Lisa M. Price, RG, President, Arizona Fiduciaries Association, Inc.
Certified Fiduciary Certificate No. 20120
Entrust Fiduciary Services, Inc.
P.O. Box 249
Yuma, Arizona 85366-0249
Telephone: (928) 782-0974
Facsimile: (928) 782-3889
Email: [email protected]
Website: www.entrustfiduciary.com


Rule 20. Affidavit of Proposed Appointee

1. Rule 20(B)(1) requires that a certified fiduciary file an affidavit with the AOC which outlines all cases in which the certified fiduciary has been appointed as guardian and/or conservator within the previous three years, including dates of appointment, type of appointment, date of termination and reason for termination. According to the Yuma County Clerks office, this information is already being tracked by the court with software provided by the AOC. If that is the case, this rule is unnecessary and will only result in additional administrative cost to the fiduciary.

2. Rule 20(B)(2) requires that a certified fiduciary file an affidavit with the AOC which outlines the names of all persons who the certified fiduciary has acted as an agent under a power of attorney (including a healthcare power of attorney) within the three previous years, including date the POA was executed, type of power, where the POA was executed, the actions taken by the fiduciary and whether such power is still in effect.

First, individuals choose powers of attorney as an estate planning tool which allows them to keep their private information out of the public record. I do not believe that the fiduciary would have the authority to disclose this information without the consent of the principle.

Second, this rule requires the fiduciary to outline the actions taken by the fiduciary while acting as the agent. There needs to be some explanation as to what information is being requested. Are you looking for a general overview of responsibilities or details?

Third, the AOC currently has no authority to investigate or discipline a certified fiduciary for actions pursuant to a power of attorney. What is the purpose of providing this information if the AOC is unable to initiate any disciplinary proceedings related to alleged wrongdoing?

Lastly, the reality is that the fiduciary can simply lie and say that they have not acted as a POA or leave out the cases in which there may be wrongdoing. There is no mechanism by which the AOC may verify this information. There is no requirement to record the POA, there is no requirement for filing with the court. This rule is cumbersome, will lead to additional administrative costs to the fiduciary and should be stricken in its entirety.

3. The comments to Rule 20 indicated that the certified fiduciary may fulfill the affidavit requirement by filing the disclosure statement annually with the AOC. It goes on to state that the fiduciary shall notify the Supreme Court within thirty days of any "material changes relating to the certified fiduciary's status." What exactly does this mean? Does this mean that each time a certified fiduciary is appointed on a new case or discharged from a case that they must update that information with the AOC? Again, this would be extremely cumbersome, will lead to additional administrative costs to the fiduciary and should be stricken in its entirety.

Lisa M. Price, RG, President, Arizona Fiduciaries Association, Inc.
Certified Fiduciary Certificate No. 20120
Entrust Fiduciary Services, Inc.
P.O. Box 249
Yuma, Arizona 85366-0249
Telephone: (928) 782-0974
Facsimile: (928) 782-3889
Email: [email protected]
Website: www.entrustfiduciary.com


Rule 25. Order to the Fiduciary

Rule 25 does not make any provision for orders related to the appointment of a temporary guardian or temporary conservator. In my discussions with a fiduciary in Maricopa County there was a finding in an audit conducted by the AOC because the fiduciary failed to follow an order of the court, wherein the order required that the fiduciary file an inventory within 90 days of appointment. The fiduciary was appointed in a temporary capacity and therefore was not required by statute to file such an inventory, but because there was an order from the court requiring this filing, the fiduciary received a finding in their audit. There should be a provision in Rule 25 that either states that these orders only apply to the appointment of a permanent guardian and/or conservator or there should be a separate form for orders to temporary guardians and temporary conservators.

Alternatively, the suggestions made by Robert Fleming regarding the requirement of the ticking clock to begin on the date the fiduciary takes control of the funds would seem appropriate.

