Guardian Negligence in a Civil Matter

Negligent acts can result in criminal liability.  More commonly, however, Guardians may encounter allegations that they were negligent in the context of a civil lawsuit.  While not facing the possibility of a criminal fine or time in jail, a Guardian in this situation would be facing the possibility of financial loss, impact on their reputation, and a great deal of stress.  The facts that can result in a claim of negligence will vary, but at its core an allegation of negligence would assert that:  (1) the Guardian had a duty to conform to a specific standard of conduct for the protection of the Incapacitated Person; (2) the Guardian failed to fulfill their duty; and (3) that the Guardian’s failure to fulfill their duty caused harm to the Incapacitated Person or their estate.

The law imposes a general duty of care on all of us.  For example, if we drive a car in a negligent manner and cause an accident, we will be held responsible for the damage caused to the other driver and her vehicle.  Similarly, property owners have a duty of care to maintain their property so that people coming onto their property will not be injured.

The law imposes a heightened duty on Guardians who are assigned the responsibility of managing the personal or financial affairs of an Incapacitated Person.  The Certified Professional Guardians’ Standards of Practice provide a specific list of duties that are required of CPG’S.  There are also additional requirements imposed on Guardians based on statutes or case law.

If a Guardian is faced with a lawsuit claiming that they have been negligent in the performance of their duties, the party asserting the claim will be required to prove by a preponderance of the evidence, (that is, more likely than not), that the Guardian breached their duty, that the Incapacitated Person or her estate was injured, and that the injuries were due to the negligence of the Guardian.  Clearly, if a guardian performs their duties in accordance with the CPG Standards of Practice and other accepted professional guidelines, it will go a long way in protecting one from this type of claim.  But if someone makes a claim that a guardian has been negligent and follows through with a lawsuit, even if it is a false claim, the guardian will then be faced with providing evidence to rebut the allegations that their actions were negligent.  Under those circumstances, the venerable phrase “if it’s not documented, it didn’t happen” will come to the forefront.  The guardian will be well rewarded for the time taken to document their activities, the basis of their decision, the taken and why, etc.  The closer to the time of the activity that actions are documented, the better.  While technology provides us with a variety of tools for documenting our activities, ultimately, it won’t matter what system is in place if the guardian does not take the time to use it.

Crime and Punishment

It was the summer of 1987.  My first day in law school, my first class…Criminal Law.  Professor Nock scrawled on the blackboard:  “Dyslexics of the world, Untie!”  And with that the fun began.  Although 20+ years have passed, the fundamental principles and processes involved in the criminal justice system remain unchanged.  At our upcoming “Crime & Punishment” Continuing Education Program for Guardians, [Stay tuned for details on time, date, & location], we will discuss the role of the Guardian when one of their wards is or has been involved in the criminal justice system.  But for now, a little background on some of the basic concepts of criminal law.

For those with a mathematical inclination, the equation for crime is:

“mens rea” + “actus rea” = crime, where mens rea is defined as “a guilty mind; a guilty or wrongful purpose,” (the mental component of crime), and actus rea is defined as “a guilty act,” (the physical component of crime).  The Washington state criminal code includes 4 different mental states:  Intentionally, knowingly, recklessly, and negligently.  In many instances, the severity of the crime, (1^st degree manslaughter vs 2^nd degree manslaughter), will depend on the classification of the perpetrator’s mental state – did he do the act intentionally, knowingly, recklessly, or negligently?  For example, a person can be charged with the crime of 1^st degree manslaughter when he recklessly causes the death of another person, whereas manslaughter in the 2^nd degree occurs when with criminal negligence, one causes the death of another person.  In other instances, the nature or brutality of the illegal act will determine the severity of the crime.  For example, 1^st degree assault involves crimes where one intend to inflict great bodily harm, whereas 2^nd degree assault involves substantial bodily harm.   1^st degree crimes will be punished with greater penalties, (more jail time, higher fines) than those of a lesser degree.

Obviously, an individual’s mental state and capacity play into the determination of whether the person can intentionally, knowingly, recklessly, or negligently commit a criminal act.  Accordingly, there may be times when an Incapacitated Person should not be subject to criminal prosecution, or at the very least should be entitled to a verdict of “not guilty by reason of insanity.”  The “insanity” defense applies if, at the time of the commission of the offense, as the result of a mental disease or defect, the defendant is unable to perceive the nature and quality of the act with which she is being charged, or if she is unable to tell right from wrong.  Competency to stand trial is another concept that may be important when the defendant is an Incapacitated Person.  Incompetency to stand trial depends on the defendant’s mental condition at the time of trial, (as opposed to the insanity defense, which depends on the defendant’s mental state at the time the crime was committed).  If one cannot understand the judicial proceedings and assist their attorney in their defense, then they are “incompetent to stand trial.”  Incompetency to stand trial is not a defense to a crime, but instead requires the delay of the trial.  If the defendant later regains their competency, then the trial can proceed.  It is important to note that being deemed an Incapacitated Person in the guardianship court does not result in a presumption that a person is either incompetent to stand trial or would qualify for the insanity defense.  Proof will be required in the criminal proceeding in order to establish that an individual is either not guilty by reason of insanity or incompetent to stand trial.

