please realize the difficulty you are going to cause for them, without really enhancing the protection of the incapacitated party.

    (D) Consider whether it is advisable or necessary to ask for a determination of life expectancy. Whatever the method of trying to calculate life expectancy, whether it is up to the fiduciary/attorney to find a method or determine it, or whether the rules require adherence on some rigid table, in all but the most short-term terminal cases, this number will be inaccurate and not at all useful. We constantly see protected parties (especially those with good care) far, far exceed their “life expectancy” meaning that planning based on that may do more harm than good. Furthermore, any sort of table or calculation is only statistically useful over a large population, not for an actual prediction of one individual’s life expectancy. If the determination is supposed to be subjectively based on a particular individual, consider the unwillingness or inability of physicians to provide that information, and that, in personal injury cases, life expectancy is a greatly contested factual issue.

    In addition to the purely practical problems and lack of utility to trying to come up with this calculation, this can be extremely harmful to the emotional well-being of the protected party, in many ways. It may be the conventional narrative from those not in the fiduciary or elder law practice that a person in legal need of protection is unable to understand ANYTHING, and sits quietly in a chair or bed all day, belying what is in fact the extremely active and engaged nature of most protected parties, despite their cognitive or other impairments that require legal protection. For instance, as a real life example, a protected party will frequently get extremely upset reading the pleadings, which they have a right to see, saying they have dementia. Imagine now these pleadings say they are expected to die within 8 years, and how inappropriate a statement and message that is to convey to the person we are trying to protect.

    Any required calculation on “sustainability” should focus only on the income/assets/appreciation expenditures, because for all the uncertainty in those figures, they are still far more reliable than any method of trying to determine individual life expectancy, and they don’t have incredibly inappropriate negative impact emotionally on the people whose dignity we are trying to maintain and protect.

    (E) While there are certain rules and impacts here that will restrict and limit fees, in the simpler, more “routine” cases, if these rules are enacted in their entirety, they will greatly increase the time and legal fees incurred to pursue basic court protection of a person. This will make more money for the lawyers, but not help the protected parties, and it will also discourage people from seeking necessary protection, only making things worse. We have always found Arizona’s probate court to be a reasonably effective and efficient example in the nation of helping families without unduly making attorneys rich and these rules would greatly reverse that standing.

    Thank you very much for your consideration of this.


    Craig Hunter Wisnom


    becketttanderson
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    16 Sep 2011 03:46 PM
    Robert Beckett
    Beckett & Anderson
    111 W. Monroe Suite 1114
    Phoenix, Arizona 85003
    602-257-0336 ext 1
    rbeckett@beckettanderson.com



    RE: R-11-0023
    Petition to Amend Various Rules of Probate Procedure

    September 16, 2011

    I respectfully request that the provisions of the proposed rules regarding accounting Form 8 (including the sustainability analysis) either have a delayed implementation date pending further study or that only a random sample of the conservatorship accountings be subject to Form 8 as of the implementation date. In my opinion, the implementation of Form 8 as proposed will substantially increase the cost of annual accountings and may not result in the outcome envisioned by the rule and comments.

    Beckett & Anderson has represented conservators for the past 35 years. Presently, we represent more than 30 conservators of protected persons who file annual accountings. All but one of the conservators is an individual who is a family member of the protected person. The protected persons range in age from 11 years old to 65 years old. The annual accountings range from the fourth annual account to the twenty-seventh annual account. The conservatorship estates range from total asset values of $20,000 to $7.0 million with most being in the $500,000 to $3.0 million range. The actuarial life expectancies of the protected persons range from 20 years to 73 years.

    In our practice the annual accountings are prepared by the bookkeeper utilizing the current Maricopa County accounting format. The bookkeeper costs in preparing the accountings are generally in the $300 to $800 range.

    Comments on accounting form 8:

    I have requested that the bookkeeper who prepares the accounting perform two pro forma accountings using the proposed format. The bookkeeper created an excel worksheet based on the schedules to form 8. The bookkeeper then put in 2009 and 2010 account figures for accountings which had been submitted to the court and approved by the court Based on my review of these pro form accountings, I estimate the increased accounting-related costs including the time of the bookkeeper/or other financial person preparing the accounting, the attorney reviewing the accounting, and the attorney and forensic analysis costs in providing a meaningful sustainabilty analysis will increase the cost to my clients in the range of $2,000 to $4,000.

    It is my opinion that due to the complexities in the proposed court accounting format, that conservators and their counsel will increasingly turn to certified public accountants to prepare accountings at hourly rates in the range of $150 to $200 an hour. In my experience, bookkeepers and paralegals are often used to prepare accountings with hourly rates in the $50.00 to $125.00 range.

    In my review of the pro forma accountings which the bookkeeper prepared, the following specific issues require attention:

    1. The required Transaction Log for Form 8 is the bases for most of the information that ultimately finds its way into the court-required schedules The Transaction Log is briefly described on the second page of Form 8 but is not further described in the Instructions to Form 8.

    2. In my opinion, the Other Receipts and the Other Disbursements columns are going to create complexity and confusion. In accountings with substantial investment assets, the Other Receipts and the Other Disbursements will include all of the gross investment asset sales of investments and all of the gross investment purchases during the accounting year respectively.

    3. Schedule 2 is in essence a balance sheet. Schedule 1 has aspects of being an income-receipt/expense-disbursement statement but
    does not tie into the balance sheet. I know of no accounting system
    which does not tie a balance sheet to an income statement. As the It is not clear if the Transaction log will require a balance sheet and income statement. As I view the pro forma accountings prepared by my bookkeeper, the reader of form 8 will need to view Schedule 1, Schedule 2, the supporting schedules for Schedule 1 and 2 and the transaction log to piece together an income statement tied to a balance sheet.

    Comments on the Sustainability Analysis

    The actuarial life expectances of the protected persons for whom annual accountings are prepared in our practice range from age 11 to age 65. For the most part these protected persons have severe mental and/or physical impairments. Modern medicine has prolonged the lives of many of these protected persons. A layman’s opinion on the remaining life expectancy of these protected persons will be without foundation. Any valid medical expert opinion would need to be based on a systematic review of the protected person’s medical records accomplished by a medical professional practiced in estimating life expectancy, such as medical doctors retained by life insurance companies to provide rated ages of severely disabled persons in the context of structured settlement cases.

    Projecting future care costs for severely disabled persons with actuarial life expectancies of 20 to 73 years will not be reliable. This is particularly true in situations where aging parents are providing the care at below market care rates but when the parents can no longer provide the care, market rates will prevail.

    I would respectfully suggest the following:

    a. That pro forma accountings on the proposed form, utilizing prior accountings which are of public record (redacted), be
    accomplished and circulated for review by practitioners. If such pro forma accountings have already been done, they should be circulated.

    b. That the implementation date of form 8 be delayed or, alternatively, that the form 8 implementation be limited to a random percentage of accountings, perhaps 5%.


    c. That there be seminars/training sessions for those who prepare and review court accountings.

    d. That there be further study of the sustainability formula and instructions.

    e. That if form 8 is implemented in its entirety on January 1, 2012, a comment be set forth in the rule which elaborates on the court’s discretion to relieve a party from using form 8 with consideration to the added costs which may be involved in form 8 in the initial stages of its implementation.



    crismoncooper
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    20 Sep 2011 12:08 PM
    Crismon Cooper
    Crismon Cooper Licensed Fiduciaries, LLC
    P.O. Box 23636
    Flagstaff, AZ 86002

    COMMENTS TO PROPOSED AMENDMENTS TO THE ARIZONA RULES OF PROBATE PROCEDURE

    Rule 10, Arizona Rules of Probate Procedure

    Concern: Rule 10(C)(1)(b) states that the fiduciary shall refrain from charging to attend court proceedings, including depositions, unless such attendance is required by law, court order or other circumstances such that the fiduciary’s attendance is necessary. I am the legal voice of my ward if I am serving in a guardianship capacity, and therefore need to be there to act on his or her behalf and in his or her best interests. In attempting to find the reason I would not be required or necessary in one of these events, it would only be if it were an action outside of the realm of my responsibility, i.e. it is a conservatorship matter and I’m the guardian. However, there have been instances where as the guardian, I can shed light on the proceedings even if they involved the conservator. I have attended criminal proceedings for clients where I’m just the conservator, but had more information to supply the attorney for the ward which assisted him in his representation of the ward. I am afraid that whatever the proceeding, if the participants in the ward’s life are not there, there will either be rulings made on misinformation, or the hearing will need to be reset.

    Recommendation: Strike this section.

    Rule 10.2, Arizona Rules of Probate Procedure

    Concern: Rule 10.2(C), in the last line, appears to open up a bidding process for anything from nursing home care to fiduciary and attorney fees. Unless our standards have been changed without my knowledge or understanding, fiduciaries have a duty to preserve the lifestyle of their wards. This often means that we place them in a more expensive but socially more active home than in a less expensive but more rural environment. Obviously, if the costs outweigh the benefits, we need to adjust this responsibility and engage in less expensive services. However, I am concerned about the statement, that “at any stage in the proceedings the Court may order that competitive bids for goods or services be obtained”. I assume that as the fiduciary, I would be allowed to explain why we chose nursing home A over nursing home B, but shopping for fiduciary and attorney fees can also be misleading and ultimately more expensive. I have been appointed to cases where the prior fiduciary’s fees were considerably more than mine, so I believe the Court already has the power to change fiduciaries or attorneys. My concern would be the ability of the Court to limit my ability to get the appropriate care for my wards.

    Recommendation: Strike this last sentence.

    Rule 19, Arizona Rules of Probate Procedures

    Concern: Rule 19(B) states that, “Absent good cause, a party who seeks the appointment of a guardian or conservator shall not nominate a specific attorney to represent the subject person unless the attorney has an existing or prior attorney-client relationship with the subject person.” On the face of it, I understand where this may have been abused in the past. However, I am from Coconino County, and at the last count, we had 3 attorneys who would act as “court appointed” attorneys at the fees paid by the County. I typically “nominate” one of several attorneys in the area based upon their fees (sole practitioners charge less than large law firms), their knowledge of this area of law (there are a lot of dabblers out there who can really increase the fees with their lack of knowledge), and based upon their reputations as honest attorneys who care about their wards and don’t “churn” their fees. Because I am responsible for paying their fees from the ward’s estate, and therefore am responsible for the reasonableness of their fees, I believe I should have some input into who gets appointed to these cases.

    Recommendation: Change this wording to say, “If a prospective ward does not have an existing or prior attorney-client relationship with an attorney, a party who seeks the appointment of a guardian or conservator may only nominate a specific attorney to represent the subject person if they do not have a conflict of interest with said attorney, and if they believe said attorney can represent the subject person, adequately, at a reasonable attorney fee, and without prejudice.”

    Rule 22, Rules of Probate Procedure

    Concern: Rule 22(C)(2) states that restricted “funds shall be deposited into an interest bearing, federally insured restricted account at a financial institution engaged in business in Arizona.” This directly violates the Prudent Investor’s Standard in that it literally mandates that we place these funds in accounts making about point nothing in interest. Fiduciaries are managers of professionals. I am not a financial expert, but I do know that investing $500,000.00 in a money market at .025% is not prudent, and it is certainly not going to increase my ward’s assets. I always utilize financial experts and stress the need to protect the assets to the best of their expertise, given the client’s wealth, income, expenses and age, but to certainly not place them in a low to no interest account.

    Recommendation: Strike the following language: “Funds shall be deposited in an interest bearing, federally insured restricted account at a financial institution engaged in business in Arizona”. Replace that sentence with, “Funds shall be deposited in a restricted financial institution or brokerage account. The Fiduciary shall consider the needs of the beneficiaries, the provision of regular income, the preservation of assets and should avoid excessively risky investments pursuant to the Prudent Investor Rule”.

    Rule 30.1(A)(B)(C). Rules of Probate Procedure

    Concern: Rule 30.1(A)(B)(C) requires the Petitioner (in my case, I am usually the Petitioner) to come up with a good faith estimate of all projected monthly and annual costs that shall be incurred by conservator…As it currently stands, I am hard pressed to ascertain how much money the prospective ward even has, let alone what the fees and expenses will be monthly or annually. If the prospective ward is so inclined, and 90% of the time, they are not, I may have a copy of a couple of bank statements. If a family member is involved, and they actually feel like cooperating with me, I might know more. I do know that I will expend more in fees initially trying to marshal assets and get on existing accounts. I do know that the banks won’t and should not give me any information until I am appointed, and even then we have to deal with Legal Departments in other states who have no idea what we do. I would suggest that the “to the extent the information can be reasonably known or projected at the time the petition is filed” is, not very much and not very likely. We are going to be filing a budget with annual expenses and income with our inventory 90 days after the appointment. Even then we won’t know the full picture but can at least make a “good faith estimate”. This is a case of attempting to reduce loss and risk by increasing senseless and useless administrative efforts. My comment on most of my Petitions will be that due to a lack of authority, I could not get an estimate of anything. Even assuming this matter is laid out perfectly at my feet, I’m able to come up with the good faith estimates, I know the expenses and the fees, I guarantee you it will change by the time the inventory and budget are done, and we’ll have to either amend the good faith estimate, or ask for permission to change it all on the budget we submit in 90 days.

    Recommendation: Strike rule 30.1 entirely.

    Rule 30.3, Arizona Rules of Probate Procedure

    Concern: I think this rule oversimplifies the duties and responsibilities of a fiduciary. Yes, when we take cases, we determine whether or not there are sufficient assets for a private fiduciary to be involved. This process includes the age (not estimate of how long they will live because I have no idea), their existing income and assets vs. how difficult this case will be and therefore, how much will be expended in fiduciary and attorney fees. We have no set formula, but if the client is seriously mentally ill, has an income of $600.00 per month, lives in a trailer and is probably going to need to be in an institution someday, we won’t take that case. If the individual has a home worth $300,000.00, and income of $3,000.00 per month, we try to assess their health and the longevity of their funds: Are they going to need to be in a home someday, are we able to get them on Arizona Long Term Care and allow them to stay in their home, what condition is the home in and are we going to be able to sell it if we need to? If we determine they can’t live alone, and their income precludes Arizona Long Term Care but is insufficient for a nursing home, we might look at that $300,000.00 home and decide that the proceeds from the sale will sustain them for the next 5 to 6 years. If we come up short, we qualify the ward for ALTCS when the time comes, and we keep them at no charge. The truth of the matter is that the ward with the $3,000.00 income and the house, if healthy, is going to outlive their funds no matter who takes them. I appreciate the “out” we are given which is to come up with an alternate management plan, which in many cases includes the fact that we will assist them in retaining their quality of life, and “give back” to them by keeping them if they run out of resources. While not all fiduciaries will do that, I would hope that it would be a sufficient enough management plan to allow us to keep them. The budgets alone should let you know if a private fiduciary can handle the case, and if the Court has questions concerning that, the fiduciary can commit to keeping a case which runs out of funds, or give it to the Public Fiduciary in the first place.

    Recommendation: Strike rule 30.3 in its entirety. Rule 30.4, Arizona Rules of Probate Procedure

    Concern: Rule 30.4(D) requires that the conservator shall file an amendment to the budget if we exceed the budget by 10% or $2,000.00 within 30 days of reasonable assumption of that increase. There go the administrative costs again. So, every time a ward needs more dental work than anticipated, or is moved to Skilled Nursing from Assisted Nursing or needs temporary or permanent additional care, or any of a hundred real life unanticipated expenditures, I will charge an hour or so to amend the budget, my attorney will charge to review it and finalize it, we’ll mail it out, hope we have no objections, and we have added even more fees to our already anticipated overage. If a ward needs more care, it is easily explained in the next account, and it isn’t something that the court or the interested parties would want to prevent. If my ward’s washing machine broke, and they need a new one, do we really want to add administrative costs to the mix so that I can explain that in 30 days? It seems to me that the subjective part of the budget are the administrative fees. That is the part that we should have to explain and that is the part the Court could actually do something about. Limit the amendment to the budget to cover increased or unexpectedly high fiduciary and attorney fees.