Lisa M. Price, RG, President, Arizona Fiduciaries Association, Inc.
Certified Fiduciary Certificate No. 20120
Entrust Fiduciary Services, Inc.
P.O. Box 249
Yuma, Arizona 85366-0249
Telephone: (928) 782-0974
Facsimile: (928) 782-3889
Email: [email protected]
Website: www.entrustfiduciary.com


Rule 33. Compensation for Fiduciaries and Attorney=s Fees

1. Rule 33(A) requires a number of items to be included with a fiduciary's request for payment of services. The items outlined in this rule seem a bit overdone. For example, in addition to submitting a statement that outlines all services performed, the individual performing the task, the time expended, the name and position of the person performing the task, and the hourly rate charged for services, this rule requires an additional document that summarizes the total time, rate and total charged per person. What purpose does this serve? Many attorney and fiduciary time management programs will not allow an easy way to gather such information. As this is a requirement of the rules and must be filed with the court, the fiduciary and attorney will charge the time for creating such records to the estate. I could envision such a requirement taking many hours to complete, particularly in cases with a great deal of work and complex tasks.
A better approach would be to require the items listed in Rule 33(A)(2) be included on the fiduciary and attorney's fee statement.

2. Rule 33(E) needs more explanation. For example, what exactly constitutes an independent contractor? Does that include accountants, financial advisors, real estate agents, home health services, etc. which are utilized to provide services to a ward?

Also, this rule requires the submission of information which is highly inappropriate related to the fiduciary's employee. This section states that "if the fiduciary is charging for services done directly by the fiduciary's employee, the fiduciary shall include in its petition for compensation a statement of the rates or hourly wages paid to each independent contractor or employee." I am not sure I understand this section. Employees provide direct services to clients all the time, such as reconciling bank statements, transporting to doctors appointments, etc. Is this rule to suggest that I must disclose the rate of pay I supply to my employee and then the hourly rate I charge to my clients for the services performed? I don't believe that many employers would agree to disclose the hourly rate paid to its employees in a public document.

If the purpose of this rule is related to services performed outside of the standard employment of the fiduciary firm that needs to be clarified. For example, if you are referring to items such as the fiduciary employing an employee to provide housekeeping services to the ward as a separate contract employment agreement, that needs to be made more clear. This should not be happening in fiduciary offices to begin with as it would be a violation of the Code of Conduct as outlined in ACJA Section 7-202(J)(2)(b).

3. Rule 33 seems to imply that a separate petition for approval of fees is required. Typically, a fiduciary requests approval of fees as part of the petition to approve the annual accounting. Will this still be permissible? If an additional petition is required, this will only result in additional administrative fees being charge to the estate of the ward.

Allan D. Bogutz
Bogutz & Gordon, PC
Certified Professional Fiduciary
Fellow, American College of Trusts and Estates Counsel
Fellow, National Academy of Elder Law Attorneys
3503 N. Campbell Ave.
Tucson, AZ 85719-2007
allan@bogutzand gordon.com

I have reviewed all of the posts by Robert Fleming on this Forum regarding the Probate Rules proposals. I agree wholeheartedly with all of his comments and appreciate all of the effort that he has put forth to clarify these issues.

Having practiced almost exclusively in this area for more than 36 years, I fear that these changes continue a trend to complicate matters and really make the system of guardianship and conservatorship unaffordable for a large portion of the public. There is a tone in all of the changes of very substantial distrust of those who seek to help others. Furthermore there is a lack of respect for the ability of the courts to identify where problems exist in the absence of huge amounts of costly documentation. Judges know where the problem cases exist but the changes continue the pattern of (economically) punishing the innocent who are the vast majority of those who seek to help others.

When we make the system unaffordable, people divert themselves from the system completely. Those who do so use powers of attorney, trust agreements, joint accounts, casually executed documents or other means to access the funds of others. Those who are truly determined to exploit others are not likely to involve themselves in the judicial system at all. What we are doing here is a further step towards making access to the useful system of court-administered guardianships and conservatorships impossible for most of the public.