Major steps in a criminal case, after the prosecuting attorney’s office has filed charges, include:  arraignment; pretrial detention and/or bail; plea bargaining; trial; sentencing; and appeals.  An arraignment is a hearing before the court, where the defendant is told what crime(s) she is accused of committing.  After being informed of the charges, the defendant is allowed to enter a plea of guilty or not guilty.  The decision on whether a defendant will be detained pending trial, or released upon payment of bail, is also determined by the court.  After arraignment, detention, and bail have been settled, there will usually be plea bargaining between the prosecutor and the defense attorney or defendant.  Frequently, in exchange for a defendant’s agreement to plead guilty, the prosecutor will agree to reduce the charges or reduce the prosecutor’s sentencing recommendation.  Although generally the court will agree to the recommendations made jointly by the prosecutor and defense attorney, the court has the final say, and is not bound by an agreement reached between a defendant and the prosecutor.  In the small percentage of cases that are not resolved before trial, a trial will be conducted, and the prosecutor will be required to prove guilt beyond a reasonable doubt – less than 100% certainty but more than a high probability.  If there is doubt of a defendant’s guilt, and the doubt is based on reason, the defendant is entitled to a “not guilty” verdict.  The final step in the process, (other than an appeal) is the sentencing of the defendant if the defendant is found guilty.

There are no statistics that I am aware of that suggest that Incapacitated Persons have any greater involvement in crimes than the general public.  However, many guardians will encounter one or more situations in their career where their client has been arrested or charged with a crime.  When this occurs, there will be opportunities for the Guardian to advocate for their client.  And as unfamiliar as you as a guardian may be with the criminal justice system, many of the players in the criminal justice system will be equally unfamiliar with the concept of a guardianship or guardians.  Prosecuting attorneys, public defenders, and others may be confused regarding what role a guardian can or should play in advocating for their client.  For the guardian, this is both an opportunity and a challenge.

Finally, while the process unfolds in the criminal court system, the guardian must make sure that he or she complies with the requirements of the guardianship court.  To a certain extent, the proceedings in the criminal court and the proceedings in the guardianship court are like trains traveling on parallel tracks…they may pass in the night but they won’t come in contact with each other.  However, the guardian will want to keep the guardianship court informed of the proceedings in the criminal court, and may seek the guidance of the guardianship court to provide instructions or review a proposed course of action in the criminal proceedings.

Room and Board v Participation

What is the difference between room and board and participation? The answer can be frustrating.

For professional guardians, a portion of the guardian’s fee and administrative expenses, such as attorney fees, may be provided for by a reduction in participation their client is required to pay toward the cost of their care.

WAC 388-79-050(4)(c) provides:

Should the court determine after consideration of the facts and law that fees and costs in excess of the amounts allowed in WAC 388-79-030 (which are a monthly guardian fee advance of $175, administrative costs to establish a guardianship of $700, and administrative costs of $600 for every three year period) are just and reasonable and should be allowed, then the department will adjust the client’s current participation to reflect the amounts allowed upon receipt by the department of the court order setting the monthly amounts.

Italics mine.

The same chapter defines “participation” as “the amount the client pays from current monthly income toward the cost of the client’s long term care.” One may be tempted to assume that this includes a client’s received income (Social Security, Veteran’s benefits etc.) applied towards room and board. However, WAC 388-513 and 388-515 distinguish between room and board and participation.

WAC 388-515-1509(3) provides that for individuals eligible for medicaid only under Home and Community Based Services residing in assisted living (AL) facility, enhanced adult residential center (EARC), or adult family home (AFH), the Department will first allow a deduction for the client’s personal needs (PNA) of $62.79 and second, a deduction for rent and food (room and board). If a client has income after the deductions for personal needs and room and board, they may also be required to pay participation towards the cost of their care. The Department may make additional deductions from the amount of participation a client is required to pay for guardian fees and administrative costs, such as attorney fees.

Thus, for the client who’s income consists of only SSI in the amount of $674 per month, that client will first receive the deduction for PNA of $62.79 and second, the deduction for R&B in an amount up to $611.21. The allowances for personal needs and room and board equal the client’s total income ($62.79 + 611.21 = $674.00), thus there is no additional income that the client would be required to pay as participation towards the cost of their care. Because there is no participation, there is nothing to reduce to allow for guardian fees and administrative expenses.