    Recommendation: Change the word “expenditures” in paragraph D to administrative, fiduciary and attorney fees. Strike “for any specific category”.

    Proposed Statewide Fee Guidelines IX

    Concerns: I do not think that it is appropriate to dictate how often a fiduciary should visit a ward, but perhaps how efficient and how effective the visits or visit is. I have Wards who live in facilities where they are thriving and need a visit from me once a month just to remind them who I am, see what their current shopping or personal needs may be and to just get an overall feel for their welfare. These visits typically take about ½ hour. I have wards who need to see me weekly or at least every other week. They are upset, confused, forget who I am, forget that we can help them, and need more attention. These mini visits take perhaps twenty minutes to a half hour. The emphasis should not be on the quantity of the visits but the quality.
    Recommendation: Strike IX and replace it with: “On a case by case basis, the Fiduciary should visit with the ward or protected person as often as necessary to ensure that they are safe and that their quality of life is maintained. These visits should be minimalized as used as information gathering visits . As the Ward or protected person becomes more adjusted to their surroundings, and the confidence of the Fiduciary increases, the visits should be shortened routine monthly visits.

    Proposed Statewide Fee Guideines X

    Concern: The Statewide Fee Guidelines X allows five hours per year per account. Each account includes probably two to 8 financial institutions and brokerages which also have to be itemized in each of the accounts. An account is like a giant checkbook which captures all of the receipts, disbursements, gains and losses. Each separate account in an account can take up to 2 or 3 hours just to get them input and balanced for the entire year.

    Recommendations: Change the language in X to say, “Preparation of Conservator’s account and Budget: Two hours per individual account or brokerage per year.

    Attachments
    Christopher
    Posts:

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    20 Sep 2011 06:34 PM
    Chris Hitchcock
    Law Offices of Christopher Hitchcock, PLC
    Box AT
    Bisbee, AZ 85603
    lawyers@Bisbeelaw.com

    I practice almost exclusively in Cochise County and I believe the proposed rules, due to the lack of available resources in rural areas, professional and otherwise, will create significant practical problems to the detriment of all involved in this process. There are very few lawyers who are willing to represent a proposed ward. There is no list of individuals who are willing to travel 40 miles to another city, let alone someone who is truly lives "far from the maddening crowd". There is one licensed fiduciary in the county and very few from Tucson, the nearest metropolis, who are willing to spend an afternoon seeing a client in Douglas.

    Rule 19

    As I indicated above, there is no list of individuals available for the Court or the Clerk from which to appoint a lawyer to represent a proposed ward. If I as the Petitioner, cannot nominate someone willing to do that job, we cannot go forward. Similarly, those practicing in this area generally have represented or are currently representing professional fiduciaries. 19 C, as proposed, due to the lack of lawyers practicing in this area, will stain existing professional resources. Please consider making this a notice requirement to all involved.

    Rule 27.1

    While the idea of requiring training for non licensed fiduciaries has some appeal, please consider requiring this within 45 days of a person's appointment. Otherwise, I will be faced with telling grieving spouse/grieving kids that you can not start taking care of spouse's/Dad/Mom's estate until you first take a course. Moreover, will these courses be available in the rural areas? Will they be available for non English speakers?

    Rule 10

    Just a comment similar to that for Rule 19. Will these be available in the rural area or will we need to travel to Tucson? Or even further north of the Salt River?

    Rule 26

    Please consider changing this to at least filing the copy of the recorded Letters within 45 to 60 days. Some recorders offices are having to live with significant cutbacks in personnel.

    Finally, I join with most of the other comments made by my fellow practitioners listed above me. I am incensed by the practices reported by what I believe are a few individuals. I understand the need to seek to regulate. Please carefully consider the costs to comply for all involved.

    Thank you for this opportunity.










    dawn_walters
    Posts:

    --
    21 Sep 2011 02:29 AM
    ENTRUST GUARDIANSHIP SERVICES, LLC
    250 N. LITCHFIELD RD., SUITE 115, GOODYEAR, AZ 85395
    TELEPHONE: (623) 386-3963
    FACSIMILE: (623) 386-2005

    DAWN R. WALTERS, LF, NCG
    DAWN.WALTERS@ENTRUSTGUARDIANSHIP.COM
    September 20, 2011


    PUBLIC COMMENTS REGARDING PROPOSED ADMINISTRATIVE RULE CHANGES


    Probate Rule 10 D regarding minimization of legal expenses:

    I strongly support this provision in its entirety. This should also be a factor that is considered
    when making court appointments. Often I have seen family members appointed with the thought
    that they were preferable to a paid professional in overall benefit to the estate and client served,
    but the end result is that the attorney for the non-professional is charging for activities the
    fiduciary would have accomplished at 1/3 to ½ of the cost to the estate, and in addition the non-
    professional is employing geriatric care managers and other professionals that would not have
    been required had the paid professional been appointed.

    Rule 10 E. regarding training:

    I strongly support increased training requirements of all parties participating in the probate
    practice. Ongoing training should be required for everyone involved in the affairs of vulnerable
    adults. This is a complex area of practice and rules are constantly changing and evolving. The
    proposed amount and frequency of training is insufficient. Fiduciaries are required to complete
    20 hours, including mandatory ethics minimums, every two year renewal period. Court
    appointed counsel should have a comparable education requirement.

    Rule 10.1 Allowing the fiduciary to file certain documents without an attorney or a document
    preparer license:

    I strongly support this rule change. This would have an immediate positive impact on estates
    served. It would reduce costs not only in attorney’s fees, but also in fiduciary fees reviewing
    documents that the fiduciary alone is held accountable for and the fiduciary’s time dealing with
    revisions from the attorney to ensure accuracy.


    Rule 10(C)(1)(b): I endorse the comments of my colleague Lisa Price:

    “Indicates that the fiduciary shall refrain from charging to attend court proceedings unless it is
    required by law, court order or other circumstance. I understand the purpose of this provision is
    to conserve fees. Unfortunately, I believe it will do the exact opposite. As a licensed fiduciary I am bound by the Arizona Code of Judicial Administration §7- 202(J)(1)(e), which states in part,
    “Regardless, the fiduciary alone is ultimately responsible for decisions made on behalf of the
    ward, protected person or estate.” As such, I am the only person who could answer questions on
    behalf of a particular case. I could provide numerous examples where I have attended a
    hearing expecting it to be “routine” only to have someone attend the hearing and object or
    have the court have questions that only I could answer. (Emphasis added.) If I were not at the
    hearing, the court would then have to reset the hearing which is a waste of judicial resources
    and ultimately will increase costs to the ward, protected person or estate.”

    Additionally, the guardian “stands in the shoes” of the protected person. The protected person
    has the right to attend any hearings pertaining to him or her. The fiduciary is bound by the code
    of conduct to “vigorously” defend the rights of the protected person. It has always been held that
    if we are required by law to do something, we can and should be entitled to compensation for it. I
    believe that restricting the fiduciary from making him- or herself available to the court – or
    requiring that this be uncompensated time in order to exercise the ward’s rights - would violate
    the spirit of the code of conduct. We are not only attending hearings, but we are meeting with the
    parties in the case, exchanging and ensuring accuracy of information before, during, and after
    hearings – information that is vital to efficient, effective administration.

    Rule 10.2 regarding Sleeth findings:

    I believe that this opinion largely underscored what legal remedies were already available. I
    support of any clarifying guidance in the rules. It is inherent in the fiduciary’s job and code of
    conduct that we are to weigh costs and risks against anticipated benefits. Regarding competitive
    bids, there would need to be strict adherence to an all-inclusive process to ensure that there were
    no favoritism. Cases should not be awarded on a familiarity system. Competitive bid
    requirements should be structured so that there is no opportunity to “low ball” the bid and then
    come in significantly over budget every annual accounting.

    Regarding competitive bidding, I would request that clarification be added to address the concern
    of my colleague, Lisa Price, that this provision could “[open] up a request by the court or an
    interested party to request a competitive bid for nursing home costs, in-home care costs or
    fiduciary fees. As anyone who has ever dealt with a competitive bidding process can tell you,
    rarely is a project completed on time or within the budget. Additionally… simply charging a
    lower hourly rate does not mean that your fees will ultimately be less than another service
    provider as the practices of the office determine the fee much more so than the hourly rate.”

    Rule 15.1 regarding guardians ad litem:

    Regarding section “B”, the “reasons for and duration of appointment” should also include a
    recommendation that, barring good cause, the guardian ad litem should be discharged upon the
    appointment of a permanent guardian/fiduciary. This is a redundant role as the guardian is
    responsible for advocating the protected person’s best interest before the court.

    Rule 15.2 (D) is in need of revision for general readability and clarity of intent. The way it’s
    written, it sounds as if we need to be taking “action” or having a hearing every six months; on a
    routine, established matter we are often in court only annually or not at all (nonappearance
    hearings). It should be revised to clarify that this means that if no hearing on the appointment of
    a fiduciary occurs “within six months from the date a case is initiated by filing an initial petition
    for appointment” or something to that effect, as I assume this is the intent. If my assumption is
    incorrect and we need to be taking “action” or having a hearing every six months in a probate
    matter, this would be wasteful and unnecessary.

    Rule 19 (C): I am in 100% support of this provision. I believe this practice represents a
    professional conflict of interest and should not be permitted.

    Rule 22 (D)(2): I do not understand the intent of restricting the fiduciary’s ability to lease real
    estate owned by the estate for more than one year. Negotiating a long lease to ensure long-term
    cash flow may be advantageous to the estate and should be left up to the fiduciary’s discretion
    with approval of the court. I recommend striking the “leased for more than one year” clause from
    this rule. The statutes cannot anticipate individual circumstances and the court should be allowed
    discretion in determining what makes sense for the estate.

    Rule 26 (E): The timeframe for recording letters “in all counties where the estate owns real
    property” within 30 days is unreasonably short or should be restricted to “where it can
    reasonably determined that the estate owns real property”. There are times in which we don’t
    even know real property is owned by an estate until the annual tax notice is sent. In spite of due
    diligence searches, property can be owned in former names that we aren’t aware of or there are
    misspellings or errors in the public record that inhibit discovery and marshaling. Additionally, it
    should clarify that it is not a violation if the state in which the county is situated does not record
    foreign letters of appointment or outline what steps must be taken if that is the case, because this
    has been a situation I have encountered at least once in practice.

    Rule 26.1: I support this procedure as it ensures that there is transparency in the appointment
    process.

    Rule 27.1: I strongly support training requirements of all parties involved in the process,
    especially in cases in which the court is passing over a licensed, trained professional in favor of
    someone with no experience in the probate arena which, as outlined above, often sharply
    increases costs and risks to the protected person while attempting to avoid the same.

    Rule 29.2: I strongly support this proposal. I would encourage fiduciaries to cooperate with
    parties to the fullest degree, but we have all had cases where we are responding to redundant
    requests and attempts to re-open disputes regarding matters that have been settled, explained, etc.
    with damage to the protected estate resulting.

    Rule 30 (C) (1): The courts have been inconsistent in requirements for submission of annual
    guardian reports. There should be consistency. However, the cases that were initiated before this
    rule goes into effect should be exempt from any new calendaring requirements, to cut down on
    administrative costs required in reviewing files and implementing new filing deadlines. I have
    cases on which I am ordered to submit an annual report of guardian that covers a 9-month period,
    but that is to be filed three months later than the reporting period. This seems contrary to the
    purpose of an annual report of guardian. Cases can change rapidly and circumstances can change
    in a 3-month period. The annual report of guardian should summarize the prior year and provide
    a current status of the ward. The requirement should be that the report be submitted on or before
    the anniversary date and should provide the current status of the ward as of the date of
    preparation of the report, not to exceed 1 month prior to the date of filing.

    Rule 30 (D) (4) “Version 2 – Triage Program B”: If the investigator finds an increased risk with
    a proposed appointee, that could be good cause for appointing an alternative person with lower
    priority; therefore, why should it be inadmissible in evidence? Risk may be lowered and
    monitoring unnecessary with an alternative appointee. I recommend striking this provision.

    Rule 30.1 (A): Medical costs, including costs of long term care, are generally the highest costs to
    the estate. Excluding them, with the other expenses being limited to what “can be reasonably
    known” makes estimates highly subjective and potentially misleading and ineffective, opening
    the door to objections. Additionally, most costs cannot be known prior to appointment. I
    recommend requiring “good faith estimates” be required not of the petitioner, but rather of the
    conservator the time of filing the conservator’s initial inventory, within 90 days of appointment,
    and not with the initial petition. The petitioner is in no legal position to know or discover this
    information. Additonally, I recommend changing the wording “shall be incurred by a
    conservator” to “shall be incurred by the protected person’s estate”.

    Rule 30.2 (B): Recommended revision:

    “After a GUARDIAN AND/OR conservator AND/OR A GUARDIAN AD LITEM is appointed
    …”

    Rule 30.3 Regarding estimated lifespans: Appointees in probate matters are not qualified, nor are
    they required by law or standards of practice to be qualified, in estimating life expectancy. If this
    is a consideration imposed on appointees, there should be a prescribed manner of making such a
    determination that does not require the appointee’s own knowledge or expertise. I recommend
    rather that any requirements to calculate and estimate lifespan be stricken from this proposal. It is
    also not clear in section (A) when the conservator shall make the required disclosure if a
    conservatorship is not sustainable; a timeframe should be included.

    Rule 30.4 (D): I see this as potentially a very costly requirement. A ten percent or two thousand
    dollar variation may cost much more in attorneys and hearing times than the actual variation in
    budget. I recommend either striking this requirement or, in the alternative, making the triggering
    budget variation amount or percentage significantly higher than $2000 or 10%. The real-life
    scenarios outlined by my colleague are accurate:

    “If I have a client who is in assisted living, had a fall and breaks her hip and requires placement
    in a skilled nursing facility that is going to cause an increase in the budget by more than ten
    percent or two thousand dollars. Will that make a difference in how I manage the case? Of
    course not as the best interest of the ward/protected person is what take precedent. Or what if
    the air conditioning unit goes out on the home owned and lived in by my client. I have only
    estimated $2,000 for the year for household expenses and now I must expend $5,000 for a new
    air conditioning unit. How is it beneficial to the ward/protected person for me to update the
    budget and for my attorney to file that with the court and notice all parties? A $5,000 air
    conditioning unit now just cost the ward/protected person $6,000 due to the additional
    administrative expenses.” – Lisa Price

    Fee Guidelines:

    In general, I support any clarification on what fees can be reasonably charged and what factors
    can and should be considered by the court in determining reasonableness of fees and responding
    to objections regarding fees.

    Proposed rule 3 (“Points of Refernce”):

    #1: Four hours per month is an unreasonably low point of reference for a complex matter/large
    estate with complex assets. I have seen complex brokerage account statements that take 1-2
    hours each to reconcile.

    #3: The Fiduciary Code of Conduct mandates that a licensed fiduciary serving as guardian visit
    the ward “as often as is necessary to uphold the ward’s best interest.” There have been many
    situations in my years in practice which intensive hands-on advocacy and meetings with the
    protected person and his or her family, caregivers, friends, etc. were required weekly or even
    daily until a situation was resolved. The fiduciary should not be constrained from visiting,
    charging professional fees for visits, or ordered to disgorge fees for conducting visits in
    complying with the code of conduct and/or upholding the ward’s best interest. I recommend
    striking section #3 in its entirety.

