Memento Mori Estate Planning Podcast Attorney Karl D. Shehu

A conservatorship is a legal arrangement in which one person or organization is appointed to manage the financial affairs and/or daily life of another person. The conserved person must be incapable of caring for himself or his property. In Connecticut, the Probate Court has the authority to name a conservator. This episode explores the type of conservatorships available in Connecticut, as well as the responsibilities of a conservator toward the conserved person.

There are two forms of conservatorships in Connecticut. While a conservator of the estate manages the property of a conserved person, a conservator of the person manages the personal needs of the conservatee. A conservatorship may be voluntary or involuntary, and its duration may be temporary or permanent. When appointing a conservator of the person, the Probate Court is required to find the “least restrictive means of intervention.”

Because the Probate Court endeavors to afford the conservatee the utmost independence and self-determination, there is not a uniform list of duties for a conservator of the person. Generally, a conservator of the person is charged with providing for the comfort, care, and maintenance of the conserved person. In the case of extreme incapacity, the conservator may be responsible for the custody of the conserved person. He may have the authority to consent to medical treatment on behalf of the conservatee or find a residence for the conserved person. In other cases, the duties of a conservator may be triggered upon the occurrence of certain events, such as coma, medical settings, seizures, or institutionalization.

A conservator of the estate is required to inventory the conservatee’s assets. He must document the income and expenditures of the conserved person, and he must provide a financial report to the Probate Court at least every three years. This duty to report is excused if the conservatee is a Medicaid recipient. In many cases, the conservator must research and apply for governmental benefits on behalf of the conserved person.

Connecticut permits the appointment of a conservator to manage the care and/or financial accounts of an incapable adult. Depending on the type of conservatorship established by the Probate Court, the conservator may have different duties vis-à-vis the conserved person. In all cases, the duties of a conservator will preserve, to the fullest extent possible, the independence and constitutional rights of the conservatee.

Guardianships and conservatorships are methods of administering the affairs of “protected persons.” A protected person is someone judged by the Probate Court to be unable to manage his property or needs.

The Probate Court has jurisdiction over both conservatorships and guardianships. It has the right to determine the title, right to use, and right to possess any real property or personal property belonging to a minor in a guardianship or an adult in a conservatorship.
Guardianships and conservatorships are similar in many ways, and laymen often use the terms “guardian” and “conservator” interchangeably; however, there are some important differences. In Connecticut, a guardian is appointed for a minor or, in some cases, a developmentally disabled adult.

The role of guardian is bifurcated into two distinct roles. In the case of a minor child, a guardian of the person is appointed in the absence of a parent. A parent’s absence may be due to his death or the removal or termination of his parental rights. A guardian of the person is charged with the obligation of caring for and controlling the child, making major decisions regarding the child’s welfare including medical treatment, and making funeral arrangements upon the death of the minor.

The Probate Court may also appoint a guardian of the person for an individual with intellectual disabilities. In most cases, this type of guardianship is an extension of parental rights beyond the age of majority, and it typically applies to a person who was disabled from birth or sustained a traumatic brain injury during childhood. The intellectual disability must be severe, such that the person is totally unable to meet essential requirements for his physical health or safety. Additionally, the person must be totally unable to make informed decisions regarding his care.

In Connecticut, the second type of guardian—a guardian of the estate—is necessary if a minor owns property in excess of $10,000. This type of guardian handles the financial aspects of a minor’s life. A guardian of the estate must be appointed even if the child’s parents are living and have custody of the minor. Since 2018, a guardian of the person for a individual with intellectual disabilities may seek permission from the Probate Court to manage the disabled person’s finances. The individual with an intellectual disability must have less than $10,000, and the guardian’s authority to manage that person’s finances would terminate as soon as the individual has more than $10,000. This monetary limit is one reason that guardianships are not customary for adults.

A conservatorship is the typical vehicle for managing the needs and property for an adult in Connecticut. When a conservator of the person is appointed, the Probate Court affords the conserved person the greatest amount of independence and self-determination, and it provides the conservator with the least restrictive means of intervention in specific, limited areas of the conserved person’s life. These areas may include the authority to establish a residence for the conserved person, consent to medical treatment, preserve personal effects, and provide for the care and comfort of the conserved person. A conservator of the estate is tasked with managing the finances and property of the conserved person.