In the situation described above, DSHS considers court approved fees and costs submitted by the guardian through an Exception to WAC 388-515-1509, with each request considered on an individual basis. While a request for an exception to rule is not always granted, requests for exceptions to rule in excess of the amounts allowed in WAC 388-79-030 are particularly rare.

While no instant solution is available, I imagine this will be a topic of lively discussion for some time and I plan to write about it more in future newsletters. If you have comments or ideas about this matter, please feel free to email me info@rm-law.com.

The Tale of Mr. X

This past year, Judge Mary Law brought closure to a dispute that was two and a half years in the making.  “I’m sorry” she said, “The Plaintiff has not been able to demonstrate that they are entitled to a Judgment. I’m ruling in favor of the Defendant Estate.”

This tale is a real world example of what can happen when a person has a change in circumstances, but fails to account for it in their estate planning.  In December of 2008, Mr. X wished to transfer a piece of property to his nieces.  To facilitate this, one of his nieces downloaded a free quit-claim deed form off of the internet.  Mr. X then took his nieces to his bank to have the quit-claim deed form notarized.  Once the deed was finalized, one of the nieces recorded the deed with the appropriate county auditor’s office.

Sadly, Mr. X died some six months after he had executed the quit claim deed transferring the property to his nieces.  Following commencement of estate administration, the parties discovered that the property Mr. X had quit claimed to his nieces, had been left to his step-daughters in his Last Will and Testament. Mr. X’s step-daughters believed that the nieces had taken advantage of Mr. X and brought a lawsuit against the nieces and the estate.  The lawsuit dragged out for over two years and eventually concluded with a three day trial where the Judge found that the Plaintiff had not met their burden and ruled in favor of the Estate.  While the Estate enjoyed a favorable outcome in the courtroon, it nevertheless had to spend a significant amount of money (think tens of thousands of dollars) to defend itself, not to mention the legal fees of the nieces and step-daughters.

What should Mr. X have done if he had wished to transfer his property to his nieces? Or once an asset is included in a Will is it trapped there forever?  The good news first: Washington Courts have long recognized that simply because you have left an asset to a beneficiary in your Will, it does not mean that you cannot change your mind later.  Going back to the case above, what could Mr. X have done to prevent the lawsuit and transfer his property? If Mr. X had come into our office and explained his wishes, then we could have revoked his prior will, drafted a new will for him that accurately reflected his current wishes, and helped him execute a deed to transfer the property. These steps would have prevented a lawsuit from ever taking place, and probably even more importantly would have prevented a family from imploding by clarifying exactly what Mr. X wished for his property disbursement.

Clearly it is neither advisable, nor necessary to consult with an attorney regarding every financial decision that you make. Our office believes that your estate plan is like a finely tuned sports car. As the owner you should feel comfortable putting gas in it, and maybe even checking the tire pressure. However, if you want to change out the engine, or redo the gear-box it is probably a good idea to take it to a qualified mechanic. Additionally, it is a good idea to bring your estate plan in for a yearly tune up to make sure that there has not been some change major changes in either the law, or your life circumstances that would make it necessary to make some updates. Our office is ready and able to help you with all of your estate planning needs.

Providing for Your Pets

To many of us, our pets are a vital part of our lives. One goal in preparing an estate plan is to provide for those, such as our children or grandchildren, who are dependent on us. We don’t however always consider how we will provide for our pets upon our incapacity or death.

Since 2001, Chapter 11.118 RCW has provided for the creation and use of a Pet Trust to care for our pets when we are unable. A Pet Trust can be a stand-alone document or encompassed within a Last Will and Testament. The creator of the Trust, otherwise known as the “Grantor” or “Trustor,” funds the Trust with assets to cover a pet’s needs for its expected lifetime. In Washington, the Trust will terminate when no living animal is covered by the Trust.

The “Trustee” is the individual named as the administrator of the Trust assets to carry out the Trust terms. A Trustee may make payments to your pet’s care provider, veterinarian or for other expenses as they arise.

Considerations when drafting a Pet Trust are:

1. The name and address of the Trustee and Alternate Trustee;
2. The name and address of the pet’s caregiver and alternate caregiver, including compensation terms;
3. Detailed information about the pet or pets to be covered by the Trust or detailed information such that the pet or pets to be covered by the Trust can be easily identified. You may not always know what pets you will own at the time of your death or incapacity but providing information, such as the whereabouts of current licenses or microchip numbers, of your pets will assist in the determination of which pets will be covered and help prevent fraud.
4. Detailed instructions for the standard of living and standard of care you desire for your pets;
5. A detailed description of the property funding the Trust;
6. Possible tax issues; Trusts are typically subject to income tax;
7. Instructions for the distribution of the remaining property following termination of the Trust; and
8. Instructions for the final disposition of your pet’s remains.