    #4: Five hours per year is an unreasonably low guideline for a complex matter, especially if the
    fiduciary is required to revise the budget and appear in court every time the budget varies by
    10% or $2000. I would double this to ten hours.

    #5: Two hours per year to request a physicians’ report, review a year’s worth of documentation,
    and prepare an extensive report to the court is unreasonably low as a guideline. I would double
    this to four hours.

    #9: The factors that would trigger this provision can be entirely outside of the control of the
    fiduciary. Fiduciaries are not qualified or trained, nor do they have any expertise that would
    equip them to accurately anticipate the lifespan of the protected person. I recommend rewording
    this to read “IF IT CAN BE REASONABLY DETERMINED THAT the total amount of all
    annual expenditures, including reasonable professional fees MAY DEPLETE THE ESTATE,
    THE CONSERVATOR SHALL DISCLOSE WHETHER the conservatorship has an alternative
    objective …”

    Section 4 (F): Again, I will endorse the comments of my colleague:

    “regarding the delegation of duties to another individual. I agree that all fiduciaries (and
    attorneys) should delegate tasks to other staff whenever possible to conserve fees. … as licensed
    fiduciaries our Code of Conduct contained in Arizona Code of Judicial Administration §7-202
    limits our ability to delegate a number of tasks to non-licensed staff. Additionally, while not
    explicitly written in the ACJA, many fiduciaries have reported findings on audits when they
    delegate tasks to non-licensed staff.

    Recommendation: The best way to handle fee disputes is to simply use the findings of Sleeth v.
    Sleeth, all of which are currently contained in statute, rule or case law and were simply
    consolidated into one case.”

    Regarding Proposed Mandatory Forms: Most of these forms apply to conservators, while my
    practice with regard to court-appointed matters is limited to guardianship. However, the
    consistent feedback I have received from my colleagues and attorneys involved in
    conservatorship matters is that the time expended completing the forms will result in significant
    increase in fees to the protected person’s estate. While they are intended to increase
    transparency, most of them seem overly complex such that they will not achieve the intended
    result of giving a thumbnail sketch to parties and the court, and instead will lead to increased
    time expended on the part of all parties in both reviewing and completing the forms.

    One particular comment I have on forms is to make an analogy to the previously adopted “Order
    to Guardian”. This form effective January 1, 2009, for the first time ever required that guardians
    of incapacitated adults obtain “certified” letters of guardian. There is no practical reason to
    expend $26 to obtain certified letters of guardian and this requirement has resulted in what I
    believe to be unnecessary costs of administration. While the conservator has good reasons in
    practice to be required to obtain certified letters, I have never encountered a medical provider
    who required anything more than a conformed copy. I recommend careful re-consideration of all
    forms and a cost-benefit analysis of each one before final implementation. Just as there is no
    direct benefit to my wards from having a $26 set of letters in my file, there may not be any direct
    benefit to the estate from requiring a fiduciary to spend dozens of hours filling out complicated
    new forms that are incomprehensible to the majority of parties entitled to notice.



    Thank you for your consideration of my comments and for all of the efforts to improve the
    probate process so that it more effectively and efficiently protects the individuals it is charged
    with protecting.
    mlelle
    Posts:

    --
    21 Sep 2011 04:34 PM
    Maureen L. Edwards, LLC
    Post Office Box 2073
    Sun City, Arizona 85372-2073
    (623) 487-9800
    Fax: (623) 487-8352
    Email: mlesss2@cox.net
    Maureen L. Edwards, L.L.C. Licensed Fiduciary

    September 21, 2011
    Probate Rule 10 D regarding minimization of legal expenses:

    I strongly support this provision in its entirety. This should also be a factor that is considered when making court appointments. Often I have seen family members appointed with the thought that they were preferable to a paid professional in overall benefit to the estate and client served, but the end result is that the attorney for the non-professional is charging for activities the fiduciary would have accomplished at 1/3 to ½ of the cost to the estate, and in addition the non-professional is employing geriatric care managers and other professionals that would not have been required had the paid professional been appointed.

    Rule 10 E. regarding training:

    I strongly support increased training requirements of all parties participating in the probate practice. Ongoing training should be required for everyone involved in the affairs of vulnerable adults. This is a complex area of practice and rules are constantly changing and evolving. The proposed amount and frequency of training is insufficient. Fiduciaries are required to complete 20 hours, including mandatory ethics minimums, every two year renewal period. Court appointed counsel should have a comparable education requirement.

    Rule 10.1 Allowing the fiduciary to file certain documents without an attorney or a document preparer license:

    I strongly support this rule change. This would have an immediate positive impact on estates served. It would reduce costs not only in attorney’s fees, but also in fiduciary fees reviewing documents that the fiduciary alone is held accountable for and the fiduciary’s time dealing with revisions from the attorney to ensure accuracy.

    Rule 10(C)(1)(b): I endorse the comments of my colleague Lisa Price:

    “Indicates that the fiduciary shall refrain from charging to attend court proceedings unless it is required by law, court order or other circumstance. I understand the purpose of this provision is to conserve fees. Unfortunately, I believe it will do the exact opposite. As a licensed fiduciary I am bound by the Arizona Code of Judicial Administration §7- 202(J)(1)(e), which states in part, “Regardless, the fiduciary alone is ultimately responsible for decisions made on behalf of the ward, protected person or estate.” As such, I am the only person who could answer questions on behalf of a particular case. I could provide numerous examples where I have attended a hearing expecting it to be “routine” only to have someone attend the hearing and object or have the court have questions that only I could answer. (Emphasis added.) If I were not at the hearing, the court would then have to reset the hearing which is a waste of judicial resources and ultimately will increase costs to the ward, protected person or estate.”

    Additionally, the guardian “stands in the shoes” of the protected person. The protected person has the right to attend any hearings pertaining to him or her. The fiduciary is bound by the code of conduct to “vigorously” defend the rights of the protected person. It has always been held that if we are required by law to do something, we can and should be entitled to compensation for it. I believe that restricting the fiduciary from making him- or herself available to the court – or requiring that this be uncompensated time in order to exercise the ward’s rights - would violate the spirit of the code of conduct. We are not only attending hearings, but we are meeting with the parties in the case, exchanging and ensuring accuracy of information before, during, and after hearings – information that is vital to efficient, effective administration.

    Rule 10.2 regarding Sleeth findings:

    I believe that this opinion largely underscored what legal remedies were already available. I support of any clarifying guidance in the rules. It is inherent in the fiduciary’s job and code of conduct that we are to weigh costs and risks against anticipated benefits. Regarding competitive bids, there would need to be strict adherence to an all-inclusive process to ensure that there was no favoritism. Cases should not be awarded on a familiarity system. Competitive bid requirements should be structured so that there is no opportunity to “low ball” the bid and then come in significantly over budget every annual accounting.

    Regarding competitive bidding, I would request that clarification be added to address the concern of my colleague, Lisa Price, that this provision could “[open] up a request by the court or an interested party to request a competitive bid for nursing home costs, in-home care costs or fiduciary fees. As anyone who has ever dealt with a competitive bidding process can tell you, rarely is a project completed on time or within the budget. Additionally… simply charging a lower hourly rate does not mean that your fees will ultimately be less than another service provider as the practices of the office determines the fee much more so than the hourly rate.”

    Rule 15.1 regarding guardians ad litem:

    Regarding section “B”, the “reasons for and duration of appointment” should also include a recommendation that, barring good cause, the guardian ad litem should be discharged upon the appointment of a permanent guardian/fiduciary. This is a redundant role as the guardian is responsible for advocating the protected person’s best interest before the court.
    Rule 15.2 (D): is in need of revision for general readability and clarity of intent. The way it’s written, it sounds as if we need to be taking “action” or having a hearing every six months; on a routine, established matter we are often in court only annually or not at all (nonappearance hearings). It should be revised to clarify that this means that if no hearing on the appointment of a fiduciary occurs “within six months from the date a case is initiated by filing an initial petition for appointment” or something to that effect, as I assume this is the intent. If my assumption is incorrect and we need to be taking “action” or having a hearing every six months in a probate matter, this would be wasteful and unnecessary.

    Rule 19 (C): I am in 100% support of this provision. I believe this practice represents a professional conflict of interest and should not be permitted.

    Rule 22 (D)(2): I do not understand the intent of restricting the fiduciary’s ability to lease real estate owned by the estate for more than one year. Negotiating a long lease to ensure long-term cash flow may be advantageous to the estate and should be left up to the fiduciary’s discretion with approval of the court. I recommend striking the “leased for more than one year” clause from this rule. The statutes cannot anticipate individual circumstances and the court should be allowed discretion in determining what makes sense for the estate.




    Rule 26 (E): The timeframe for recording letters “in all counties where the estate owns real property” within 30 days is unreasonably short or should be restricted to “where it can reasonably determined that the estate owns real property”. There are times in which we don’t even know real property is owned by an estate until the annual tax notice is sent. In spite of due diligence searches, property can be owned in former names that we aren’t aware of or there are misspellings or errors in the public record that inhibit discovery and marshaling. Additionally, it should clarify that it is not a violation if the state in which the county is situated does not record foreign letters of appointment or outline what steps must be taken if that is the case, because this has been a situation I have encountered at least once in practice.

    Rule 26.1: I support this procedure as it ensures that there is transparency in the appointment process.
    Rule 27.1: I strongly support training requirements of all parties involved in the process, especially in cases in which the court is passing over a licensed, trained professional in favor of someone with no experience in the probate arena which, as outlined above, often sharply increases costs and risks to the protected person while attempting to avoid the same.

    Rule 29.2: I strongly support this proposal. I would encourage fiduciaries to cooperate with parties to the fullest degree, but we have all had cases where we are responding to redundant requests and attempts to re-open disputes regarding matters that have been settled, explained, etc. with damage to the protected estate resulting.

    Rule 30 (C)(1): The courts have been inconsistent in requirements for submission of annual guardian reports. There should be consistency. However, the cases that were initiated before this rule goes into effect should be exempt from any new calendaring requirements, to cut down on administrative costs required in reviewing files and implementing new filing deadlines. I have cases on which I am ordered to submit an annual report of guardian that covers a 9-month period, but that is to be filed three months later than the reporting period. This seems contrary to the purpose of an annual report of guardian. Cases can change rapidly and circumstances can change in a 3-month period. The annual report of guardian should summarize the prior year and provide a current status of the ward. The requirement should be that the report be submitted on or before the anniversary date and should provide the current status of the ward as of the date of preparation of the report, not to exceed 1 month prior to the date of filing.

    Rule 30 (D)(4) “Version 2 – Triage Program B”: If the investigator finds an increased risk with a proposed appointee, that could be good cause for appointing an alternative person with lower priority; therefore, why should it be inadmissible in evidence? Risk may be lowered and monitoring unnecessary with an alternative appointee. I recommend striking this provision.

    Rule 30.1 (A): Medical costs, including costs of long term care, are generally the highest costs to the estate. Excluding them, with the other expenses being limited to what “can be reasonably known” makes estimates highly subjective and potentially misleading and ineffective, opening the door to objections. Additionally, most costs cannot be known prior to appointment. I recommend requiring “good faith estimates” be required not of the petitioner, but rather of the conservator the time of filing the conservator’s initial inventory, within 90 days of appointment, and not with the initial petition. The petitioner is in no legal position to know or discover this information. Additionally, I recommend changing the wording “shall be incurred by a conservator” to “shall be incurred by the protected person’s estate”.

    Rule 30.2 (B): Recommended revision:
    “After a GUARDIAN AND/OR conservator AND/OR A GUARDIAN AD LITEM is appointed …”
    Rule 30.3 Regarding estimated life spans: Appointees in probate matters are not qualified, nor are they required by law or standards of practice to be qualified, in estimating life expectancy. If this is a consideration imposed on appointees, there should be a prescribed manner of making such a determination that does not require the appointee’s own knowledge or expertise. I recommend rather that any requirements to calculate and estimate lifespan be stricken from this proposal. It is also not clear in section (A) when the conservator shall make the required disclosure if a conservatorship is not sustainable; a timeframe should be included.

    Rule 30.4 (D): I see this as potentially a very costly requirement. A ten percent or two thousand dollar variation may cost much more in attorneys and hearing times than the actual variation in budget. I recommend either striking this requirement or, in the alternative, making the triggering budget variation amount or percentage significantly higher than $2000 or 10%. The real-life scenarios outlined by my colleague are accurate:

    “If I have a client who is in assisted living, had a fall and breaks her hip and requires placement in a skilled nursing facility that is going to cause an increase in the budget by more than ten percent or two thousand dollars. Will that make a difference in how I manage the case? Of course not as the best interest of the ward/protected person is what take precedent. Or what if the air conditioning unit goes out on the home owned and lived in by my client. I have only estimated $2,000 for the year for household expenses and now I must expend $5,000 for a new air conditioning unit. How is it beneficial to the ward/protected person for me to update the budget and for my attorney to file that with the court and notice all parties? A $5,000 air conditioning unit now just cost the ward/protected person $6,000 due to the additional administrative expenses.” – Lisa Price


    Fee Guidelines:

    In general, I support any clarification on what fees can be reasonably charged and what factors can and should be considered by the court in determining reasonableness of fees and responding to objections regarding fees.

    Proposed rule 3 (“Points of Reference”):

    #1: Four hours per month is an unreasonably low point of reference for a complex matter/large estate with complex assets. I have seen complex brokerage account statements that take 1-2 hours each to reconcile.
    #3: The Fiduciary Code of Conduct mandates that a licensed fiduciary serving as guardian visit the ward “as often as is necessary to uphold the ward’s best interest.” There have been many situations in my years in practice which intensive hands-on advocacy and meetings with the protected person and his or her family, caregivers, friends, etc. were required weekly or even daily until a situation was resolved. The fiduciary should not be constrained from visiting, charging professional fees for visits, or ordered to disgorge fees for conducting visits in complying with the code of conduct and/or upholding the ward’s best interest. I recommend striking section #3 in its entirety.

    #4: Five hours per year is an unreasonably low guideline for a complex matter, especially if the fiduciary is required to revise the budget and appear in court every time the budget varies by 10% or $2000. I would double this to ten hours.

    #5: Two hours per year to request a physicians’ report, review a year’s worth of documentation, and prepare an extensive report to the court is unreasonably low as a guideline. I would double this to four hours.

    #9: The factors that would trigger this provision can be entirely outside of the control of the fiduciary. Fiduciaries are not qualified or trained, nor do they have any expertise that would equip them to accurately anticipate the lifespan of the protected person. I recommend rewording this to read “IF IT CAN BE REASONABLY DETERMINED THAT the total amount of all annual expenditures, including reasonable professional fees MAY DEPLETE THE ESTATE: THE CONSERVATOR SHALL DISCLOSE WHETHER the conservatorship has an alternative objective …”


    Section 4 (F): Again, I will endorse the comments of my colleague:

    “Regarding the delegation of duties to another individual. I agree that all fiduciaries (and attorneys) should delegate tasks to other staff whenever possible to conserve fees. … as licensed fiduciaries our Code of Conduct contained in Arizona Code of Judicial Administration §7-202 limits our ability to delegate a number of tasks to non-licensed staff. Additionally, while not explicitly written in the ACJA, many fiduciaries have reported findings on audits when they delegate tasks to non-licensed staff.