Mr. Fleming's comments are all astute. What will be the impact on my staff or the staffs of other offices if their salaries and other compensation are now public record? What is the benefit of making social security numbers more readily accessible? What is the benefit of forcing additional reams of paper to be filed with the court? And how do these benefits balance against the extra cost of all of the preparation, costs ultimately borne by the estates of those we are protecting.

Perhaps we all need to take a step back and change our presumptions. It appears from these proposals that we presume that all guardians and conservators are bent upon exploiting and we are going to take every step to find them and how they do it. What if we were to presume, properly I believe, that the vast majority, the overwhelming majority of those appointed by the court are honest, conscientious and intent on helping their wards/protected persons? If we were to make that simple attitude shift, it would then mean that each of the proposed burdensome new mandatory rules could simply be changed from "shall...." to "in appropriate cases, the court may order......"

I am not a Pollyanna who believes there is neither evil nor overreaching in our midst but we have to be more careful about how much we punish the innocent to find the very few guilty. Very few people steal, misappropriate, misapply or commingle. Very few Professional Fiduciaries overcharge or mishandle money. Yet these proposed rules make it all much harder for everyone, much more expensive and more unaffordable for many more clients, removing any protection by the court system at all.

Abraham Lincoln said: "When you look for the bad in mankind expecting to find it, you surely will." I think that is what we are doing with these changes. The system is not broken; it is working. There is little we can do to prevent the few bad persons from abusing it but we need to give the judges the tools -- WHEN THEY NEED THEM -- to find those persons, gather necessary information and act accordingly to protect the vulnerable among us.

My recommendations are simple:
1. Assume most people are of good intent and do a good job.
2. Change the mandatory nature of ALL of the additional disclosures to being optional in specific cases at the discretion of the judge.
3. Find ways to REDUCE the cost of this process.

Allan D. Bogutz

Denice Shepherd
Law Office of Denice R. Shepard PC
2424 E. Speedway Blvd.
Tucson, AZ 85004
Phone: (520) 623-3526
Fax: (520) 622-6971
Email: [email protected]


Rule 30 (3) fails to define "erroneous or misleading" values. The failure to provide a definition may lead to unnecessary litigation and places an unreasonable burden on the conservator and an unreasonable burden on the person's estate. Since this rule specifically includes non-appraised items family member's perceptions of values may cause the conservator to seek court intervention unnecessarily just to attempt to comply with this rule.

Robert Fleming
Fleming & Curti, PLC
330 N. Granada
Tucson, Arizona 85701
520-622-0400
www.elder-law.com
www.specialneedsalliance.com

This observation by Denice is exactly correct. In fact, I am involved in the very case she describes right now -- and the new rule would exacerbate the situation. As Personal Representative I have been challenged for using property tax assessment figures for real estate values rather than securing a formal appraisal. The challenge has come from the sole beneficiary, who is apparently convinced that I am planning on selling the property for the assessed value. With this Proposed Rule in place, he would be clamoring even more vigorously for sanctions, even though the effect is simply to incur an unnecessary administrative expense that ultimately comes from his inheritance.

I appreciate that there is a complete defense to the charge now, and that the addition of this Rule would not change the merits of the question. My point is just that someone who doesn't understand the rules very well already will be further confused and aroused by language like "erroneous and misleading" values.

One change might be to expressly include language that the use of tax assessment values is presumptively not erroneous or misleading. Another might be to carefully and exhaustively define "erroneous and misleading." A third might be to simply delete this redundant provision.

I first wish to state my appreciation and understanding for the work that has gone into these proposals. I’ve worked on enough of these committees to understand the effort that goes into each line and word through a group of people. I also realize that my “preamble” is unlikely to result in any constructive changes in the proposals, but I would still like to share them as part of the commentary, in response to the committee’s own preamble. While expressing these opinions, I hope the more specific comments which should be more constructive will still be duly and seriously considered.

