Last week Elder Law Issues reported on the Arizona Legislature’s adoption of the Arizona Trust Code, based on the Uniform Trust Code. Governor Napolitano has since signed the Trust Code into law effective January 1, 2009. But that is not the only change adopted in the current session. The legislature also passed, and Governor Napolitano has signed, another new law affecting the practice of elder law.

House Bill 2836 will not have the sweeping effect of the Arizona Trust Code, but it does address two narrow issues that recur in guardianships and conservatorships: Who pays the fees and costs associated with a guardianship or conservatorship petition, especially when no guardian or conservator is ultimately appointed? And what powers does a conservator (of the estate) have over the ward’s property after the ward’s death?

Fees. Under current law the petitioner’s attorney, the attorney appointed by the court to represent the ward and the attorney representing the proposed guardian and/or conservator can all be paid from the ward’s estate after appointment of a fiduciary. The court-appointed investigator’s fees and court filing fees can also be paid from the ward’s assets. When a petition is not granted, however, there is no authority for paying any of those individuals -- apparently on the theory that the petition probably was denied because it had no merit.

In the real world of guardianship and conservatorship, however, things are seldom so clear-cut. A family member might decide that a marginally competent loved one should be permitted to establish a trust, or sign a power of attorney, rather than be subjected to court proceedings. Other individuals might step forward and be appointed, even though the original petition was well-taken. In short, there are many reasons a petition might not be granted, even though supported by the evidence.

The new law allows the court to consider the merits of individual cases, and order fees and costs paid from the appropriate party. With luck, it will encourage good-faith efforts to settle contested proceedings. Although a law permitting the fees to be paid from the ward's estate may seem to raise the specter of higher legal costs, it should actually make it easier to settle close cases without forcing family members into more protracted court proceedings.

Death of ward. Existing law allows a conservator to "endorse" his or her letters to effectively probate a deceased ward’s estate within the conservatorship proceeding. The new law makes it easy to avoid even having to take those steps in cases where the remaining assets are small. Now a simple affidavit submitted with waivers from those entitled to receive the ward’s estate will allow the conservatorship to be closed without a formal accounting. The cost savings in at least some cases should be significant.

This new law takes effect sometime in September, depending on the actual date of adjournment of the Legislature (90 days after adjournment sine die, to be unhelpful but precise). In coming weeks we will detail a number of other changes adopted by the legislature and the courts this spring, including further explanation of the far-reaching effect of the Arizona Trust Code and the broadly-written statewide probate rules under consideration by the Arizona Supreme Court. While the new guardianship/conservatorship law described above may take small steps toward greater efficiency for clients and wards, both of the other changes are likely to significantly increase the cost and complexity of probate, guardianship and conservatorship proceedings, and estate planning generally.

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