    Recommendation: The best way to handle fee disputes is to simply use the findings of Sleeth v.
    Sleeth, all of which are currently contained in statute, rule or case law and were simply
    consolidated into one case.”
    Regarding Proposed Mandatory Forms:

    Most of these forms apply to conservators, while my practice with regard to court-appointed matters is limited to guardianship. However, the consistent feedback I have received from my colleagues and attorneys involved in conservatorship matters is that the time expended completing the forms will result in significant increase in fees to the protected person’s estate. While they are intended to increase transparency, most of them seem overly complex such that they will not achieve the intended result of giving a thumbnail sketch to parties and the court, and instead will lead to increased time expended on the part of all parties in both reviewing and completing the forms.

    One particular comment I have on forms is to make an analogy to the previously adopted “Order to Guardian”. This form effective January 1, 2009, for the first time ever required that guardians of incapacitated adults obtain “certified” letters of guardian. There is no practical reason to expend $26 to obtain certified letters of guardian and this requirement has resulted in what I believe to be unnecessary costs of administration. While the conservator has good reasons in practice to be required to obtain certified letters, I have never encountered a medical provider who required anything more than a conformed copy. I recommend careful re-consideration of all forms and a cost-benefit analysis of each one before final implementation. Just as there is no direct benefit to my wards from having a $26 set of letters in my file, there may not be any direct benefit to the estate from requiring a fiduciary to spend dozens of hours filling out complicated new forms that are incomprehensible to the majority of parties entitled to notice.

    Thank you for your consideration of my comments.


    Maureen L. Edwards
    Principal, Licensed Fiduciary
    Maureen L. Edwards, L.L.C.
    JSBloss
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    21 Sep 2011 11:37 PM
    Jeanette S. Bloss
    7959 S. Muddy Creek Dr.
    Tucson, AZ 85747
    (520) 405-6485
    jsbloss@cox.net
    Licensed Fiduciary #20603

    I have proudly served the Pima County community as a probate and trust paralegal for over 23 years, a licensed fiduciary for the last 3 years and as a court investigator during this past year. I have reviewed the proposed probate rules and given them consideration in each of those capacities.

    Allow me to preface my comments by complimenting the Committee on Improving Judicial Oversight and Processing of Probate Matters. Their task was daunting and I commend all those who participated for their hard work and dedication.

    Many of the rules and corresponding legislation are welcomed and provide Arizona legal and fiduciary professionals with the opportunity to better serve the minority, elderly and special needs communities. However, I have concerns over the implementation of specific proposed rules and forms, believing they will only serve to create expense and inefficiency in guardianship and conservatorship proceedings, without resolving the problems that they were likely intended to address.

    Proposed Rule 30.1 regarding the submission of a Good Faith Estimate with a petition for the appointment of a conservator does not appear to serve the best interest of the proposed ward, due in large part to the inability of petitioners and proposed fiduciaries to access the records necessary to reasonably complete that estimate. It is understood that it is only to be viewed as an “estimate”. However, in light of the fact that the estate’s Inventory, along with other schedules being proposed, including a budget, must be filed with 90 days of appointment, it would appear that the ward is better served and time more efficiently spent on the accurate preparation those documents. Relying on accurate information obtained soon after appointment provides the Court and others with truly useful information, versus estimating any figures at the onset.

    I do agree that disclosing basic information about the hourly rates to be charged by involved individuals at the time a petition is filed is appropriate and will help the Court control legal and fiduciary expenses.

    Proposed Rule 30.3 implements a sustainability review procedure for all conservatorship estates. It is my opinion that the undertaking of this task and the preparation of the corresponding form is redundant of the budget requirement suggested in proposed Rule 30.4. An option to this rule would be to provide fiduciaries, professional and non-professionals alike, criteria as to what is to be included in the budget. A proper budget would include the comparison of assets and income to debts and expenses.

    The controversial element of Rule 30.3 is the inclusion of a projected lifespan of the ward. How is a fiduciary expected to reasonably estimate this projected? How is the ward going to feel when a newly appointed conservator discloses to the Court and all those entitled to notice what he or she thinks the lifespan of the ward might be? Estimating this type of information does not appear to be in the best interest of the ward’s health, mental being, or conducive to the relationship of the ward and fiduciary. A fiduciary has the duty to preserve and use the ward’s estate pursuant to Arizona law, which includes planning appropriately if it appears public assistance may be necessary in the future. Attempting to estimate and disclose a ward’s life expectancy as a part of the process could potential cause more harm than good.

    The proposed changes to Rule 38 require that Forms 5 through 10 must be used in their exact form. I have helped the Pima County Bar Association over the past couple of years with updating the probate forms available to the general community and have heard their comments as to the difficulties the common person has using the forms currently in place. The proposed forms have been drafted with the intention of making them easy to use (i.e. one form being used for several purposes and/or stages of administration), but it is my opinion that the result is not of ease, but confusion. Most professionals will likely be able to learn and incorporate the use of the proposed forms, but the non-professional fiduciaries, especially those serving pro per, are going to struggle and ultimately cause more confusion at the court level, create a burden on court personnel, and delay proceedings.

    The proposed account forms will also cause additional preparation time to be spent and increase the volume of documentation required with each filing. The additional expense of doing so, without providing useful information to the Court or involved parties, does not appear to be beneficial to either the ward or the Court. As an example: The Statement of Receipts and Disbursements, line 9, requires the conservator to anticipate and estimate sale proceeds of a residence or stock investment, if there is the potential that a sale may be required. I do not see how the expense or time required in providing this type of guesswork would be useful in reviewing the accounting of the ward’s estate.

    Conservatorship account reports need to be factual in nature and not based upon assumptions and estimates. In the past, account reports have taken on the nature of providing subtotals as to income and expenses, and gave an overview of asset transactions and values. These reports were supplemented by financial institution statements or other documents supporting the ending value of each asset. The proposed account forms require three (3) separate schedules to be prepared, including the sustainability report previously mentioned, plus the financial institution statements, plus supporting detail for the subtotals given on the first three (3) schedules, plus a full transaction report for every transaction that transpired during the accounting period. As a result, each account report will be very voluminous and time consuming to prepare and file. Additionally, copies of all of the foregoing must be provided to the parties involved in the matter, which further creates additional cost to the ward’s estate. Finally, considering the number of conservatorship cases opened each year in the State of Arizona, is it practical to expect the Court to be able to review and rule upon these voluminous account reports in a timely fashion, on a regular basis?

    I understand the intention of the proposed forms and the desire to have full disclosure of financial information in a conservatorship estate. I agree that transparency in these matters is essential and can alleviate many of the past judicial and administrative problems. However, I believe transparency and disclosure can be achieved in a more efficient manner. While well intentioned, the format and instructions of the proposed forms create an undue burden to the ward, the fiduciary and the court.

    I support the adoption of statewide account report forms, but recommend that they be simplified and take on the format commonly used in Pima County, with certain attachments being required. This format typically provides a reconciliation of the assets, disclosure of liabilities and subtotaled summaries of receipts and disbursements. The requirement to attach an annual budget and supporting statements for ending values is appropriate, but the requirement for transaction logs and the sustainability of the estate should only be at the Court’s request. In doing so the intended purpose of an account report is achieved, without placing a burden on either the ward’s estate, the fiduciary or the Court.

    Finally, I am pleased to hear that Court Investigators will receive additional training and support the idea of follow up investigations in certain cases. However, in reviewing the Risk Assessment form being proposed, I am concerned as to the additional investigative time that will be required in order to accurately complete the assessment. Many guardianship and conservatorship cases cannot afford to pay court appointed individuals and we are asked to seek payment from the county. The additional hours required will increase the cost to either the ward’s estate or the county. There are certain areas on the assessment form that are already addressed by other filings, such as the Proposed Appointee’s Affidavit. Perhaps eliminating certain redundancies among the required documents would be helpful in reducing a portion of the cost of the overall preparation of said documents.

    Thank you for the opportunity to submit comments regarding the proposed probate rule changes.

    Jeanette S. Bloss

    CaroleCollins
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    22 Sep 2011 11:25 AM
    Carole Collins
    Licensed Fiduciary No. 20576
    P. O. Box 151
    Kingman, AZ 86402
    (928) 530-1266
    smlcarole@citlink.net

    First, let me compliment all of you on your hard work and efforts to protect our most vulnerable citizens. The following are my comments and concerns regarding the proposed rule changes.

    RULE 10.1 The amendment to allow fiduciaries to file prepare and file legal documents without being a legal document prepare needs to be expanded to allow fiduciaries to prepare and file all documents provided to pro per litigants in the justice courts of Arizona. Currently attorneys are not allowed to participate in small claims proceedings and any matter under $10,000 is subject to the jurisdiction of the justice courts. In general it is not economical to retain an attorney to handle any collection or eviction action subject to the jurisdiction of the justice courts. Allowing a fiduciary to file suit in small claims or justice court without an attorney for an eviction or say a collection of a debt from a family member only makes sense. The forms are provided over the counter or on line and are easily filled in by pro per litigants. If an answer is filed, the parties are often sent to mandatory arbitration. Allowing a fiduciary to handle this without an attorney would result in a few hours of billable time at the fiduciary rate which just might result in a judgment which benefits the ward’s estate. Having to pay attorney fees for preparation of the pleadings in a justice court action on the other hand is cost prohibitive and therefore often not pursued.

    RULE 19. I do not have any objection per se but am concerned how the court will appoint counsel. Mohave County only has a handful of attorneys who practice in this field. Will we be generating a pool to have attorneys selected on a rotating basis such as arbitrators are chosen? That may result in the appointment of attorneys who have no elder care or estate experience and thus the fees may substantially increase. In addition most of these cases are time sensitive in that the ward is usually in a crisis mode on the initial filing and a serious delay could result if an attorney is not familiar with this type of law. This needs to be revisited to insure there are no delays in time sensitive proceedings or attorney fees resulting from the appointment of an attorney who has to come up to speed in this field.

    RULE 22. Add language to allow a conservator to petition the Court to allow funds to be invested in a brokerage account upon court approval. The estate may very well benefit from a professional asset manager in certain cases and the prudent investor rule requires that all avenues be explored.

    RULE 30.1(A)(B)(C). Requiring a petitioner to provide a good faith estimate of all projected monthly and annual costs at the time of the initial filing for appointment is impossible for most private or public fiduciaries. As opposed to a family member we are walking into the situation cold and usually on a crisis basis. Most of us are only meeting the ward for the first time on a referral. There have been occasions where I have been appointed from the bench with no prior involvement when it is a contested matter. How does this rule affect that situation? A private or public fiduciary does not have the benefit of time on their hands and usually has no access to information, financial or medical, until after we are appointed. Strike Rule 30.1 in its entirety.

    RULE 30.3 Strike this rule in its entirety. A fiduciary does not have a crystal ball and few, if any, are actuaries. We do the best we can with the information at hand on the initial case acceptance.

    RULE 30.4. While I appreciate the intent of this Rule, I object and request that it be struck in its entirety. While conservatorships comprise only 20% of my practice, I have handled enough of them to know you cannot project the unexpected. We already have policies and rules in place regarding decision making and best interest of the ward. It is my policy to notify a Ward’s attorney and guardian of any unexpected costs. That avoids it becoming an issue down the road at an annual accounting. I normally send out interim spreadsheets so the ward’s attorney, the guardian, and the ward, if appropriate, are aware of where the ward stands and can see how the expenditures are running. This is only common sense and good business practice.

    Requiring an amendment to the budget to be filed is simply a fee generator as written. Strike Rule 30.4 in its entirely or amend it to only require an amendment if the attorney, fiduciary or administrative fees increase the budgeted amount by 10% or $2,000.

    FEE GUIDELINES. While I appreciate the intent and the work that has gone into the proposed fee guidelines, I do not believe these rules should be enacted. We already have rules in place regarding the reasonableness of fees. This is more a matter of training of our judiciary and attorneys.

    PROPOSED MANDATORY FORMS: These mandatory forms are overly complex. Keep in mind that we are already doing an annual accounting and, in most cases, representative payee reports. These report forms all differ and need to be simplified to avoid increased fees to the Ward. The forms are also going to impact courts and their staffing in terms of budgeting for the training and monitoring of the proper completion of these complex forms.

    Thank you for your consideration of my comments.


    hbull@conditandassoc.com
    Posts:

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    22 Sep 2011 01:06 PM
    Heather Winters Bull, BA, NCG, LF#20401
    Vice President of Fiduciary Services for Condit and Associates LLC #20597
    13912 W. Stardust Blvd. #200
    Sun City West, AZ 85375
    hbull@conditandassoc.com

    As a practicing fiduciary, I believe that many of the proposed rule changes and statutory changes are effective in providing increased protection for our vulnerable population. I would like to comment on only those proposed changes that I feel are counterproductive to this mutual goal.

    RULE 10.C.1.b DUTIES OWED TO COURT
    REFRAIN FROM CHARGING TO ATTEND COURT PROCEEDINGS…UNLESS SUCH ATTENDANCE IS REQUIRED BY LAW, COURT ORDER OR OTHER CIRCUMSTANCES… A licensed fiduciary is otherwise required by our code of conduct, and any unlicensed fiduciary may present other circumstances that require their attendance; therefore, this clause is unenforceable as written and provides no actual benefit to the ward. Further, allowing any one to be represented in court without counsel is just simply dangerous and counterproductive to our legal system.

    RULE 22.C.2. RESTRICTED ACCOUNTS
    If a restriction is ordered… THE ORDER… AND ANY LETTERS THAT ISSUE SHALL CONTAIN THE FOLLOWING LANGUAGE: “FUNDS SHALL BE DEPOSITED INTO AN INTEREST BEARING, FEDERALLY INSURED RESTRICTED ACCOUNT AT A FINANCIAL INSTITUTION ENGAGED IN BUSINESS IN ARIZONA.” This would preclude the court from restricting ANY assets that are not FDIC insured bank accounts, ie. any bank account above $250,000, brokerage accounts, stocks or any assets held outside the state of Arizona. I don’t believe it was the courts intention to force a ward’s restricted assets in to bank accounts only, or to restrict the court’s ability to restrict non bank account assets. I recommend striking this language entirely and just simply requiring any and all restrictions to be noted on the Order and Letters.

    RULE 30.1 GOOD FAITH ESTIMATE
    PETITION TO APPOINT A CONSERVATOR SHALL BE ACCOMPANIED BY A GOOD FAITH ESTIMATE OF ALL PROJECTED MONTHLY AND ANNUAL COSTS THAT SHALL BE INCURRED BY A CONSERVATOR, EXCEPT MEDICAL COSTS, TO THE EXTENT THE INFORMATION CAN BE REASONABLY KNOWN: This rule change has been widely debated, due to the fact that all of the information necessary to provide an accurate estimate is simply NOT available to the fiduciary pre-appointment and obtaining that information may constitute a violation of a person’s due process, privacy and HIPPAA protections. Further, Rule 30.1.C. allows for the fiduciary to not provide the information if it is not ascertainable at the time. Most petitioners will simply state in their petitions that the information was not attainable.

    The Estimate provides the same information to the court that would be contained in the Budget addressed in proposed Rule 30.4 that would be required at the time of the Inventory. If there are any objections to the estimates provided at the time of the Inventory, the fiduciary could be simply substituted at that time.

    RULE 30.2.B. FINANCIAL ORDER
    AFTER A CONSERVATOR IS APPOINTED, THE COURT MAY DISCHARGE THE PROTECTED PERSON’S ATTORNEY…. UNTIL DISCHARGED, THE PROTECTED PERSON’S ATTORNEY HAS A CONTINUING DUTY TO REVIEW THE CONSERVATORS INVENTORY, BUDGETS AND ACCOUNTS…” Why would the court want to discharge the protected person’s attorney when they are initially required to play a vital role in the protection of the ward. In some cases, the ward’s counsel is the ONLY person advocating for the ward’s interests aside from the fiduciary’s interest. If the court wants to provide protection for the ward, the ward’s attorney should never be discharged. I support the language requiring the attorney to review the documents filed by the fiduciary, as I believe their role is not clearly defined, but I recommend striking the language regarding discharge.