As a preamble to these comments, it seems overall these rules in many cases present a solution without a problem. For the most part Arizona has clear statutory law guiding the substantive aspects of the law which will be governed by these rules. Having appeared in courts across the various Arizona counties, I’ve never found significant problems or issues in the way each court is run, especially in uncontested matters which represent such a large amount of probate matters, and the attempt to enact some rather significant changes for all probate practitioners across the state to minimize the differences between courts in different counties, especially when the changes seem to favor more elaborate rules or procedures, is going to unnecessarily increase the costs to the clients, beneficiaries, minors, and protected persons whom these courts are intended to serve, without a true benefit. Especially when enough discretion is granted under certain rules that each court will end up running things “their” way.

The concern is particularly that these rules unduly burden uncontested matters, unnecessarily multiplying efforts and fees without benefit. From my humble perspective, some of these rules will not ensure the effective conduct of probate cases, but will make them just that more difficult. The focus to reconcile proceedings in contested matters is much more reasonably taken, to ensure opposing parties are not disadvantaged in another county, but that is not addressed so much here, and is much more appropriately addressed in the rules of civil procedure so much of this focuses on other situations. I do, however, applaud the specific allowances for uncontested proceedings as set forth in Proposed Rule 3 D 2.

Second, while it may appear self-serving to take issue with the goal of providing self-service forms for individuals, it seems that the approach is to devalue the work, value, and importance of attorneys who practice in this area. It does not appear to me the bar or the Supreme Court encourages individuals to take on their own personal injury cases, medical malpractice, criminal defense, or other similar matters. It seems to imply that those are serious and difficult cases that should not be handled without an attorney, but probate matters are not. I understand that there is a reality of clients handling these cases themselves, which must be addressed, but I hope the court realizes the mixed message that is sent under these circumstances.

Third, the use of additional probate rules and procedures to deal with fraud and theft seems like something that will not catch any more of the dishonest out there, while creating additional burdens for the honest. This is the type substantive issue properly addressed by law, not court rules.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 2.

I recommend that M include as an additional “Probate Case” the appointment of a successor Custodian under the UTMA provisions, when required by a court, under A.R.S. §14-7668(D), which may be commenced in the probate court solely for this purpose.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 3, D, 2.

This provision is a helpful addition.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 4., A, 1, describes the commencement of a Decedent’s Estate Case only by reference to appointing a Personal Representative, formally or informally, although it includes by reference the statutes by which a determination of probate or intestacy is made. While not terribly common, there are times where an application for probate or determination of intestacy is made WITHOUT the appointment of a personal representative, for instance, where a Will must be probated to confirm its exercise of a power of appointment, but there are no estate assets to administer. So this rule might more completely read, “informal appointment of a personal representation, probate, and/or determination of intestacy” and “formal appointment of a personal residence, probate, and/or determination of intestacy”.., or something to that effect.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 9, A

This requires the Notice to include the Judicial Officer. Currently, the calendaring department in Pima County does not provide this information, therefore, this is going to make the court add that at the time they schedule a hearing, and have that information available in advance. A concern is that the commissioners, for instance, who hear cases in Pima County are somewhat flexible in their schedule, and the officer sometimes will change for whatever reason, and it should be clear that a different commissioner covering the calendar on the day of the hearing should not invalidate the notice given.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 10 C 3 (a)

I concur with Mr. Fleming that this should be limited to the applicable duties, not all.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 10 D 1

