OCTOBER 26, 2015 VOLUME 22 NUMBER 39
We’ve made the key points before: don’t sign your home over to your children while you’re still alive, and be very careful about doing your own estate planning without an attorney’s help. This week we’re going to add a couple of other points: do not rely on non-lawyer document preparers for legal help, and don’t try to represent yourself in court.
What kind of case could possibly be so convoluted as to support all of those positions? The Arizona Court of Appeals decision in a simple dispute between Deborah Fitch (not her real name) and her son Warren demonstrates all of those principles.
Let’s start with a bit of background information. Since 2003, Arizona has recognized a category of non-lawyer assistants called “Certified Legal Document Preparers.” The certification is handed out by the Arizona Supreme Court, based on an application and examination process. Document preparers (who often list the initials CLDP after their name) are not supposed to give legal advice, but can prepare divorce petitions, deeds, wills, trusts and other documents without the supervision of an attorney. Opinions about this authority are mixed, but Arizona now has over a decade of experience with its unique program.
How does that relate to Deborah Fitch? In 2009 she visited a CLDP to facilitate the transfer of her home to her son Warren. It is unclear precisely what she told the CLDP, but she signed the document that was presented to her. That document was a quit claim deed, transferring her home from her name alone into joint tenancy between her and her son.
Sometime later she decided that she had made a mistake. She had intended, she said, to sign a “beneficiary deed,” not a quit claim deed. If she had signed a beneficiary deed, Warren would not have gotten any immediate interest in the property, and Deborah would be able to change her mind at any time up until her death.
Deborah asked Warren to sign a deed conveying the property back to her, and negating the quit claim deed. Warren refused. Three years after she initially gave him an interest in her home, Deborah was filing a lawsuit in the local Arizona courts against her son. She sued, incidentally, to get her home back — and also to make him repay the student loans she had paid for him. Deborah had an attorney in that lawsuit, but Warren chose to represent himself.
Deborah’s attorney asked Warren to admit that his mother had intended to sign a beneficiary deed rather than a quit claim deed. Warren did not respond properly to that request, but did file an affidavit from the document preparer that claimed Deborah had understood the difference and had chosen to sign a quit claim deed. The trial judge gave Warren a second chance to respond to the request from his mother’s lawyer; he instead filed something he called a “motion to disqualify counsel in violation of ethical rules, motion to dismiss, response to amended complaint.”
Eventually, the trial judge granted Deborah’s attorney’s request for summary judgment in her favor, ruling that the quit claim deed was invalid and that Warren owed his mother for her loan payments on his behalf. The judge also granted Deborah an award of her attorney’s fees. Warren appealed.
The Arizona Court of Appeals disagreed with the trial judge. Warren might not have properly denied the assertion that Deborah misunderstood the nature of a quit claim deed, ruled the appellate court, but that is ultimately irrelevant. What matters is what Deborah understood, not what Warren thought she understood. And on the subject of Deborah’s understanding, the appellate judges noted that the affidavit from the document preparer created a dispute about her actual understanding. The trial court should not have granted summary judgment on that issue, ruled the Court of Appeals.
Not everything was reversed, however. Although Warren had asked for reversal of the judgment against him for the student loan payments, he didn’t actually introduce any arguments about why that item should be reconsidered. But, since most of Deborah’s claim was being sent back to the lower court for a trial, the appellate court did reverse the award of attorney’s fees. Fees v. Fees, October 20, 2015.
Could a lawyer have changed the course of the dispute between Deborah and Warren? We’d like to think so. A lawyer would have strongly counseled Deborah against signing a quit claim deed, and made sure she clearly understood the effect of the decision before she signed. In fact, a lawyer might well have declined to prepare the deed that eventually caused Deborah so much trouble. What she really needed (a will, powers of attorney, possibly a beneficiary deed) could have been prepared inexpensively by her lawyer — had she consulted one.
Warren, too, skipped legal representation once the dispute landed in court. Had he gotten good legal advice, he could have been guided as to legal procedures, and he might not have lost in the first instance in the trial court. He (and his mother, for that matter) would have saved significant expenses and delays incurred by having to go to the Court of Appeals — and back to the trial court for a repeat round of procedures.
Had this mother and son both had good legal representation, they might well have been able to work something out without the expense of court proceedings and appeals. Would they once again be a loving family, trusting one another implicitly? Perhaps — but it seems pretty unlikely that such an outcome remains possible now.
One Response
Bob, There are good and bad CLDPs, just as there are good and bad attorneys. Case in point, we refused to amend an A/B Trust that became irrevocable on the death of the first spouse as to the decedent’s trust, although we could have amended the survivor’s trust. The family then took it to an attorney, who proceeded to help them find “a way around.” The end result is that some of the step-children will not receive the portion of the trust estate to which they were entitled when it became irrevocable.Does this make all attorneys unethical and incompetent? Certainly not. The cases that hit the court of appeals are usually those with attorneys involved, not document preparers. As I recall, in the estate planning arena there are 2 cases which involved document preparers.The bottom line is to make sure that the person doing the work is competent and ethical, and to obtain legal advice when necessary.