    RULE 30.3 SUSTAINABILITY OF CONSERVATORSHIP
    As a practicing fiduciary, I routinely prepare a projection of my client’s estate to determine a budget, and to estimate if or when the client will run out of funds to support their care. I believe the proposed form could be a useful tool for fiduciaries that do not already project this outcome. However, the concept of applying a life expectancy calculation does not change the outcome of this projection. And, it is dangerous to suggest that a client’s needs be compromised by their ability to pay. Further, if my projections indicate that a ward will run out of money in 10 years, but their projected lifespan is 20 years, it is unreasonable to expect the fiduciary to determine now what the management plan will be for this ward 10 years from now.

    RULE 30.4 CONSERVATORS ESTATE BUDGET
    I support the requirement for a Budget. I believe the most effective fiduciaries are already doing this. However, the Conservator does not have control over all excesses to the Budget because emergencies, both medical and financial arise all the time and to require any changes to be filed with the court only adds to the costs for the ward and does not provide any useful benefit in cases when the emergency necessitated the increase in cost and any objection to the excess is moot.

    Pursuant to the Prudent Management of Costs - Rule 10 and our code of conduct requiring same, fiduciaries must justify all expenditures as reasonable and for the benefit of the protected person. Reporting these expenditures to the court in addition to the annual accounting is superfluous and expensive.

    RULE 38: FORMS
    It is not clear to me why these categorical forms are presented as an alternative to the transactional reporting that is already required by the court. I have been preparing court accountings for over 15 years, served as a contract probate court accountant for two years and have been contracted to prepare accountings for numerous persons serving in a fiduciary capacity. It has been my experience that most non-licensed persons (which comprise over 90% of the persons serving as conservators, trustees and personal representatives) have difficulty with the current reporting requirements and require the services of fiduciaries, attorneys and CPA’s to prepare the seven accounting schedules currently required in Maricopa County. The complexity of the proposed forms exponentially increases the difficulty these non-professional fiduciaries will encounter, which will result in increased costs that will inevitably be a burden on the ward’s estates.

    Further, while the current seven schedule format in Maricopa County does not conform to accepted accounting practices, it is simplified enough for the average fiduciary to report all transactions and valuations that exist in the accounting of any estate.

    Further, transactional reporting is easy to audit and reconcile. And more importantly, transactional reporting clearly presents patterns of misuse of funds, that categorical summary reporting simply does not. For example, if I present a lump sum total for utilities for the year. It is impossible to determine that the conservator paid both her own utilities as well as her wards. But if that information is presented in a transactional format that reconciles with a bank statement, it is more difficult for the fraudulent activity to be covered up.

    Summary reporting makes it easier to conceal assets. For example, if a ward owns two stocks and one stock significantly increase in value, and the second stock was actually sold and the proceeds deposited to the conservators personal account, the conservator could report the summary total for stocks as a gain to the estate. Since the conservator is only reporting a total value for all stocks, and the reports reflect a net gain, the fact that one stock was essentially stolen would not be apparent to the court. Transactional reporting requires the conservator to report both categorically and chronologically of what happened to every single asset during the accounting period.

    The oversimplification of categories of expenses also renders these figures wide open to interpretation. From an auditing stand point categorical summary reporting makes reconciling these numbers to the actual transactions more difficult and time consuming and is likely to cause additional court accountant reports and recommendations just to clarify summary figures. This will not only be more burdensome to the court, but also an increased cost to the ward.

    The Forms state that Supporting Detail is required for each schedule; however, the instructions do not define what supporting detail is required and how it should relate to the Schedules. The Forms further state that a “Transaction Log detailing all financial transactions during the current reporting period, reported by category”, be included with the report. However, the instructions that accompany each form do not contain any instructions regarding the format or requirements of this transactional log. For example, should the log reconcile with the amounts reported on the Schedule, should the log be chronological as well as categorical, should the log include all assets that have changed in value, ie. market adjustments for real property, or gains or losses on investments.

    In Summary, not only are these forms too complex for the average person which makes reporting compliance far more expensive to the ward, but they also allow for malfeasance to be more easily concealed. The court should be most concerned that this summary format may facilitate concealment of wrongdoing.


    Thank you for this opportunity to provide my comments to the proposed changes.

    Sincerely,

    Heather Winters Bull, BA, NCG, LF#20401
    Vice President of Fiduciary Services for Condit and Associates LLC #20597


    pwalsma
    Posts:

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    22 Sep 2011 01:07 PM
    Pamela Walsma
    833 E. Plaza Circle, Suite 200
    Yuma, AZ 85365-2017
    (928) 783-8321 phone
    (928) 782-2310 fax
    pwalsma@yumalawfirm.com
    State Bar No. 013112

    Several members of the Arizona Bar namely, Bruce Jensen, Pamela Walsma, Jeanne Vatterrott-Gale, Harry Longbottom, Jason Moyes, Wade Noble and Alicia Aguirre who practice regularly in probate matters in Yuma County, Arizona, the Yuma County Public Fiduciary, Candy Wheeler-Ruby, and the court-appointed investigator in Yuma County, Kim Conde, met on several occasions to review and discuss the proposed changes to the Arizona Rules of Probate Procedure. We agree some of the changes will have a positive effect on protected persons and wards. However, many of the changes will negatively impact those they are intended to protect and cost more than they are worth..

    It is our belief the current system and rules as applied in Yuma County are effective. We have a system that works well to protect those in need. Most of the additional court oversight provided and addressed in the changes is already within the purview of the Superior Court. We have serious concerns regarding whether the increased cost required by the changes will have any significant benefit to the vast majority of wards and protected persons.

    We ask the Court to consider that many of the changes will apply to all but benefit relatively few. In most guardianships and conservatorships, families struggle to do their best to provide for the needs of their family members. They care for protected persons often while working, raising their own families and making many sacrifices of time and effort. The requirements of the new rules will increase the burden on the caretaking family members. As a group of practitioners with many years of experience, we strongly believe that many of the proposed rules were a reaction to a few extraordinary situations and will result in an unjustifiable cost burden on ordinary Arizona families.

    We have reviewed the comments being submitted by the Yuma County Public Fiduciary’s office. We firmly support and join in those comments. Several of us also reviewed the comment posted by Craig Wisnom. As a group we agree with his comments and ask that they be given fullest consideration.

    We submit the following comments to the proposed rules:

    1) Many of the proposed changes including but not limited to the budgeting requirements, sustainability requirements, new accounting formats and additional duties of the court investigator will substantially increase costs for protected persons and will dissuade pro per family members from filing conservatorships in Yuma County. Generally the current cost for filing a guardianship/conservatorship utilizing the service of a private attorney, runs from $3,000 to $3,500 (which sum includes court filing fees, personal service costs, court appointed attorney and investigator fees and fees for the Petitioner’s attorney). We estimate that under the new rules, the typical costs will exceed $5,000 per case.

    2) The proposed requirements will generate more difficulties for pro per family members in accessing the courts and will reduce their ability to comply with the significantly increased requirements which come in addition to the day-to-day services they provide to their sick or disabled family member.

    3) These difficulties will keep more and more cases out of court. It is our experience that the vast majority of cases involving financial abuse are in fact not brought before the court for the appointment of a guardian and conservator or if the matter does come before the court, it is after all of the funds have been dissipated and wasted. Making the system more difficult, more complex and more costly will result in more cases in which there is no court oversight or assistance from attorneys to help guardians and conservators comply with the legal requirements. The less oversight, the greater the likelihood of abuse and dissipation of assets.

    4) We believe our courts already have the authority to require budgets, sustainability reports and status reports regarding costs and litigation matters. Our judges already review attorney and fiduciary fees and expenditures.

    5) The proposed budgets and accounting forms will require the use of computer programs such as Quicken and Quick Books which are not feasible for many pro per conservators. Not all conservators have or are able to utilize computers and even those with computers cannot all master Quicken or Quick Books. Compliance with the reports will require the use of an accountant, document preparer, bookkeeper or attorney, further increasing costs to the protected person and stress for the conservator.

    6) The increased requirements will result in the inability of the well-intentioned family members to comply with the additional requirements and will increase the use of the Public Fiduciary’s office which will in turn increase the costs to Yuma County.
    tcurti
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    22 Sep 2011 02:42 PM
    Thomas A. Curti, Esq.
    330 N. Granada Avenue
    Tucson, AZ 85701
    curti@flemingandcurti.com
    520-622-0400
    FAX 520-203-0240


    Proposed Rule 30.1 A.B.C. requires the fiduciary to insert a good faith estimate of all projected monthly and annual costs, except medical costs, in the initial petition. If this information cannot be found the Petition must state all the efforts that have been made to obtain the information and this information is to be updated five days prior to the hearing.

    This requirement will add considerable expense to every case, whether the assets are $40,000 or $4 Million. The Conservator must search for the information prior to the filing of the Petition, update it prior to the hearing, and relay it to the attorney. The attorney will have to insert the information in the Petition and likely have to update it prior to the hearing. Most of this information will not be available as the proposed protected person is incapacitated or uncooperative and the financial institution should not release it for privacy reasons prior to the appointment of a Conservator. Substantial expense will be incurred in every case without any significant verifiable information added to the Petition. If the information cannot be located this too must be reported with absolutely no additional information being provided to the interested parties. Hundreds of dollars of expense will be added to every Petition.

    This rule will result in a delay in filing many Petitions. If there exists a need for a Conservator the Petition should be filed with as little delay as possible as every delay may be detrimental to the proposed protected person. Finally the rule, as proposed, could be used by persons not entitled to financial information to obtain protected information.

    It appears the major intent of this rule is to make the the Court and the family aware of the prospective charges of the fiduciary and their attorney. This is valuable information which is available at the time of the filing of the Petition and can be inserted in the Petition without any additional expense to the estate. This will avoid a blanket added expense to every Conservator Petition. Adequate protection will still be provided to the estate at the time of the appointment by the posting of the statutorily required bond. If the rule is adopted it should only require disclosure of the fees to be charged by the Guardian/Conservator and their attorney.

    Thank you for the opportunity for comment.
    Candy
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    22 Sep 2011 02:49 PM
    Candy Wheeler-Ruby
    Yuma County Public Fiduciary
    3007 S. Pacific Avenue
    Yuma, Arizona 85365
    (928)373-1145
    Candy.Wheeler-Ruby@yumacountyaz.gov
    License # 20009

    COMMENTS TO PROPOSED AMENDMENTS TO THE
    ARIZONA RULES OF PROBATE PROCEDURES


    Rule 8:

    Concern: You cannot be appointed on a case unless proper service has been done. Therefore, I do not understand the reason for this rule. I believe this would also require the County Clerk of the Court to have some system where they can track this. I am not aware if all of the rural counties have the tracking system to implement this. I have spoken to the Yuma County Clerk of the Court and she stated she was unaware of these rules and how they would affect her office. Please take this into consideration prior to approving this rule.

    Recommendation: Without further information as to why this rule is necessary and whether all the County Clerk of the Courts can implement this rule, I would ask to have this section stricken.

    Rule 10:

    Concern: As I alone am responsible for my Ward and the decisions made for my Ward, all court proceedings are necessary for me to attend. It would be in the best interest of my Ward for me to be there. My Ward should have representation at any and all court proceedings. We do schedule non-appearance hearings when allowed by the court but if there is a hearing scheduled I would never assume I am not needed there and in fact believe are Judges would not be happy if I did not appear. I understand the concern of reducing costs to our Wards but as Fiduciaries we also have to protect our Ward’s rights. This is not an appropriate way to reduce costs.

    Recommendation: This section should be stricken in its entirety.

    Rule 10(F) 1-2:

    Concern: Yuma County currently has one Court Investigator for the whole County. I have spoken with him and he agrees with this rule. His only concern and mine is how often will the training for certification be held, where will it be held, who will offer the training and at what cost. He and I have the same concerns regarding the subsequent training. I am concerned we will not have all the answers before this is moved forward. We are very lucky in Yuma County. The investigator charges much less than most investigators in the other Counties. Depending on the answer to these questions it could increase the Investigators operating cost which in turn would be an increased cost to the ward. In the case of the Yuma County Public Fiduciary office if the Ward can’t pay the cost then the County pays for this service. Yuma County would be unable to increase the budget to absorb this expense.

    Recommendation: Please clarify this rule prior to agreeing to implement.

    Rule 10.1(A):

    Concern: The Yuma County Public Fiduciary prepares and files the Annual Accounting Petitions and Motion for Discharge for our Wards. They are prepared by staff and sent to the attorney for approval. If they are right he signs off on them and the Public Fiduciary office files them with the court. Yuma County is unique as we are not represented in probate cases by the County Attorney. We use private counsel. If this rule is implemented it would increase cost to the Ward of approximately a $1,000.00 per Ward, per year and if the Ward can’t pay this cost, it would be a cost to the County. I have estimated if this rule is passed it would be an increased cost to the County of approximately $50,000.00.

    Recommendation: Allow Fiduciaries to submit and prepare pleadings if assets and income are under a specific amount and are reviewed and signed by the Petitioner’s attorney.

    Rule 10.1(C):

    Concern: My attorney files a motion in order for me to appear alone. The filing of the motion could cost more than if the attorney just came to the hearing. However, if he does file the motion and I go to court alone and a person shows up and objects to the petition, I am now there without representation. This would be a disservice to my Ward and a liability to the County. If the reason for this rule is to decrease attorneys cost, this is not the way to do it. Most attorney cost come from disputed cases that would require the attorney to be there.

    Recommendation: The way to reduce cost would be for the Judge to review attorney expenses decide if they are reasonable and if not don’t approve them. If there is fighting amongst family or heirs don’t let it continue hearing after hearing. Settle the case as quickly as possible. There are already rules in place for this.

    Rule 15.2.in its entirety

    Concern: Does the Clerk of the Court have the resources to carry out this rule without needed additional resources. I have spoken with the Yuma County Clerk of the Court and she had not seen or heard of these rule changes until I brought them to her attention. Are we creating a mandate which will cost counties additional resources and if we are where is the funding for this coming?

    Recommendation: Please make sure prior to implementation all counties including the smaller rural counties can meet these needs without additional resources.

    Rule 15.2(C)3:

    Concern: Not all Counties have investigators that work for the court. In Yuma County they would need to hire someone to investigate the reasons for the Guardian’s non-compliance. Who would pay for this? This would be an increased cost to Yuma County. Is there funding that will be giving to the counties to implement this rule.

    Recommendation: Although I think it is a good idea in theory, I would recommend the committee think about how this can be implemented and what the impact will be on the smaller Counties before passing this rule.

    Rule 19(B):

    Concern: Who will assign the court appointed attorney? Will the Clerk of the Court maintain a list and have it be on a rotation bases? What happens if the attorney that is appointed to my Ward is the highest priced attorney in town? I then have to go through the process of Rule 10.2(C), which will increase cost to the Ward and if the Ward can’t pay then it becomes a cost to Yuma County at approximately $60,000.00. An example is we have a very reputable attorney here in Yuma County who is the court appointed attorney for a majority of the Yuma County Public Fiduciary Wards who did not have a prior relationship with an attorney. I have asked other attorneys if they would take the case for the amount he charges and I have not found one that will. Why would I waste the courts time and the Ward’s money if I knew up front no one could be competitive with his rate.

    Recommendation: If the court feels the protected person is not getting adequate counsel or there is an appearance of inappropriate behavior between the parties, the Judge should request counsel and/or the fiduciary be removed from the case.

