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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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Author Messages

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


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”.

22 Sep 2011 05:28 PM
Robert Way
c/o Bridget O'Brien Swartz
3200 N. Central Avenue
Phoenix, AZ 85012

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


23 Sep 2011 12:07 PM
Aileen B. Kokaska
5216 Lawn Avenue
Western Springs, Illinois 60558

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.


23 Sep 2011 12:42 PM
Lisa M. Price
National Certified Guardian
Licensed Fiduciary
Principal, Entrust Fiduciary Services, Inc.

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.

J. R. Rittenhouse

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


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

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

Hon. Rosa Mroz
Presiding Probate/Mental Health Judge
Maricopa County Superior Court
125 W. Washington St.
Phoenix, AZ 85003
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