Guardianships and conservatorships are legal structures for providing for those who cannot adequately provide for themselves. Generally, a guardianship is used for minors, and a conservatorship is for adults.

A charitable remainder trust is an often-overlooked estate planning tool for persons with charitable (or tax-planning) goals who fear losing the use of assets during life. This article provides an overview of charitable remainder trusts for planning during life and after death, outlining the flexibility, risks, and tax benefits of the trust.

Like all trusts, a charitable remainder trust involves the transfer of assets to a middleman, called the trustee. The trustee distributes the assets to persons (or entities) known as beneficiaries. A charitable remainder trust has two categories of beneficiaries. The “life” beneficiary is often the donor (the person creating the trust and contributing the assets). However, it may be anyone named by the donor, provided that at least one beneficiary is not a charity. This beneficiary receives a distribution from the trust for the rest of his life (or for a stated term not to exceed twenty years) on an annual basis. At the end of the beneficiary’s life or after the stated term, the assets remaining (the remainder) in the trust are distributed to the “death” or “remainder” beneficiary for a charitable purpose. The “death” or “remainder” beneficiary must be a charitable organization or to a continuing trust established for charitable purposes.

Flexibility

It is important to note that charitable remainder trusts are irrevocable. As such, they are not the solution for every individual with charitable objectives. A charitable remainder trust has a “Jekyll and Hyde” level of flexibility. At creation, the trust is extremely flexible. The donor creates the rules governing the charitable remainder trust. Those rules need only to fall within the guidelines established by the Internal Revenue Code.

After the charitable remainder trust has been created, this irrevocable trust can rarely be changed. One exception to this principle is that the donor may retain the right to change the charity that will receive the remainder distribution. However, the rules governing the trust may permit the donor to have input. The donor may name the trustee to manage the trust assets. In many cases, the donor may also serve as trustee.

Risk

The assets in a charitable remainder trust are often invested in securities. Therefore, the trust assets are at the risk of the market. Unsophisticated trustees should utilize the services of a trusted and competent investment advisor.

Taxation

A charitable remainder trust affords tax benefits to both the trust and the donor. As a charitable entity, a charitable remainder trust pays no taxes on income or capital gains.

Similarly, since a donor can transfer cash or property to a charitable remainder trust, a donor can realize tax benefits through careful planning. Generally, naming a charity as a beneficiary of a Will or revocable living trust provides no immediate tax benefit to a donor. Those instruments may be changed, and the donor may choose to remove the charity as a beneficiary at any time. In contrast, as an irrevocable trust, a charitable remainder trust allows the donor to take an immediate tax deduction for his contributions to the trust. This immediate deduction is appealing for those incorporating charitable planning into their estate plans.

If the remainder beneficiary of the charitable remainder trust is a private foundation, a donor’s deductions will be subject to the income limitations for gifts to private foundations. Donors who choose to transfer appreciated securities or property can avoid capital gains taxes while receiving payments from the undiminished proceeds from the sale of transferred property.

Overall, charitable remainder trusts should be a consideration for any individual seeking to leave assets to charities post death. Potential donors should weigh the irrevocable nature of the trust against its tax benefits.

Should I have a will or revocable living trust? The answer to this question is crucial to estate planning. Its answer informs the very building block of a workable plan. Your goals cannot be addressed until you have reached a decision on your plan’s “anchor instrument.” Every estate plan is anchored by a core document from which other components of the plan proceed. This instrument is either a will or a revocable living trust.

Many people contact an estate planning attorney seeking a will. Television, books, and tradition have elevated wills to a place of prominence in the minds of laypeople. Their parents, relatives, and friends might have executed a will, so it’s often the instrument with which most people are familiar. On the other hand, a trust sounds daunting. “Isn’t it for rich people? It must be expensive.” Is a will right for you 2022?

A will costs more in the long run. While it’s true that will-based estate plans require a lower initial investment, most costs arise many years after the will has been drafted. An average married couple might spend between $1,500 and $3,000 on a will. After the first spouse dies, the surviving spouse will commence a probate proceeding. On top of probate costs, that spouse will spend between $8,000 and $10,000 in attorney’s fees. After the surviving spouse dies, the estate’s heirs will incur another $8,000 to $10,000 in attorney’s fees. Thus, the actual cost of a will based plan lies between $17,500 and $23,000.