    Rule 19(C):

    Concern: In most of the rural counties there are a limited amount of Probate Attorneys. This rule could make it very difficult to find adequate representation. As I stated before Yuma County is not represented by the County Attorney we are represented by private counsel. There have been times when the attorney we use on our cases has had a conflict and I have to look for other counsel to represent me. With such a small pool of probate attorneys I have used an attorney who is the court appointed counsel in another case I have. If I wasn’t allowed to do this it would greatly limit my resources and could drive me to hire an attorney who is not as knowledgeable and more costly to the Ward.

    Recommendation: I would again ask that we allow our Judges to make these decisions without a specific court order on every case which increases costs to the Ward. If there is inappropriate behavior the court should remove counsel and/or the fiduciary.

    Rule 27.1(A)(B)

    Concern: Where will these trainings be held, how often, by whom, and at what cost. Will the County Courts bear the cost of these trainings and if so is there funding the County will be receiving or is this another unfunded mandate? Although I agree there needs to be training, I also believe we should do what we can to encourage families to be the Guardian and/or Conservator of their family member. This training could help with this or if not handled correctly could do the opposite.

    Recommendation: Please make sure prior to implementation of this rule it can be carried out by the County Courts and It will be easily accessible by the family members of the incapacitated person.

    Rule 30(B)3

    Concern: The Yuma County Public Fiduciary uses a specific format that was requested by a prior Presiding Judge and is the format that has been used by our office and our local accounting firms when they are asked to prepare an accounting. The format used is very easy to understand and is less cumbersome than the new format. The new format would require us to change all of our computer programs and require a costly amount of work which will not benefit our Wards. We must remember when working with most County Fiduciary offices our Wards are indigent. Some of our Ward’s assets and income can be as low as $5,000.00 a year. This new process will require an increase of cost to the Ward due to the increase in man hours to prepare the new formatted accounting. The new format will require family members to have an accounting system such as quick books and they will have to have on-going access to a computer. This is not feasible in some family administered Conservatorships. This will require families to seek accountants to meet this requirement which only increases cost to the Ward.

    Recommendation: Allow County Fiduciaries and family members to use their current format in cases where the assets and annual income is below a specific amount.

    Rule 30(D)1:

    Concern: Yuma County does not have a Court Investigator who is employed by Superior Court. We use independent investigators. We currently have one independent investigator in Yuma County. I have met with him and he has expressed to me if this rule goes into effect he will increase his fees from $250.00 per case to a minimum of $800.00 per case. This is a significant increase to the Ward and if the Ward appointed to the Public Fiduciary office cannot pay this bill than Yuma County will have to pay this bill. With our current rate of new cases the cost of implementing this rule would be approximately $13,000.00

    Recommendation: Counties who do not have court personnel in place have an option to opted out or phase in once the economy is better and Counties can afford to hire personnel.

    Rule 30(D)2:

    Concern: Again Yuma County does not have personnel in place to implement this rule. The risk assessment form lists the Public Fiduciary as an agency who can provide risk assessment services. Even if only 20% of Yuma County cases needs annual risk assessments to include visitation the number would be close to 400 cases a year, which breaks down to approximately 3 cases per working day. In order to have the time to do the visitation and investigation correctly we would need to increase our staff by a minimum of 1.5 positions. That would be a minimum increase to Yuma County in the amount of $100.000.00. If we use the independent investigator who will pay for these costs? Yuma County?

    Recommendation: Counties who do not have court personnel in place have the option to opt out or phase in once the economy is better and Counties can afford to hire personnel.

    Rule 30(D)4:

    Concern: I don’t understand the reason for this rule. If we have to have a risk assessment, pay for it and file it with the court why would we not use it?

    Recommendation: If we are going to make counties have risk assessments done than the court should be able to review the risk assessment and take this report into consideration when appointing a Guardian/Conservator.

    Rule 30.1

    Concern: At the time of petition we do not have all this information. Nor are we able to verify or ask for information until “Letters” are provided by the court which does not happen until after appointment. If this rule goes into effect I will be giving false or inaccurate information as I am not able to verify the information given to me by a referral source. According to Rule 30.4 we must file a budget with the inventory; this would be an adequate rule.

    Recommendation: Strike this rule
    Rule 30.3:

    Concern: As a Fiduciary we are required to keep our Ward in the least restrictive environment. If I have a Ward who can afford to live at home now but this is not sustainable through her prospective live plan, I am not putting them in a nursing home because it is more cost effective. It is my job to give them the best quality of life. If they out live there assets and income there are state programs to help when they no longer can afford this lifestyle. I am worried this rule will encourage people to be placed in nursing homes prior to their need just so they can meet the objective of this rule. My other concern is why I would need to prepare a form every year which is a cost to my Ward, if there living expenses already exceeds their income and assets and they are on state aid. This would be an unnecessary cost and expense. No matter how you project live expectancy there is no way to be sure. I think it is extremely morbid to submit paperwork to family Members with a life expectancy on it. I do not believe as fiduciaries we should be giving life expectancy numbers.

    Recommendation: This rule needs more clarification in order to prevent premature placement in nursing homes and should have a minimum income, asset amount in order to prevent the need for unnecessary forms which will increase the cost to the Ward. If you require life expectancy numbers it would be best coming from someone in the medical field and not a certified fiduciary.

    Rule 30.4(A-F):

    Concern: This is an unnecessary expense for most cases handled by the Public Fiduciary. Most of our Wards are on state aid, which means they have income and assets that do not meet their monthly expenses. On these state programs they are only allowed to keep a small portion of their monthly income. It would not be cost effect in these cases to prepare and submit a yearly budget.

    Recommendation: Allow for an opt out option if the income and assets are below a certain amount or if the Ward is already on Arizona Long Term Care.

    In closing I have had several meetings with the attorneys in the Yuma probate community and the consensus is the same. We have very good probate procedures in Yuma County. We have come a long way in the last 10 years and I am proud of the system we have now. We believe these rule changes have come about due to negative publicity which was not found in Yuma County. Although it is always a good thing to continue to move forward and improve, these rules are extreme and in fact set the rural Counties up for failure. There are too many changes to be able to be compliant by January 1, 2012. I understand why the committee was formed and what they were tasked with but it seems we are again waiting until the 9th hour to create something which will accommodate those who tasked the committees with these issues. These rules will drive up the costs which will be passed on to either the Ward, or the Counties. These rules will make the system even more cumbersome than it is now which will drive families to look for alternative resources and they will be unable to handle their family members case pro-per. Alternatives such as hiring attorneys in order to get appointed (costly to the Ward and/or County), Private Fiduciaries (more costly to the Ward), Public Fiduciaries (more costly to the Ward and/or the County) or they will simply choose not to go into the court system and there will be no oversight by the court.
    Following are the estimated costs of putting these rules in place:

    General Costs:

    Attorney cost for Petitioning for appointment will go from approximately $2,500.00 per case to $5,000.00 per case.

    Cost increase to Yuma County Public Fiduciary: approximately $60,000.00

    Investigator Fees will go from $250.00 per case to approximately $800.00 per case.

    Rule Specific Costs:

    Rule 10.1(A): Cost to Yuma County Public Fiduciary: approximately $ 50.000.00
    Rule 19(B): Cost to Yuma County Public Fiduciary: approximately $ 60,000.00
    Rule 30(D)1: Cost to Yuma County Public Fiduciary: approximately $ 13,000.00
    Rule 30(D)2: Cost to Yuma County Public Fiduciary or Superior Court: approximately $100,000.00

    Total cost to Yuma County of approximately: $283,000.00

    If this is the increase in cost to the County because the Wards can’t afford to pay for these service it is only fair to say these rules will obviously increase costs to the incapacitated person that can afford to pay. These rule changes rather than keeping costs down and protecting incapacitated individuals they will do the opposite. Due to current economic times this would be a significant financial burden to the Counties, the incapacitated person and their family members.

    I do not believe the Counties will ever be able to conform to one set of rules, we are too different. You cannot compare a major metropolitan area to Yuma County or any other rural County it just doesn’t work. Although some ideas are good such as the different trainings to be provided, I believe we are putting the cart before the horse. There are too many changes without sufficient time or resources to implement them. The training should already be done and the details of who, what, when, where and cost should already be known. My recommendation is to have all the who, what, where, when and who bears the cost figured out before we blindly put rules in place. Maybe these rules need to be phased in a few at a time or with a rural County as a pilot project before we set them in stone. It seems to me the news articles created pandemonium and we need to slow down before we create further pandemonium because the rural counties or at least Yuma County does not have the resources to implement these rules without significant financial hardship. It would be great to think we could all be the same and our probate courts uniformed but each County and each case is by nature different and can never be considered one size fits all.

    Thank you for considering my concerns and recommendations.

    lcomus
    Posts:

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    22 Sep 2011 03:34 PM
    Louis F. Comus, Jr.
    3003 N. Central Avenue, Suite 2600
    Phoenix, AZ 85012
    Telephone: (602) 916-5314
    Facsimile: (602) 916-5514
    Bar Number 003389
    Email: lcomus@fclaw.com
    Attachments
    jcleland
    Posts:

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    22 Sep 2011 03:35 PM
    Jason W. Cleland, CPA
    Jason W. Cleland, CPA, PLC
    67 South Higley Road, Suite 103-491
    Gilbert, Arizona 85296
    480-216-0705
    http://www.FiduciaryCPA.com
    JCleland@FiduciaryCPA.com

    I am a Certified Public Accountant (CPA) and my area expertise is the preparation and review of fiduciary accountings. I have been preparing fiduciary accountings since 1999 and I am currently a Contracted Court Accountant in Maricopa County.

    It was my understanding that one of the main reasons for these proposed changes to the Rules of Probate Procedure is to ensure estates are managed in a more efficient, and therefore, cost effective manner. However; based on my experience from regularly preparing and reviewing fiduciary accountings, I believe some of these proposed changes will in fact increase costs associated with the preparation of accountings and related budgets.

    I have reviewed the proposed accounting forms (Forms 5 - 10) and related instructions and as I was reading them, I thought to myself that it felt like I was reading an Internal Revenue Service instruction booklet. These forms are complex and cumbersome that will not only affect non-licensed fiduciaries, but also licensed fiduciaries. In addition, many of the numerous non-licensed fiduciaries would not be able to understand how to accurately prepare an accounting based on these new forms and instructions. There are numerous family members that act as fiduciaries and cannot follow even the simplified accounting guidelines for probate accounts in Maricopa County. Now with the complexity and increased time burden of these new forms, it’s almost a certainty that these non-licensed fiduciaries will have to hire a CPA or an attorney to prepare an accounting, and therefore, increase the costs to the estate. In addition, if I was hired to prepare an accounting based on these proposed forms, there is no doubt that the time I bill for an accounting will increase significantly.

    Heather Winters Bull’s comments regarding the proposed forms are excellent and are issues that I have thought about as well.

    In summary, I believe these proposed accounting forms and instructions are complex and time consuming to prepare for licensed and non-licensed fiduciaries, and therefore, I believe the costs to the estates will significantly increase as a result of hiring CPAs and attorneys to prepare them.
    AZStateBar
    Posts:

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    22 Sep 2011 04:14 PM
    John Furlong
    General Counsel
    State Bar of Arizona
    4201 N. 24th Street, Suite 200
    Phoenix, AZ 85016-6288
    (602) 252-4824 (phone)
    (602) 271-4930 (fax)
    John.Furlong@staff.azbar.org
    Bar No. 018356
    Attachments
    hbull@conditandassoc.com
    Posts:

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    22 Sep 2011 04:15 PM
    Heather Winters Bull, BA, NCG, LF#20401
    Vice President of Fiduciary Services for Condit and Associates LLC #20597
    13912 W. Stardust Blvd. #200
    Sun City West, AZ 85375
    hbull@conditandassoc.com


    I would like to make an additional comment regarding the proposed Forms... I believe these Forms serve a great purpose for the fiduciary in the effective administration of a ward's estate; however, I don't believe it is the courts role to administer estates. The courts role is to catch people stealing, and the use of these summary forms for court reporting will make that role much harder for the courts.

    -Heather Bull, LF#20401
    Frobinson
    Posts:

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    22 Sep 2011 04:23 PM
    Felicia Robinson
    Northern Arizona Fiduciaries, Inc.
    5301 N. Long Rifle Rd
    Prescott Valley, AZ 86314
    (928) 778-7885 (work)
    (928) 717-9720 (Fax)
    feliciabush@cableone.net

    Rule 22.D.2 “No Realty shall be leased for more than one year, …”
    As leasing a property can increase a ward’s income and leasing can change on a monthly basis, it seems unreasonable to restrict the length of time a property may be leased. If there are concerns in regards to leasing then a property management company can be put in charge of the property lease.

    Rule 30.1 Good Faith Estitmate

    The requirement to compile a good faith estimate before appointment is unreasonable. It would be impossible to gather the required information from banks and other establishments without an order from the court. It would also be a huge invasion and breach of the Ward’s privacy to dig into their personal affairs before they are even found to be incompetent. This rule should be removed in its entirety.

    Rule 30.3 Projected Life Span

    The need to determine how long a ward’s estate will last is understandable, however requesting a projected life span of a ward is not probable. We are not doctors and can not begin to guess what illness may befall a ward and to put a projected life span into a legal document that goes to family members, could cause more problems as they may believe we are being unfair in our assessment. Keep the sustainability table but remove the projected life span and save everyone a lot of grief and misunderstandings.

    Appendix D – Proposed Forms

    The desire to streamline accountings is understandable. Having a 1 page form with 5 pages of instructions however, seems a bit excessive. Most licensed fiduciaries have a set way to do accountings that have been submitted to the court for a long period of time. If the way the accounting is completed is not understandable then the court should require that one professional/company to use the forms. I believe that the forms need to be simplified more for the non-licensed family members or individuals acting as Guardian/Conservator as they will not be able to figure out these forms. I believe these forms should be withdrawn until they can be simplified for anyone to be able to pick up and understand.

    Appendix F -

    F.2.D. Mileage is an acceptable expense per the IRS. There are some professional who travel large distances in state to see their Wards and should be compensated for the mileage on their vehicle as it causes wear and tear. I feel that if the mileage is not allowed to be billed that hourly rates will change to compensate for the loss and may end up costing the Wards more in the long term. I feel that in state mileage should be allowed at the rate designated by the IRS.

    F.2.F&G Clerical and maintenance upkeep of files is a necessary and required task that takes a large amount of time to stay current. These tasks are a part of the fiduciary due diligence to keep files up to date and orderly in case of questions. Clerical work is a necessity in any profession and should be allowed as billable at a lower Clerical rate.

    F.3.D. The estimates of time for different services are unreasonable as every case is different and some take a good amount more time then what is being allowed in these benchmarks. For example there are some clients that require numerous visits monthly due to medical or behavioral issues. Why should a fiduciary have to justify visiting a client who is ill or is in need of numerous visits to help them settle when it is a part of our due diligence to get them back to a stable life as smoothly as possible. With the new forms being submitted until everyone has their systems set up to match up with these forms and make it all easier to transfer over an accounting and budget on a complicated case is going to take more than 5 hours. Even without the new forms some accountings take longer than 5 hours if they are extensive. My recommendation is the board contact fiduciary companies through out the state so that they have some idea how long things take to complete depending on the case and realize that no cases are the same and that if benchmarks are to be set they need to be more reasonable.
    carma866
    Posts:

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    22 Sep 2011 05:04 PM
    Carla M. Jones, LF #20276
    Northern Arizona Fiduciaries, Inc, LF #20198
    101 E. Gurley St., Ste 211
    Prescott, AZ 86301
    928-778-7885
    carlajones@cableone.net
    northernarizonafiduciaries.com


    COMMENTS TO PROPOSED AMENDMENTS TO THE
    ARIZONA RULES OF PROBATE PROCEDURE


    Rule 10, Arizona Rules of Probate Procedure

    Issue: Rule 10(c)(1)(b) implies that a fiduciary shall refrain charging to attend court proceedings, unless it is required by law, court order or other circumstance. While the intention of this change may be to reduce fiduciary fees it will undoubtedly actually increase fiduciary fees. Without testimony from the Petitioner/Fiduciary the court will not have all the information necessary to make a ruling, thus resetting the matter for when the fiduciary can be present to testify. As a licensed fiduciary, I am bound by the Arizona Code of Judicial Administration §7-202(J)(1)(e), which in part states “regardless, the fiduciary alone is ultimately responsible for decisions made on behalf of the ward, protected person, or estate”

    Recommendation: Strike this section in its entirety.

