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Probate abuse: The candid reality in Texas and beyond

With 2014 bringing a ninth year of following the probate abuse issue, Estate of Denial® will likely continue receiving almost daily inquiries of what to do or how to protect oneself in these cases. As a non-lawyer who has experienced and observed much, the best answer of “not a whole lot” remains the simplest and not surprisingly, the least welcomed. With a magic pill or silver bullet usually the goal, explanations of the “why” aren’t usually sought though this article will attempt to explain disturbing realities of which the public should be aware.

What is probate abuse?

First, let’s define probate or estate abuse. These actions are an Involuntary Redistribution of Assets (IRA) perpetrated through the use of wills, trusts, guardianships or powers of attorney and used to divert assets from intended heirs or beneficiaries. These acts are an organized, systemic looting of property and freedoms occurring in courthouses, legal offices and associated venues across this country.

Though often perpetrated by a combination of disgruntled family members, wannabe heirs and members of the legal industry (lawyers, judges and other court-related personnel), financial professionals from CPAs to banks sometimes play a role. In guardianships, similar stories from across the country surface in which Adult Protective Services (APS) employees, professional guardians, social workers as well as medical personnel responsible for evaluations (physical and psychological) and even proprietors of facilities that house incapacitated or disabled individuals are involving themselves in questionably motivated guardianship cases. Call it asset looting, property poaching or estate hijacking – any of these parties can (and too often do) derive direct or indirect benefit from abusive probate actions.

Two dangerous mindsets cause people to become more vulnerable. First, people think they don’t have enough money to be a target. Second, they think that “proper estate planning” will protect them.

Wealth is relative – there’s always someone with more, someone with less and any estate can be targeted. IRA can happen to anyone. Estates of modest values have significant appeal – as much as higher dollar estates – as assets can be enough to go after, but not so much that legitimate heirs or beneficiaries can cost effectively defend their inheritance rights in court.

Legal consumers should understand that “proper estate planning” does not provide the security espoused in legal industry product sales pitches, but it is necessary. It should be done, however, with the knowledge that wills, trusts, guardianships and even powers of attorney are not fail safe mechanisms for protecting assets. In fact, today’s legal environment is a breeding ground for often using these instruments in ways contrary to their intended purposes.

While property rights of the dead, the disabled and/or the incapacitated are frequent targets using wills, trusts and powers of attorneys, guardianships also pose special threats to civil liberties.

The power seated in a guardianship is massive yet one need not have massive wealth to be an appealing target for an abusive guardianship. The pursuit of assets is an obvious motivation for such actions. Wards without assets, however, appear to have “headcount” value as participants to fill the rolls of taxpayer-funded programs.

Though these abuses are often equated with the elderly and incapacitated, make no mistake that people of all ages as well as wealth levels are also at risk.

How do these abuses occur?

Many actions happen quietly with targets either not knowing how or having the resources to fight this wrongdoing. Most of the time, estate disputes are relegated to civil courts creating litigation which is time-consuming and expensive – points never lost on the estate looters. Many cases qualify to be treated as criminal actions though few are.

Manufactured estate disputes are filed daily. Legitimacy, credibility are not required. A relative feeling slighted or some party with an inflated sense of entitlement is all that’s needed. “Frivolous lawsuits” are known for destructive capabilities. Those occurring within probate venues are no exception.

Wrongful diversion (i.e., direct theft) of estate assets can happen via settlement of a lawsuit – or a lawsuit threat – which serves to functionally extort assets from rightful heirs or beneficiaries seeking to cut losses and avoid prolonged litigation. Sometimes estate assets are manipulated or withheld from legitimate heirs or beneficiaries so as to provoke legal action by those parties. The ensuing case then allows a dishonest estate administrator and/or attorney to benefit from the billable hours generated (i.e., indirect theft) in defense of a contrived legal action.

Steal $250,000 from a bank, it’s a crime. The same diverted from an estate relegates harmed parties to the “pay-to-play” civil court system which is expensive and, for many, cost prohibitive. Additional disadvantage comes with dependency on pricey legal practitioners whose welfare depends on good relations with court personnel and opposing counsel more so than with their own clients. Here, all profit except the IRA target. Can Texans (or anyone) protect themselves from probate abuse? discussed many other frustrations experienced by probate abuse targets.

The legal industry purposefully complicates our judicial process to make navigating its channels difficult for non-legal individuals. Wearing down legal targets through prolonged cases as well as maneuvering to exhaust their financial resources are common tactics. Orchestrating serial complications and obstacles helps to maintain a system which – especially in probate matters – can be molded, amended or interpreted on demand to create and justify any desired outcome.

If targeted, how does one respond?

Being targeted in an abusive probate action usually requires hiring a lawyer – a task more easily said than successfully done. As noted earlier, attorneys’ long-term professional viability often depends on good relations within a venue’s legal community, relations not easily maintained if challenging questionable actions on the part of fellow attorneys or local courts.

Lawyers will sometimes take on a case and churn fees (create work to generate billable hours) as the case is taken up to the point at which contentious actions are required, but clients are then dropped and left with legal expenses yet no resolution. IRA targets may have this experience multiple times.