A trust-based plan, in contrast, does cost more up front. Trust drafting fees may run between $2,000 and $6,300. However, because there is no probate oversight after death, a married couple would save on post-death attorney fees. Thus, the average couple can expect to save between $7,000 and $20,000 in attorney fees by opting for a revocable living trust instead of a will.

By drafting a will, a couple makes a deliberate choice to settle their estates via the probate process. Upon the death of a spouse, that spouse’s assets will likely be frozen until the Court determines the rightful heirs of those assets. This process may take one year or more depending on the complexity of the estate. Additionally, all of the estate’s assets become a matter of public record.

A revocable living trust mostly avoids probate in Connecticut. Assets remain private. Since the trust owns all assets, there is no period during which assets are frozen following a trust-maker’s death. Beneficiaries may use and enjoy all of the trust-maker’s assets immediately after his or her death.

A will is a testamentary instrument, meaning that it governs the disposition of property following a person’s death. It comes into effect ONLY upon a person’s death, and it has no legal authority to convey property or express a person’s wishes as long as that person remains alive. Though often used in the context of estate planning, a trust is not solely a “death” instrument. Generally, a trust is any type of legal relationship in which one person (the trust-maker) gives a right to second person (the trustee), and that trustee holds that right for the benefit of a third person (the beneficiary). This distinction between a will and trust is crucial when a person experiences a period of sickness or incapacity.

In the twenty-first century, very few people experience death as an instantaneous event. Rather, modern medicine has made it possible to care for a person during periods of significant decline. During these periods, a person may not be able to care for himself or make decisions regarding his property or legal rights. In these situations, the Court will step in and appoint a conservator. This conservator essentially will step in and appoint a conservator to take control of a person’s property. The conservator may or may not be related to the person conserved. A will, as a testamentary instrument, has no ability to name a conservator for a

An estate plan is not a stack of documents. At its heart, estate planning involves arranging one’s property and affairs for use during life and disposition after death. A person’s “gross estate” generally includes two types of property: probate and non-probate. This article provides a brief overview of these two approaches to property distribution after death.

Probate property refers to assets that must pass through the Probate Court system before being distributed to heirs. A probate case begins when a person (usually a potential heir of the deceased) asks the Court to open a proceeding for the administration of a decedent’s estate. The Court will determine whether the deceased had a valid will. If so, the Court will appoint the executor named by the will to manage the estate’s affairs. Estate property will be distributed in accordance with the testator’s (the will maker’s) intent.

If the Probate Court decides that the deceased did not have a valid will, the Court will name an administrator to oversee the financial affairs of the estate and dispose of the decedent’s assets. After satisfying the costs of administration, probate fees, and debts of the estate, the Court will distribute the deceased’s property in accordance with the laws of intestacy (“intestacy” means “without a will”). The laws of intestacy vary from state to state. In Connecticut, intestate succession is codified in the General Statutes.

In contrast, non-probate property refers to assets that have been transferred either during a person’s lifetime or after death according to a survivorship mechanism. Non-probate property passes to an heir automatically upon the owner’s death, either by operation of law or as a result of contract rights. This means that the property is distributed privately, without the involvement or oversight of the Court.

Most people have some form of non-probate property. These assets are held in joint bank accounts, payment on death accounts, trusts, retirement accounts like IRAs and 401(k)s, life insurance policies, and some forms of titling real estate. Basically, any account or title that requires a beneficiary to be named is likely non-probate property.

In Connecticut, real estate is probate property by default. Hence, title would pass to the deceased’s heirs according to the provisions of the Will or the state intestacy statute. However, if the title to the property names the owners as “joint tenants with rights of survivorship,” an owner’s interest will pass to the surviving owner(s) upon his death by operation of law, thereby avoiding probate proceedings. The deceased owner’s interest in the property is extinguished upon his death, and it cannot be inherited by his heirs unless he is the last surviving owner. In the latter scenario, when the last owner passes away, the property will descend to his heirs.

Descent and distribution of property is dependent on a few factors. Non-probate property avoids Court and passes automatically upon a person’s death. The Probate Court distributes probate property according to the provisions of a Will or, in the absence of a Will, according to the laws of intestacy codified in the Connecticut General Statutes.