If you act as guardian or conservator, you know that it can be a challenging job. Sometimes you need legal counsel. If you incur attorney fees, can you charge them to the estate?
The general rule is that you can collect your attorney fees from the estate. There are exceptions. If your actions benefit you but not the estate, for example, you may have to pay those fees yourself.
A South Dakota case
When Martin Bachand suffered a head injury in 2006, he lived with Beverly Sears. She provided care and they stayed together, though they were not married.
The court appointed Mr. Bachand’s son Michael as guardian in 2007, and then as conservator in 2008. Father and son had disagreements, but the guardianship and conservatorship continued until 2010. After Michael had a stroke, Mr. Bachand needed a new guardian and conservator.
A local businessman got the nod as conservator, and began to handle Mr. Bachand’s finances. Beverly Sears was appointed as guardian, empowered to take care of Mr. Bachand’s living arrangements and medical care.
As Ms. Sears also developed her own health issues, care of Mr. Bachand became more complicated. Several times outside caretakers came in, at some expense (paid from Mr. Bachand’s assets). Son Michael began to think that his father ought to move to an assisted living facility.
In August, 2016, Michael filed a petition with the guardianship court. He asked for Ms. Sears’ removal as guardian, and for an order authorizing placement of his father. He also argued that Ms. Sears had an interest in continuing the guardianship and placement, since part of her own living costs, house cleaning and meal preparation came from his father’s assets.
Ms. Sears hired an attorney to defend her position as guardian. Ms. Sears agreed to step down as guardian, provided that Mr. Bachand remained in her home. At the conclusion of those proceedings, one question remained: should Mr. Bachand’s estate pay Ms. Sears’ attorney fees?
Who pays the attorney fees?
The probate judge listened to arguments on both sides of the attorney fees question. Ultimately, she decided that it was not “appropriate” for the estate to pay those fees. She was very clear in her ruling: she did not decide that the fees were unreasonable or excessive, but did conclude that Ms. Sears should pay her own attorney fees.
The South Dakota Supreme Court disagreed. The state’s highest court pointed out that a guardian is permitted to hire counsel. The resulting attorney fees can be charged to the estate if there was a necessity for legal representation and the fees were reasonable. The probate judge had not addressed those questions adequately.
Mr. Marchand’s conservator had argued that only he could hire an attorney, since he was in charge of the finances. Not so, ruled the appellate court — a guardian may secure legal representation without getting a conservator’s approval.
Michael Marchand insisted that the attorney fees were unreasonable. The total bill was for a little less than $20,000. That included time spent analyzing Mr. Marchand’s assets and income, and other actions arguably not related to the guardianship. Ms. Sears and her attorneys pointed out that they needed financial information to determine whether Mr. Marchand could afford to remain in Ms. Sears’ home.
The probate judge mentioned in her ruling that she was partly relying on Ms. Sears’ past actions in the guardianship case. The judge did not explain exactly what that meant, though, and the Supreme Court was left to wonder how to review that element. Any prior misbehavior on her part might — or might not — be related to the current guardianship question, noted the appellate judges.
The Supreme Court decision did not approve the payment of attorney fees. Instead, the court reversed the probate judge’s order denying those fees, and sent the case back for further proceedings.
At the new hearing, the probate judge will need to consider whether Ms. Sears required legal counsel, as well as the reasonableness of the fees actually charged. The Supreme Court also specifically directed the probate judge to lay out a clear record on whether Ms. Sears’ past actions are relevant in deciding the current attorney fees question. Conservatorship of Bachand, January 24, 2018.
Would the same approach be applied in Arizona courts? Probably. South Dakota, like Arizona, adopted the Uniform Probate Code (and its provisions on guardianship and conservatorship). The two systems are similar, though not identical.
Arizona courts would likely be persuaded by the South Dakota precedent, though they would not be bound by it. The fact that it is based on statutes similar to Arizona’s would be very helpful.
Guardians — and conservators — may need legal counsel from time to time. In fact, they may require regular consultations with competent lawyers. The system usually makes it easy for fiduciaries to seek legal advice. Probate courts will almost always approve regular access to competent lawyers.