This rule relates to the unfortunately common experience of a fiduciary who drops off the map in terms of responses and action, frequently when most if not all of the estate issues are resolved, but the attorney cannot get through to them to complete the required documents or actions to close the estate. This requires a status report that “confirms that all guardian reports, accountings or other required reports have been filed and that all statutory requirements have been met.” In most if not all of these cases, there is work, at least nominal, yet undone, and that is why the attorney is withdrawing. If all statutory requirements (i.e., a closing statement) are done and filed, then the attorney doesn’t need to withdraw in this manner. Therefore, it seems this should be adjusted to add something to the effect of, “or, if such reports have not been filed and/or requirements have not been yet, the status of those to the best of the attorney’s knowledge.” Otherwise you are hamstringing an attorney from fairly extracting themself from the case.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 10 D 2

I concur with Mr. Fleming’s indication that this appears overly broad, probably unintentionally so, but either way, requiring a statement of all fees for all attorneys where not otherwise required by law is intrusively expansive and unnecessary. Even if it is a withdrawal, the requirement to cite unpaid fees is understandable, put paid fees still seems unnecessary.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 10 E

There’s no comment about what this requirement to diligently pursue cases means. A prodigal personal representative is already violating enough general duties under law, this procedural additional seems unnecessary. This seems at best some vague ethical aspiration, and without any practical direction to the attorney, party, or court, I don’t know why it should be added to this.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 11.

The comment to the rule points out the efficiency that can be involved in a telephonic hearing. It is unclear why a full 30 days advance notice is the default for any situation. Since the discretion is already granted to the court official, why start with this onerous requirement? It seems that 5 day notice should be sufficient, but 10 or even 15 days would be much more reasonable, at least for any uncontested matter. If the court does not grant it or the officer does not have time to grant it, then the person requesting it is out of luck, but in many situations that could be accomplished and setting the presumptive time limit would stop what is otherwise an efficient process. As always, if for some reason the officer thinks it inappropriate, this gives them discretion to deny. Or, is this intended so that if you file a motion five days before a hearing, because something happened to your client who is now unable to get to Arizona, the same written request filed with the officer can contain the officer’s override of the 30 day requirement.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 12.

While it is understandable to grant judicial officers reasonable discretion (see my comments on Proposed Rule 11), this Proposed Rule is an example of the fact that many of these grants of discretion lead to the same kind of divergence between the counties that these uniform rules seek to avoid. For instance, here, it says anytime testimony is not required by law, it MAY be set for a non-appearance hearing. This could be of great benefit, for some typical appearance hearings that should come into this would be appointment of a successor UTMA custodian, appointment of a successor Trustee or other instructions or modification with respect to the Trust. However, if Pima County commissioners decide they will hear those on a non-appearance basis, and Pinal County does not, then you have a separate set of idiosyncratic rules, much like those purportedly being addressed by these monolithic changes. I’d rather have each county having its rules which can at least tell me what they are, rather than relying on what will become the custom and tendency for each particular court when broad discretion is granted.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 14.

Since waiver of bond is such an important and common issue in probate proceedings, it would seem that as long as we’re codifying these rules in details, that A. 2 should say, “Waiver of any right, including bond, notice, and priority of appointment.”

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 15.

As written, it appears that all of the orders in non-contested cases, such as Guardianships, Conservatorships, Formal Probates, Trust instructions, etc., would need to be lodged at least five days in advance. If it is the purpose that this rule actually require this, this would drastically change the practice observed in Pima County, and at least that typically seen in other counties as well, that allow parties to present an Order at the hearing for signature. Does the committee see some problem with this general practice, because if not, this rule should somehow be modified or limited. The extra processing step of sending this order to the court in advance each time would add some extra effort and expense to every simple proceeding.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com

RULE 19.

This states that you need to get an order at least 30 days before the scheduled hearing to appoint the physician, attorney, etc. It seems that we commonly get hearing dates scheduled slightly less than 30 days from the hearing. My suggestion would be to make this 25 days, which should avoid the possibility.

Craig Hunter Wisnom
Bogutz & Gordon, P.C.
3503 N. Campbell Avenue Suite 101
Tucson, Arizona 85719
(520) 321-9700
www.bogutzandgordon.com