    Concern: Rule 10.1(C) This rule would allow an attorney to file a motion to allow the fiduciary to attend a hearing without counsel. A fiduciary and/or their attorney can justify to the attendance at hearings, if it were an option not to attend a hearing, I feel that this will lead to increased oral objections by other parties if the fiduciary is not present with counsel to defend oral objections and/or fee disputes. In addition, as a general rule a corporation cannot represent itself in court without an attorney. In the case of Boydston v. Strole Development Company 1 CA-CV 96-047 “this court on its own motion dismissed the appeal for we found that the notice of appeal signed by the Stroles lack of jurisdiction. See Rueda v. Galvez, 94 Ariz. 131, 132, 382 P.2d 239, 239 was ineffective. (1963) (even if the parties do not raise the issue, the court must determine whether it has jurisdiction);  Ramada Inns, Inc. v. Lane and Bird Adver., Inc., 102 Ariz. 127, 128, 426 P.2d 395, 396 (1967) (a corporation cannot appear in court by an officer who is not an attorney and cannot appear in propria persona).”

    Recommendation: Rule 10.1(C) should be stricken in its entirety.
    Rule 10.2, Arizona Rules of Probate Procedure
    Issue: Rule 10.2(C) is almost verbatim from Senate Bill 1499 with the exception of the last line which states “At any stage of the proceedings, the court may order that competitive bids for food or services be obtained.” I was present at some of the committee meetings and there was a great deal of discussion on the competitive bid process during the fine tuning of SB1499 and HB 2424. It may have been written that the “market rates for good and services” pertain only to fiduciary and attorney fees, this does not accomplish that. The wording of this rule opens up the fiduciary for having to supply competitive bids on placement such as care homes or group home, daily supplies, and any other expense that one feels could be obtained for less.
    Recommendation: Strike the last sentence of Rule 10.2(C)
    Rule 22, Arizona Rules of Probate Procedure
    Issue: Rule 22(C)(2) implies that all restricted funds must be “deposited into an interest-bearing, federally insured restricted account at a financial institution engaged in business in Arizona”. This will have a negative impact on investment and IRA accounts that have named beneficiaries, which would cause me to interrupt the estate plan, which by statute I am not authorized to do. In addition this would be in direct violation of the Prudent Investor Standard and the Prudent Man Standards as they are applied to investment accounts. Many of the clients have a long history of investing and that is there preferred method of deposit for their funds. This will cost much more money to close all accounts that are not interest bearing and federally insured and open new accounts that are.
    Recommendation: Strike “deposited into an interest-bearing, federally insured restricted account at a financial institution engaged in business in Arizona” from this Rule. All other language should remain.
    Rule 30.1 Arizona Rules of Probate Procedure
    Issue: The Good Faith estimate that is being proposed is not practical, not prudent, and not beneficial. It is not practical at the time of petition to have the information or the legal ability to gather the information which is required on Form 5. This is not prudent because the amount of time gaining this information prior to appointment will take several hours and cost the estate hundreds of dollars, before being adjudicated as incapacitated. At the time of appointment there are many unknown factors in a case which change dramatically after appointment, such as placement, behavior issues, medical stabilization, social issues, addition of services to the ward, assisting the ward with all the changes, and familiarizing the fiduciary with the case to be able to provide a adequate budget within 90 days. For the court to order that the Petitioner violate a human’s privacy prior to an adjudication of incapacity seems as a violation of rights and due process.
    Recommendation: I recommend that Form 5 Good Faith Estimate be stricken in its entirety.
    Rule 30.3 Arizona Rules of Probate Procedure
    Issue: Rule 30.3 While many professional fiduciaries already prepare internal budgets and case sustainability plans, we have not had the morbid duty to supply life expectancy of our clients in this formula. I believe that trying to anticipate how long my client will live and sending that information to their family and interested parties will open us up for increased disputes that could result in costly litigation. Due to the day to day changes of our clients it will be almost impossible to calculate how long they will live. I have a client who has been placed on Hospice care for more than 2 years, he has been near the end on more than one occasion and come through it, so close to death one time that Last Rites were performed, but now 4 months later he is doing great. By the Hospice standard of “less than 6 months” my last two life expectancy and sustainability calculations would have been very inaccurate. Not to mention the toll on the family believing that their loved one had 6 months to live.
    Recommendation: Remove the life expectancy calculation. The sustainability formula should remain.
    Rule 30.4
    Issue: Rule 30.4(D) requires that an amended budget be filed within 30 days if the expenditures for any given category exceed 10% or $2,000.00, whichever is greater. It is my belief that this Rule will cost a great deal more than it is proposed to save. As others have mentioned, emergencies are a daily routine in a fiduciary office. A heater breaks, water pipes freeze, client gets evicted from apartment, teeth break, hip breaks, surgery, hospitalization, recovery, move to skilled placement, trust refuses releasing funds, etc. These are things that need immediate attention and can not wait for the court to grant permission to exceed the proposed budget. If every time the budget was exceeded we had to file a motion and give notice we are giving more time for objections by family members or beneficiaries to object to any extra expenditure which results in higher administrative costs. This rule serves no benefit to the protected person and provides no additional benefit to the court.
    Recommendation: Strike this paragraph in its entirety.
    Forms 6-10
    Issue: The forms that are being proposed are way too complex for the non-professional to do. This will cause increased confusion and a hardship on the non professional to get assistance with these forms. I believe that a better set of forms can be considered and circulated which will make reporting simple for any person with the duty to report.
    Recommendation: The committee spend more time reviewing currently used reporting forms by professional offices and find a format that is more user friendly and easy to understand.

    Proposed Statewide Fee Guidelines
    Issue: As a licensed professional fiduciary, I am required to track and document every piece of paper that comes through my office. All of the bills need to be entered into the bill pay system so twice a month I can print a “bills due” report and streamline the bill pay process. Some clients have many bills, while others only have a few. All of the clerical work that is performed, tracked, documented, and billed is what it takes to prepare inventories, accountings, and other related reports. The impeccable records make it easier to respond to the family or the court when questions arise. I do not feel that all the benchmarks are reasonable. For instance it can take anywhere from 8-20 hours, or more in some instances, to prepare an accounting, making sure the chart of accounts match exactly so data can be imported, verifying figures, compiling and scanning or copying all fiduciary and attorney invoices, scanning and copying all service invoices, reviewing prior accounting orders and court accountant responses to ensure that we have addressed any past issues and are in compliance, and sending to attorney and addressing attorney questions. On clients that have several accounts, prior to anything all recent statements need to be in and reconciled.
    Recommendation: The current rules, codes, and statutes already have mechanisms in place to address the reasonableness of fees. Should a fee dispute arise the Sleeth v Sleeth case approach should be considered.
    F(2)(D) Mileage
    Issue: I practice in Yavapai County, the largest county in Arizona. My cases may be 60 miles one way. Mileage is an acceptable IRS reimbursed expense. I have 5 associates with my firm that use their own vehicles for many company purposes, mileage is tracked by client and reimbursed to the company monthly and the employees are then reimbursed. If we are not able to charge mileage, we can not pay mileage, we can not adequately serve our clients. Although we can charge our standard fee for travel, which makes sense as if we were not traveling for a client we would be doing some other client related task at the standard rate, we are also using our own fuel and wear and tear on our vehicles, which is why mileage is a reimbursed expense to offset these costs.
    Recommendation: Strike “in state mileage is not reimbursed” and replace with “in state mileage can be reimbursed up to the amount used by the IRS”.
    wayfirm
    Posts:

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    22 Sep 2011 05:28 PM
    Robert Way
    c/o Bridget O'Brien Swartz
    3200 N. Central Avenue
    Phoenix, AZ 85012
    602-248-1054
    bos@jaburgwilk.com

    On behalf of the Arizona Chapter of the National Academy of Elder Law Attorneys, I post the following comments:

    1. Rule 10.1. While we agree that a fiduciary should have the right to avoid a court hearing where the fiduciary might not be necessary, we are concerned that it should not be a prohibition on attendance. It is often difficult to predict what might happen at a hearing and thus might be more efficient to have both the attorney and the fiduciary present.

    Recommendation: Add a Comment to clarify that a fiduciary may file a document that does not require an attorney’s signature directly, but is not required to do so. Additionally, a fiduciary should be entitled to fees for attending non-contested matters, unless otherwise directed by the Court not to attend the hearing.

    2. Rule 22.C.2. This paragraph states that funds shall be deposited into an interest bearing, federally insured restricted account at a financial institution engaged in business in Arizona. Unfortunately this mandate does not take into consideration brokerage accounts, IRA accounts, stocks owned by the Ward prior to the initiation of proceedings or other investments held by the Ward.

    Recommendation: Either amend the Rule or add a clarifying Comment that states that the Rule is not intended to preclude the conservator from restricting brokerage accounts, retirement accounts, life insurance or other investments, particularly if those investments existed prior to the initiation of the proceedings, nor is this Rule intended to mandate that the conservator liquidate investments in order to place the funds in an FDIC account.

    Under paragraph 3 of this same rule it says that proof of restricted account must be filed within thirty days. It has been our experience that often more time than this is needed. We recommend that the conservator have at least forty-five days to file the proof of restriction.

    3. Rule 30.1 and Rule 30.3 While we understand the desire to determine how long the funds might last for a Ward under a conservatorship, we have some concerns related to the Good Faith Estimate. There is no reasonable means by which the conservator can predict the life expectancy of the Ward. Additionally, we are very concerned about the negative impact it may have on the Ward and the family to make a prediction of life expectancy. Instead, we would suggest that that the Conservator state how long the funds will last at the current rate of spending.

    Rule 30.1 will require the petitioner, who may or may not be the nominated conservator and who has no legal authority to access any financial information, to provide estimates of expenses, including legal fees and fiduciary fees. Often a conservatorship is filed because the petitioner is concerned about how funds are being spent due to the vulnerability of the alleged incapacitated adult, but has no means by which to review or access any financial information. Moreover, simply because a petition is filed does not mean that the nominated party will be appointed as the conservator.

    Recommendation: The Conservator state the current age of the Ward and any significant health problems of which the Conservator is aware. Please note however, that the Conservator has no legal right to personal health information related to the Ward.

    Any budgets or estimates of expenses should be not be due until ninety (90) days after an appointment is made This will allow the party to investigate the facts and thus provide a potentially more accurate document to the court and the parties.

    4. Rule 30.4(D). We agree that a budget is a positive concept. However, the rules states that if the expenditures will exceed the approved budget by more than 10 percent or $2,000, whichever is greater, an amended budget must be prepared and filed within thirty days. We are concerned that this will increase the cost to the estate and the Ward, particularly for more medically complex cases. Unless the budget is overly liberal (and thus not accurate either), it may require that several budgets be filed in any year.

    Recommendation: The Court can use this as a twenty-four month pilot project to determine if the cost and the benefits are in line and appropriate.

    5. Rule 33. This Rule should be revised to allow for payment of the attorney’s fees by the client personally in the event the court does not authorize payment by the estate. There is a difference between fees being unreasonable and fees that the estate will not pay. The way in which the rule is currently drafted may not allow for that because it implies that by not allowing for payment by the estate, the court has determined the attorney’s fees are not reasonable. The Professional Rules of Conduct may then preclude the attorney from seeking compensation directly from his client despite a valid contract or fee agreement that provides for payment by the client personally. The court should only address what the estate will pay and not intervene or interject restrictions in the contractual relationship the attorney has with his client to the extent the client has agreed to personally pay fees that are not authorized to be paid by the estate.

    6. Rule 38B This Rule states that Forms 5 through 10 shall be the exclusive method for presenting budgets, accountings, etc. unless otherwise ordered by the court. One size does not fit all and many accounting software programs currently in use will not be compatible with the new forms.
    Recommendation: Rather than dictate the specific forms that are to be used, the rule should specify the format to give latitude. The Forms should act as guidelines and conservators should submit the information in forms that are in substantially the same format as the suggested forms. For example, the forms to be submitted must provide information that shows a comparison of costs and fees from the past year to the current year.

    7. Although the proposal refers to its recommendations as general principles and not rigid rules, specifically within the fee guidelines but also elsewhere, it concurrently writes the proposed Rules to say that the Court “shall consider” instead of “may consider.” This is contradictory. We believe that the guidelines are just that, guidelines and the court should use them as suggestions, not mandatory requirements or limitations.

    8. Examples of billing should state: An hourly billing statement shall be made in tenths of an hour (ie. tasks that take 6 minutes or less should be billed as (.1) and tasks that take more than 6 minutes but less than 13 minutes, should be billed as (.2)).

    9. Points of reference. “General benchmarks” should not be included. There are rarely routine or average guardianship and conservatorship matters. The values of estates may range from thousands to millions of dollars. The complexity of an individual’s health issues is unpredictable from year to year. Further, five hours of time to account and budget each year is virtually unheard of. Relatively straightforward accountings often take more than five hours.

    10. Rule 30 regarding Pre-Appointment Investigation and Risk Assessment: I think it’s a good idea to assess the need for periodic and ongoing investigation post-appointment depending on the specific circumstances of the case.

    11. Training of non-licensed fiduciaries, judicial officers, Court-Appointed Counsel, and Guardians ad Litem is necessary and beneficial.

    12. A budget is not a bad idea if more latitude is given to allow for unanticipated expenses without having to incur the cost of returning to court to get prior approval.

    Thank you for your consideration.

    Robert Way, President

    akokaska
    Posts:

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    23 Sep 2011 12:07 PM
    Aileen B. Kokaska
    5216 Lawn Avenue
    Western Springs, Illinois 60558
    708-246-6746
    dkokaska@comcast.net

    Regarding Rule 10(C)(b) - Duties of Court Appointed Fiduciaries -
    I am in favor of the court appointed fiduciary refraining from charging to attend court proceedings unless such attendance is required by law. In the fiduciary code of conduct if that individual is truly working in the best interests of the protected person by communicating effectively with all parties involved, the court appearance would be unnecessary, as the fiduciary would be aware of the court proceedings prior to the court date. If questions do arise the fiduciary can always be available telelphonically. This would be a cost saving measure for the protected person as they would not have to incur the costs of travel, mileage, parking and the extended time of the fiduciary while in court. Most times the court appointed attorney is the one present on behalf of the protected person, so why duplicate costs.

    Regarding Rule 10.2(C) - Prudent Management of Costs -
    I am of course in favor of prudent management of costs however I would ask that the court mandate that the fiduciaries provide competitive bids for goods and services at the time of the inventory and quarterly thereafter. In home service costs as well as nursing home care are of the greatest expense to the protected person's estate and there needs to be much transparency as possible during this process. Costs for care can be negotiated in this very competitive market and this needs to be documented with the court, that all efforts were made to obtain the best price for the best service. This will lessen the conflict of interest and the hand picking of "favorite" vendors.

