EMERGENCY TEMPORARY GUARDIANSHIPS AND TRUSTS
Under Florida law, prior to the appointment of a permanent guardian but after the filing of a petition to determine incapacity, a probate court may appoint an emergency temporary guardian (“ETG”) for the person and/or property of an alleged incapacitated person. Before the appointment of an ETG, the court must specifically find that there appears to be imminent danger that the physical or mental health or safety of the person will be seriously impaired, which would be sufficient grounds for the appointment of an ETG of the person. Likewise, if the court determines that the person’s property is in danger being wasted, misappropriated or lost, then an ETG of the property may be appointed.
Until recently, there was no clear guidance as to what effect the appointment of an ETG had upon the ability of the alleged incapacitated person to make changes to his or her estate planning, particularly in the case of a trust or trust amendment. In the July 2012, the Fourth District Court of Appeals provided such guidance in the court’s opinion of Jasser v. Saadeh.
In Jasser, Karim Saadeh, was an elderly widower who emigrated from Jordan with his wife and three children and later became a very successful businessman. Shortly after Mrs. Saadeh passed away, Mr. Saadeh met a younger woman and loaned her a significant amount of money. His children became very concerned that their father was not fully capacitated and expressed their concerns to Saadeh’s estate planning attorney. Subsequently, the children initiated a guardianship proceeding against him which resulted in the appointment of an ETG. Following the hearing on the petition for appointment of an ETG, the court appointed a professional guardian and removed all of Saadeh’s rights except for his right to vote. The following day, two of the three examining committee members filed their reports which found Saadeh to be completely capacitated. As a result, Saadeh’s long-standing attorney filed an emergency motion to dissolve the guardianship. Shortly thereafter, the professional ETG’s attorney and the court appointed counsel for Saadeh entered into an agreed order to resolve the guardianship. One of the provisions of the agreed order provided that Saadeh would execute an irrevocable trust funded with all of his assets that named his children as co-trustees and that the pending incapacity proceedings would be dismissed.
Upon a motion for clarification of this agreed order, the court conducted a hearing whereat it determined that all of Saadeh’s rights, except for the right to vote, had been previously removed. Notwithstanding this fact, the ETG and her counsel directed Saddeh to execute a new irrevocable trust.
At a later hearing, the court permitted Saadeh to substitute his long-standing attorney for the court appointed attorney. Also, the court commissioned a new committee but allowed the guardianship proceeding to continue. This new committee unanimously found Saadeh to be totally capacitated and the trial court properly dismissed the petition to determine incapacity.
As a result of this dismissal, Saadeh filed a petition to set aside the irrevocable trust. The trial court subsequently determined that its prior order did not authorize the creation of an irrevocable trust and that since there was an ETG appointed with the power to contract, the ward had no legal capacity to enter into any contracts, including the trust agreement. Accordingly, the trust was deemed invalid and void. The rationale behind this ruling was that when an individual’s rights are removed and delegated to a guardian, temporary or permanent, those rights cannot be simultaneously be exercised by the individual and the ETG. Therefore, the irrevocable trust was deemed void even though two separate examining committees found Saadeh to be totally capacitated contemporaneously with the execution.
The Jasser court distinguished this case from Holmes v. Burchett. In Holmes, an ETG was appointed for the ward. The trial court refused to permit an attorney retained by the ward from representing her during the incapacity proceedings. The appellate court concluded that until the ward is declared incapacitated, she is presumed to have capacity to contract and therefore to substitute her own privately retained counsel for the court appointed attorney. The Jasser court distinguished its ruling from Holmes since Holmes did not mention what rights were conferred to the ETG. Accordingly, the Holmes opinion does not stand for the proposition that even though a legal right to contract is removed from a ward, the ward continues to maintain the right to contract until found to be incapacitated.
Moreover, the Jasser court held that at the time of the execution of the trust, the right to contract was removed from Saadeh, as confirmed by the parties’ acknowledgement to the court the same day the trust was executed. Therefore, consistent with Section 736.0402 (1) Florida Statutes the court determined that “a trust is created only if a settlor has capacity to create a trust.” The Jassercourt held that where there was an ETG who was appointed with the power to contract, the alleged incapacitated person/Ward could no longer exercise that power. Moreover, the court held that when a trust is executed by a ward who is the subject of an ETG, such a trust is deemed to be void.
Should you or a loved one become the subject of a contested guardianship proceeding, an experienced Florida guardianship lawyer can advise you about your rights. Call the attorneys at Adrian Philip Thomas, P.A. for a free consultation.