Any person appointed as a guardian in an estate context will be under close scrutiny to act in the estate’s best interest. But a recent Arkansas Supreme Court case makes clear that the definition of “best interest” is relative. Expenditures that may seem excessive for one person may be totally appropriate for another.
In Stautzenberger v. Stautzenberger, two siblings filed suit against their brother alleging mismanagement of their mother’s estate. Unrefuted evidence showed that the son had “always” taken care of his mother and held a power of attorney before becoming her guardian. He testified that his criteria in making expenditures were to consider what his mother had “historically” done. While he admitted spending the estate’s assets liberally, he said that he wanted to maintain his mother’s generous spirit in his management of the estate. While the court allowed expenses such as gifts to family, it disallowed over $285,000 in church donations, support paid to other friends and relatives and other items,and found the son personally liable for at least forty percent of those claims. He appealed the disallowed expenses as well as his personal liability for them.
On appeal, the Arkansas Probate Code’s requirement of a guardian to “care for and maintain the ward” was pivotal. The state’s guardianship statute was also cited, requiring a showing that any “action would be advantageous to the ward and his or her estate.” The Arkansas Supreme Court found that the son’s expenditures had been made to keep his mother living according to the standards she had maintained prior to the guardianship and that the law “does not require that a ward be maintained in an austere and joyless environment.” The case was remanded for a second look at the expenses using these criteria.
This case is a good example of applying the law on a “case-by-case” basis. While the law is applicable to everyone, how the law is interpreted based upon different circumstances is up to the court to decide. Consulting a qualified estate planning attorney for advice before making significant expenditures can be crucial in the approval of a guardian’s actions.
- Estate Planning is Essential Whether You Are Married or Not - April 25, 2018
- Income Tax Basis in Estate Planning – Part 2 - April 23, 2018
- The Downsizing Generation: How to Handle a Surplus of Stuff When a Loved One Ages - April 18, 2018