Legal disciplinary channels – for lawyers or judges – are often viewed dimly by those having attempted recourse. In Texas, neither the State Bar of Texas nor the State Commission on Judicial Conduct are seen as effective or credible. Legal consumers wrongly assume attorneys carry professional liability insurance (PLI) when many do not. In fact, the State Bar of Texas Board of Directors voted in January 2010 against a recommendation not mandating lawyers to carry PLI, but merely a transparency measure requiring lawyers’ disclosure of PLI coverage.

Think about that. Many professionals wouldn’t consider operating businesses without PLI insurance. Lawyers, on the other hand, seem without trepidation to operate without such insurance. Guess it’s not a worry when lawyer-on-lawyer legal actions aren’t common and if they happen, the legal industry’s protectionist nature is good at minimizing consequences.

Advocacy organizations related to this issue are largely non-existent. Though a few loosely-formed grassroots groups exist, the deep-pocketed professional organizations people seek to substantively address their problems don’t exist. A few state-based entities are attempting to influence legislation. In 2011 with advocacy from experienced legislative personnel, limited probate reforms were passed in Arizona. In a larger context, however, the probate issue nor its advocates have yet evolved in any state or in any manner as needed to affect real reform.

All politics are local – and probate abuse is no exception

A point routinely missed is the power and influence local politics play in these cases. Specific law firms and judges are known for engaging in questionable actions. Their friends and enemies are identifiable for those familiar with an area’s legal and political landscape. Other legal practitioners are mindful of who to not cross.

Crazy but true. Hiring local attorneys often opens IRA targets to an assortment of exploitative tactics yet hiring outside an area can easily spawn retribution in the courtroom for not funneling funds into the local legal community – even though it’s to the IRA target’s detriment. That’s how twisted an issue this is!

And out-of-area family members are a factor asset looters find appealing when trolling for estates or other probate actions. IRA targets from outside a geographical area being dependent upon assistance from a lawyer pool of which they have no knowledge – especially regarding the local political dynamics – is an automatic disadvantage compounded if physical access (i.e. distance from the venue) prohibits in-person attendance of meetings and proceedings.

So what needs to happen? Will new laws help?

Consumer protections enjoyed in other industries are absent within the legal industry. Passing new laws is no cure-all for probate or any other legal abuse as laws protective of taxpayer interests are ignored on a daily basis. Addressing the overall corrupt culture with meaningful state-based oversight along with local enforcement and accountability is what’s needed.

Again, it’s far easier said than done. And first, people need to understand the playing field and the players.

The legal industry dominates and they have no desire for a systemic change. Estate abuse is lucrative. With our aging population, it’s a growth industry and the trail of lawyers looking for lucrative revenue streams is never ending. Judges are typically former lawyers so understand their shared interest in the status quo – they along with the assortment of peripheral professionals also benefit from asset looting opportunities. Politicians also often come from the same pool – so who is going to champion this cause?

Like most other political issues – and yes, this is a political issue – estate abuse is one more thing people don’t care about – until it happens to them. At that point, an “I need to call my congressman!” reaction kicks in despite many people not even knowing who their congressman is (remember, “politics doesn’t matter to me” as “I’m too busy!). More ironically, they often don’t even understand that issues are specific to federal, state or local governments, that congressional representatives operate at the federal level and that probate issues fall under state purview.

Why anyone thinks government institutions will voluntarily solve a problem they’ve purposefully created and from which they and/or their allies benefit is always perplexing. Restated, government IS a large part of the problem.

Desires to become an activist, to go out and change the world – or at least probate laws – often emerge. Frustration then follows as the band wagon for this issue doesn’t immediately fill to overflowing. It’s a dangerous threat, but so are many other things looming on our political landscape. Engaged citizens know this as also do seasoned activists. Unrestrained, emotion-fueled passion doesn’t translate into effective activism. Attempting to operate under the guise of activism when all that’s sought is resolution for one’s specific case does little to generate support or sympathy.

The bottom line

Probate instruments may have been conceived as a protective measures for the protection of property rights and other civil liberties as in the case of guardianships yet today, their uses to facilitate far darker purposes seem to be growing.

Not a whole lot can be done to help those targeted. No government agency is going to save you, no cavalries are going to ride in. No privately-funded organizations are standing by to spend other peoples’ money solving your problem. If you’ve got the resources, it’s not even easy to find a trustworthy lawyer willing to provide a vigorous defense. It is a grim, grim as hell scenario.

At a point, stars may align coalescing state-based citizen-initiated groups with interest in and understanding of the problem and its sources in a context larger than their own experience. Any such effort would also require significant financial resources along with the political wherewithal (or access to those with such wherewithal) to navigate the formidable, well-funded reform opposition that would quickly organize. Progress on this front will not emanate from Washington D.C. Any success will be based on state legislative activity supporting challenges of corrupt court actions in communities one-by-one throughout any state.

We’re nowhere yet near that point, so between an aging population, trying economic times, growing senses of entitlement and even Obamacare – get ready for more of these cases!

This is no longer about what might happen to your grandmother – it’s about what can happen to you. It’s deplorable to think that your assets are “up for grabs” the moment you are dead or disabled or incapacitated - but it’s a reality in today’s world.