    Regarding Rule 26.1 - Written Findings on Appointment -
    I am in favor of the written findings on appointment however I would ask that the court add a clause related to persons with high priority being passed over by a person with a lower priority, that they have agreed to such. There should be a court document which is signed by the person with the higher priority that outlines their rights as the person holding the higher priority and what that decision of not accepting the appointment will mean to the protected person. So often families are misinformed and then misrepresented in court resulting in life alternating changes for the protected person as well as the person holding the higher priority.

    Thank you in advance for your consideration of my recommendations.


    ecrowley
    Posts:

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    23 Sep 2011 12:42 PM
    Lisa M. Price
    National Certified Guardian
    Licensed Fiduciary
    Principal, Entrust Fiduciary Services, Inc.
    250 N. LITCHFIELD RD., SUITE 115, GOODYEAR, AZ 85395
    lisa.price@entrustfiduciary.com

    Concern: Rule 8(B) states that if notice is not made upon all persons required in the manner prescribed by A.R.S. Title 14 "within 120 days after filing of the initial petition or application, the court, upon its own initiative after notice to the petitioner or applicant, may dismiss the petition or application without prejudice."

    I am not sure I completely understand this provision. If notice is not properly given prior to a hearing the petition or application should not be granted. The time frame of 120 days would be long after a petition or application would have already been heard and decided. Is this referring to situations where a petition or application is filed but no hearing is set?

    Recommendation: This section should either be stricken or the committee should supply comments as to its purpose.

    Rule 10, Arizona Rules of Probate Procedure

    Concern: Rule 10(C)(1)(b) indicates that the fiduciary shall refrain from charging to attend court proceedings unless it is required by law, court order or other circumstance. I understand the purpose of this provision is to conserve fees. Unfortunately, I believe it will do the exact opposite. As a licensed fiduciary I am bound by the Arizona Code of Judicial Administration §7-202(J)(1)(e), which states in part, "Regardless, the fiduciary alone is ultimately responsible for decisions made on behalf of the ward, protected person or estate." As such, I am the only person who could answer questions on behalf of a particular case. I could provide numerous examples where I have attended a hearing expecting it to be "routine" only to have someone attend the hearing and object or have the court have questions that only I could answer. If I were not at the hearing, the court would then have to reset the hearing which is a waste of judicial resources and ultimately will increase costs to the ward, protected person or estate.

    Recommendation: Strike this section in its entirety.

    Concern: Rule 10(E)(1) indicates that court-appointed attorneys or GALs must participate in a training program as prescribed by the Arizona Supreme Court. The section goes on to state that,

    "the attorney must file a copy of the certificate of completion with the Administrative Office of the Courts or the Supreme Court's designee no later than ten days after entry of the appointment order." This would seem to imply that each time someone is appointed as a CAA or GAL they must re-file the certificate of completion with the court.

    Recommendation: Strike the language "no later than ten days after entry of the appointment order." This would make it consistent with a similar provision contained in Rule 10(F)(1) related to court investigators.

    Rule 10.1, Arizona Rules of Probate Procedure

    Concern: Rule 10.1(C) allows an attorney to file a motion to allow the fiduciary to attend a hearing without counsel. I have a number of concerns about this provision. As with Rule 10(C)(1)(b), although a fiduciary and/or the fiduciary's attorney could justify attending hearings, I believe that the fact that it was an "option" for the attorney or fiduciary to not attend a hearing will lead to increased fee objections from other parties. Additionally, the suggestion is that it will save administrative fees for an attorney to not attend a hearing; yet in order for that to happen the attorney must first file a motion which has to be reviewed by the fiduciary. Again, this will only increase administrative fees, not reduce them. Lastly, Rule 17(D), Arizona Rules of Probate Procedure, allows a party to appear at a hearing and orally object to the petition. As with the example above, while a hearing may be expected to be routine a party is always able to attend and object. Failure of the fiduciary to be represented by counsel may only result in a delay in the proceedings which would result in a waste of judicial resources and additional administrative expenses to the estate.

    Recommendation: Rule 10.1(C) should be stricken in its entirety.

    Rule 10.2, Arizona Rules of Probate Procedure

    Concern: Rule 10.2(C) is almost verbatim from Senate Bill 1499 with the exception of the last line which states "At any stage of the proceedings, the court may order that competitive bids for good or services be obtained." There was significant time spent discussing the competitive bid process during the negotiations regarding SB1499 and HB2424. While the assumption may be that the "market rates for goods and services" addressed in this section relate only to fiduciary or attorney fees, this is not the case. This section opens up a request by the court or an interested party to request a competitive bid for nursing home costs, in-home care costs or fiduciary fees. As anyone who has ever dealt with a competitive bidding process can tell you, rarely is a project completed on time or within the budget. Additionally, as we explained to the legislature, simply charging a lower hourly rate does not mean that your fees will ultimately be less than another service provider as the practices of the office determine the fee much more so than the hourly rate.

    Recommendation: Strike the last sentence of Rule 10.2(C).

    Rule 22, Arizona Rules of Probate Procedure

    Concern: Rule 22(C)(2) indicates that when funds are restricted they must be "deposited into an interest-bearing, federally insured restricted account at a financial institution engaged in business in Arizona." How does this affect brokerage accounts? Brokerage accounts are not federally insured. It would be my assumption that the courts would not suggest that we violate the Prudent Man Standard or Prudent Investor Standard by placing all funds of our wards in interest-bearing money market accounts. Additionally, what if the accounts being restricted are IRAs or other accounts with a payable on death beneficiary designation? To change the investment strategy may be changing the estate plan of the ward or protected person which we are statutorily forbidden to do.

    Recommendation: Strike the following language: "Funds shall be deposited in an interest-bearing, federally insured restricted account at a financial institution engage in business in Arizona." The remaining restriction language is appropriate.

    Rule 30.1, Arizona Rules of Probate Procedure

    Concern: This is, by far, the most egregious of all rule recommendations. There was significant time spent addressing this issue at the legislature during the last six months. After hours of discussion, the legislature agreed that this was not a good use of resources and would ultimately serve no benefit to the parties.

    The first issue of this "good faith estimate" is that it is to be supplied by the petitioner, not the proposed appointee. I am not sure how the guardian ad litem, adult protective services, or family member is to obtain a good faith estimate to provide in the petition. The second issue with this proposal is that prior to appointment, I have no legal authority to have access to the information that would be necessary to complete a good faith estimate. Rarely do I have a clear picture of assets or a proposed ward's medical situation. I cannot tell you what the costs for medical care are going to be as I don't know what the ward's placement needs will be. I cannot tell you what my fees or the fees of my attorney will be as I have no idea how complex a case may be. Anyone who has practiced in this area for any length of time knows that what you believe may be the issues of a particular case can change very quickly upon appointment. Additionally, we are dealing with the lives of real people which can change on a daily basis. When this issue was discussed during the meetings of the Probate Committee there were a number of analogies made to cars and mechanics who can give you an estimate as to what it will cost to fix a car. Not only was I offended by this analogy, it is completely inappropriate. A car is a fixed object. You can narrow down a problem with a car and provide a reasonable estimate as to what it will cost to fix it. You cannot do this with a human being and to suggest you can is inappropriate and irresponsible.

    The proposed rule indicates that the petitioner is to provide an estimate based on information which can be reasonably known or projected at the time the petition is filed. Should this rule pass, my petitions will all state, "I have no legal authority to gain access to the information which would be necessary to provide a good faith estimate at this time. An appropriate budget will be filed at the time of the inventory and appraisement."

    Recommendation: Rule 30.1 should be stricken in its entirety.

    Rule 30.2, Arizona Rules of Probate Procedure

    Concerns: Rule 30.2 allows the CAA to be discharged if the court finds "that the cost of the continued representation exceeds the probable benefit to the protected person." I believe this is bad policy. A probate proceeding does not cease upon appointment of a guardian or conservator. If the individual has been deemed incapacitated, they are unable to protect themselves and their interests and ensure their due process rights are not being violated. The discharge of a CAA in a conservatorship only proceedings where the protected person has the ability to understand an accounting or understand a court proceeding would be acceptable but in cases where the protected person has been adjudicated incapacitated, there should always be a court-appointed attorney involved in the case.

    Recommendation: Specify that a CAA can be discharged in a conservatorship only case but must be maintained when there has been a finding of incapacity.

    Rule 30.3, Arizona Rules of Probate Procedure

    Concerns: Overall, I have no objection to providing the court with a budget and a sustainability projection. The problem with this proposal is that it requests an estimate of projected life span. I believe it is simply bad public policy to propose to my ward, their family, interested parties, or the court how long I think someone may live. Bad public policy aside, my office only acts in a conservatorship, personal representative or trustee capacity; none of which would allow me access to the medical records which would be necessary to provide an estimated life expectancy. I can and would be happy to supply an estimate based on current income and expenses of the exact month the funds would be exhausted but I cannot possibly tell you if my ward or protected person will outlive that time frame. As an example, I was appointed for a man 14 months ago who was on hospice services. Shortly after our appointment, and because of our involvement, he actually graduated from hospice services for a short period of time. As many know, a hospice admission assumes a life expectancy of six months or less. My "sustainability" projection to the court would have been off by quite a bit in this case.

    I simply do not see the benefit in providing the life expectancy approach. Again, I can tell you, based on current income and expenses, the month the funds will be exhausted and I can tell you what my plan would be for the ward or protected person at that time. This can all be done without the life expectancy calculation.

    Recommendation: Remove the requirement to provide a life expectancy calculation when providing a sustainability projection.

    Rule 30.4, Arizona Rules of Probate Procedure

    Concern: Overall, there is no concern with the concept of a budget and I have been a proponent and supporter of budgets from day one. The concern is with the form being proposed by the probate committee. The form is much, much too complicated. Any form that requires eight pages of instructions to explain a two page form is too complicated. The drafters must keep in mind that 85%+ of probate cases are managed by non-professionals. The budget must be in a format that an average person would be able to use and understand it and apply to their own household.

    Recommendation: I have attached a proposed budget form which could easily be adopted for the sustainability projection and the summary of assets for the annual accounting.

    Concern: Rule 30.4(D) requires that an amended budget be filed within thirty days if the expenditures for any category exceed the approved budget by more than ten percent or two thousand dollars, which ever is greater. This is only going to lead to more administrative expenses and provide zero benefit to the ward, protected person or interested parties. If I have a client who is in assisted living, had a fall and breaks her hip and requires placement in a skilled nursing facility that is going to cause an increase in the budget by more than ten percent or two thousand dollars. Will that make a difference in how I manage the case? Of course not as the best interest of the ward/protected person is what take precedent. Or what if the air conditioning unit goes out on the home owned and lived in by my client. I have only estimated $2,000 for the year for household expenses and now I must expend $5,000 for a new air conditioning unit. How is it beneficial to the ward/protected person for me to update the budget and for my attorney to file that with the court and notice all parties? A $5,000 air conditioning unit now just cost the ward/protected person $6,000 due to the additional administrative expenses.

    Recommendation: Strike paragraph D in its entirety.

    Forms 5-10

    Concerns: In general the forms are not appropriate for non-professionals. As 85%+ of probate cases are managed by non-professionals this will make it more difficult for those individuals to complete their duties. I will respond to these forms in more detail at a later date.

    Proposed Statewide Fee Guidelines

    Concern: The drafters of these fee guidelines appear to believe that fiduciaries and attorneys are the same. We are not. First, attorneys are not audited by the State Bar; nor do they have a 23 page document of audit expectations that they are bound by. As licensed fiduciaries, we are required to keep impeccable files and document every piece of mail that comes into our office. While this may be seen as clerical work, it is imperative to my operations and my ability to successfully pass an audit by the Administrative Office of the Courts. As long as this level of record keeping is required by my licensing entity, I will charge for the time. I believe the main issue not addressed by the drafters of the fee guideline is that clerical time is being charged at a much higher billing rate than one would expect for clerical work. A better approach would be to limit the rate that could be charged for clerical work. For example, my billing rate is $105/hour while the clerical rate (even if I am performing the task) is charged at $40/hour. This is a reasonable rate for clerical services. I have already heard significant concern within the fiduciary industry about the ability to cover overhead expenses (including the salary of the person required to perform these tasks) at our current billing rates. Most offices have indicated that should these guidelines be approved, they will simply raise their rates to cover the cost of these positions. In the long run, a higher billable rate for all other tasks will result in more in administrative costs. As an example, from January 1, 2011 to current, my office has billed 314 hours of clerical or administrative tasks for a total of $12,388.00. Alternatively, if I were to raise my hourly billing rate by $10.00/hour across the board for all other tasks (not including any time billed for clerical or administrative tasks) the total additional income would be $15,677.00. Clearly this is a benefit to me and my office, but not the ward.

    The second issue I have with the fee guidelines is Section 3(D) related to the number of hours that should be expended on a particular task. Given that the Probate Committee and the Workgroups collected zero statistical data over the course of the last year, I would be curious to know how these figures were generated. While the document attempts to make it clear that these are just "guidelines" it also states very clearly that the fiduciary should be prepared to explain why they charged more than the hours contained in the guideline. This will, without a doubt, result in higher administrative fees as interested parties, particularly aggrieved family members, are going to object when the time spent shopping in one month was seven hours instead of six. Now the fiduciary will spend an hour explaining why that particular ward needed so much attention that month.

    Again, while the committee and workgroup members all indicated that it was not their intent that any estimate of fees (the ones contained in the good faith estimate) would be used against the fiduciary and were only to be set out as a guideline to give the parties an "estimate" of fees and costs, Section 4(A) appears to contradict that position. This section is clear that the judge is to look at the estimate of fees in determining the reasonableness of the compensation requested. Once again, the drafters are failing to take into account that we are not dealing with static cases; we are dealing with human beings whose needs change from one day to the next.

    I also have an issue with Section 4(F) regarding the delegation of duties to another individual. I agree that all fiduciaries (and attorneys) should delegate tasks to other staff whenever possible to conserve fees. That being said, as licensed fiduciaries our Code of Conduct contained in Arizona Code of Judicial Administration §7-202 limits our ability to delegate a number of tasks to non-licensed staff. Additionally, while not explicitly written in the ACJA, many fiduciaries have reported findings on audits when they delegate tasks to non-licensed staff.

    Recommendation: The best way to handle fee disputes is to simply use the findings of Sleeth v. Sleeth, all of which are currently contained in statute, rule or case law and were simply consolidated into one case.

    I appreciate all of the work conducted by the various committee and subgroup members. Thank you for consideration of my comments.


    Attachments
    J. R. Rittenhouse
    Posts:

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    24 Sep 2011 12:06 PM
    Comments on Proposed Probate Rule Changes

    J. R. Rittenhouse
    Arizona Licensed Fiduciary #20045
    P. O Box 2357
    Peoria, Arizona 85345
    602.791.1632
    info@jrfiduciary.com



    Attachments
    lsmith
    Posts:

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    10 Nov 2011 03:47 PM
    Petitioner’s Name: Lorraine Smith
    Committee Name: Arizona Judicial Council
    Mailing Address: 1501 W. Washington, Suite 411, Phoenix, AZ 85007
    Phone Number: (602) 452-3301
    FAX Number: (602) 452-3484
    E-mail Address: lsmith@courts.az.gov
    Attachments
    lkoschney
    Posts:

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    28 Nov 2011 01:33 PM
    Hon. Norman J. Davis
    Presiding Judge
    Maricopa County Superior Court
    125 W. Washington St.
    Phoenix, AZ 85003
    (602)506-5262

    Hon. Rosa Mroz
    Presiding Probate/Mental Health Judge
    Maricopa County Superior Court
    125 W. Washington St.
    Phoenix, AZ 85003
    (602)372-0384
    Attachments


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