A Pet Trust may not always be the best option when considering providing for your pets upon your death. Other options include a conditional bequest in your Last Will and Testament that provides money to a specific person on the condition that it is used for the care of your pet, or bequeathing ownership of your pet to a specific person along with money for their care.  As always, each individual’s circumstances are unique and it is important to speak with a knowledgeable attorney regarding your specific situation.

Life Changes

Mr. and Mrs. Pennywise have been married for thirty years. They have raised three children, two of their own and one from Mr. Pennywise’s prior marriage, put them through college and now look forward to their golden years. Throughout their marriage, they have run a successful family business and have seen their wealth increase more than they have ever imagined. Two of their children are happily married, blessing them with one grandchild after another, and they look forward to spending the summers with them at their new vacation home in Idaho. When they stop to think about estate planning, their thoughts mostly consist of something like, “We took care of all that with the attorney years ago.”

If your life is this ideal, then the rest of this article is not for you.

The vast majority of us experience issues within our family that will (or should) impact our estate planning.  A more real world example might go something like this:

Two of the Pennywise’s children made it through college, but Timmy Pennywise developed a nasty drug habit and has been in and out of rehab for the last ten years. Mr. and Mrs. Pennywise finally had to say, “No more money, period!”

Susie Pennywise married some deadbeat who hasn’t worked a day of their marriage—and doesn’t help out much with the kids—but seems eager to become involved in the family business, looking forward to the day when he can, “run it all himself.” Meanwhile, Susie works two jobs so she can afford to hire a babysitter. Mr. and Mrs. Pennywise eagerly wait for the day when Susie will see that Mr. Wonderful—just isn’t.

Thankfully, Tommy Pennywise has taken on more than his fair share of the family’s responsibilities. He has worked for the business since he started sweeping up the floors at age 13. As he grew older, he has been instrumental in the business’ success. He now assists his parents with bill paying, errands, and numerous trips to the doctor. Unfortunately, Ms. Pennywise’s health is on the fast decline and Mr. Pennywise is concerned about the impact of long term care on their finances.

Meanwhile, Congress has changed the minimum threshold level necessitating the filing of an estate tax return and Ms. Pennywise’s sister—whom she named along with Mr. Pennywise to make medical decisions for her if she is unable—has passed away.

Hopefully, not all of these scenarios will happen for you (except for the hardworking son/daughter), but they are the kinds of real-world situations that can impact your estate planning. The reality is life happens and certain life changes necessitate review and changes to existing estate planning documents.

Some changes that might impact your estate planning include serious health problems, death of a spouse, changes to net worth, changes to tax, property, probate or trust laws, retirement, changes in business interests, or acquisition of property out of state. Other changes you may wish to consider for estate planning purposes are or may be birth, adoption, death, marriage, divorce or serious health problems of a child or grandchild.

Of course, the list of changes mentioned above is not all inclusive. There are many life, economic and legal changes that may necessitate changes to estate planning documents. This is why our office recommends a yearly review to ensure that your wishes are implemented and are capable of being met. When our clients tell their story, our goal is for each of them to say, “I have reviewed and revised my estate plan this year and I feel comfortable that my wishes will be followed.”

Guardians Report

Most of you are aware that nonprofessional guardians are now required to complete online training modules offered through the Administrative Office of the Courts pursuant to RCW 11.88.020.

What is lesser known about the substitute house bill 1053 is that it provides for follow up by the Court in the event that an account or report is not provided.

RCW 11.92.050(4) has been amended to specify what happens in the event that a guardian fails to file an account or report. The Statute indicates that the Court shall enter an order for one or more of the following actions:

(1)     Enter an order to show cause. At the show cause hearing the Court may remove the guardian and appoint a successor;

(2)     Direct the clerk to extend the Letters of Guardianship for no more than 90 days to permit the guardian to file their report;

(3)     Require the completion of any approved guardianship training made available to the guardian by the Court;

(4)     Appoint a Guardian ad Litem to do an investigation;

(5)     Provide other and further relief the Court deems just and reasonable.

RCW 36.18.016 indicates the fees that may be charged by the Court. House Bill 1053 now requires a fee for filing an accounting.

For filing accounts as required under RCW 11.92.040(2) when the net fair market value of the estate is less than $100K, a filing fee is not required. Guardianship estates with a net value between $100K and $500K must pay $75.00. Estates between $500K and $1M will be charged $150.00. Estates greater than $1M will be charged a filing fee of $250.00.

To date, I have not seen the clerk’s office impose a fee for filing an accounting but I anticipate imposition of the fees to begin in the near future.