In the case of In re Conservatorship of Rhea Brody, No.
332994, the Michigan Court of Appeals (MCOA), affirmed the lower court’s
appointment of a conservator over Rita Brody, an adult, under the Estates and
Protected Individuals Code (EPIC) MCL 700.5101 et seq. This is the second case concerning this family to be
challenged by Robert Brody, the first being In
Re Rhea Brody Living Trust, No.330871 in which Robert was removed as
trustee and Mary Lyneis appointed trustee.
Robert and his son, Jay Brody now
challenge the appointment of Lyneis as conservator of Rhea’s personal assets. While
agreeing with the court that Rhea is incompetent, he argues that the court
erred in concluding that Rhea “has property that will be wasted or dissipated
unless proper management is provided.”
The court turned to Article V of
EPIC, providing for individuals under disability stating that “the court may
appoint a conservator…in relation to individual’s estate and affairs if the
court determines both” that the individual can’t manage property because of
mental illness and that the individual has property that will be wasted or
dissipated unless proper management is provided. These prerequisites must be
established by clear and convincing evidence.
The probate court considered Rhea's
circumstances and the nature of each of her personal assets—a Fifth Third bank
account for tax refunds, an individually-held IRA, a jointly-held Chase Bank
account, and jointly-owned homes in Michigan and Florida—before concluding that
the requirements of MCL 700.5401(3) had been met by clear and convincing
evidence.
Robert’s arguments of note:
1.
It was improper for the probate court to
consider joint assets when evaluating the risk of waste or dissipation
because a conservator would be unable to change the nature of jointly-owned
property.
The court: Although case law precludes
a conservator from changing the nature of joint accounts after the
conservator's appointment, it does not limit a conservator's power to manage
the accounts or exclude joint assets from being considered at the
conservatorship hearing.
2.
The probate court erred in appointing a
conservator to act on behalf of Rhea because Robert held a durable power of
attorney (DPOA) and was in a position to prevent waste and dissipation of
Rhea's estate. At the very least, according to Robert, he should have been
given priority over Lyneis as a potential conservator.
The court: The existence of a DPOA does
not prohibit the appointment of a conservator, and selection of an individual
to be appointed as an incapacitated person's conservator is a matter left to
the discretion of the probate court. The court noted that testimony
established that Robert didn’t handle matters using DPOA and was unduly
influenced by son, Jay, thus not competent to be conservator.
Under MCL
700.5409, a protected individual's spouse is entitled to consideration for
appointment as conservator, and is granted priority over all other individuals
except “[a] conservator, guardian of property, or similar fiduciary
appointed or recognized by the appropriate court of another jurisdiction in
which the protected individual resides,” MCL 700.5409(1)(a).
As Rhea's husband,
Robert was entitled to priority consideration unless the probate court considered
an independent fiduciary and found him or her unsuitable. The court noted that Lyneis,
as trustee and independent fiduciary, had statutory priority over Robert,
despite Robert's marriage to Rhea. MCL 700.5409(1).
Question. In what
“appropriate court of another jurisdiction” was Lyneis appointed giving her
priority?
3.
The probate court’s appointment of a conservator
was an abuse of discretion since there was no evidence that any asset of the
estate had been wasted or dissipated.
The court: The Legislature's use of the
word “will” to modify “be wasted or dissipated unless proper management is
provided” in MCL 700.5401(3)(b) supports the probate court's decision to focus
on the likelihood that assets will be prospectively wasted or dissipated if a
conservator is not appointed.
The MCOA, which covered more issues than those presented, affirmed the lower court on all points and found the Robert was unsuitable because Jay, the son, could manipulate his father to the Rhea’s detriment.
The MCOA, which covered more issues than those presented, affirmed the lower court on all points and found the Robert was unsuitable because Jay, the son, could manipulate his father to the Rhea’s detriment.
Labels: conservator, durable power of attorney, MCL 700.5401, MCL 700.5409, probate appeal, probate court, trustee, undue influence
