Sometimes, in order to save administrative expenses (including the cost of a surety bond), the probate court might order the conservator of a minor to place the minor's funds in a court-controlled account. The dual purpose: keeping the money safely invested (it is customary to require that the court-controlled account be federally insured by the FDIC) and preventing anyone else -- including the conservator herself -- from gaining access to the account. The court's problem: how can the judge be sure that the conservator will get the money to the bank and the account properly set up.
The Michigan courts have figured out one way: along with the conservatorship papers, issue a directive to the conservator's lawyer. The directive instructs the attorney to physically walk his or her client to the bank, to see to it that the account is properly set up, and to get the bank's signature on a form acknowledging that the the bank understands no one is to get to the money until the court authorizes it.
But what's the court to do when the lawyer simply fails to follow through? That's the problem faced in the recent Michigan case of Matter of Estate of Graves. Attorney William R. Ford simply ignored the court's instruction, and handed two settlement checks to his client. The evidence is mixed about whether he told her what to do with the checks, but the result is clear: she took the checks to the bank, cashed and spent them. (More on the Graves case here)
Months later the probate judge scheduled a hearing to track down the missing money. Mr. Ford showed up at the courthouse and talked to the new replacement conservator. After assuring the conservator that the problem was all his client's fault, and handing her over to the new conservator, Mr. Ford left without even seeing the judge. His client admitted she had cashed the checks and promised to sign a promissory note -- but somehow that note never got signed and the client never reappeared.
A few months later, Mr. Ford was hailed back into court. This time he insisted that he couldn't possibly be responsible, as he had been "dismissed" at the earlier hearing. Not so, said the judge -- and he was held in contempt for failing to follow the court's order that he personally supervise the account setup.
The Michigan Court of Appeals upheld the probate court ruling and ordered Mr. Ford to return the money, but disagreed as to part of the reasoning. Because the "Notice" given to Mr. Ford was not an "Order," said the appellate court, he could not be held in contempt. Instead, the Court of Appeals found that his mistake was to make the settlement checks out in his client's name, without indicating that she was receiving the money in her capacity as conservator. That amounted to him giving the child's money to a completely different person, even though she also happened to be his conservator (and, incidentally, his mother). For that, Mr. Ford was ordered to replace the missing money.
The amount of money in the Graves case is small -- only about $6,000. The problem, however, is widespread. Parents frequently misuse their children's money, whether out of greed, failure to understand or just plain need. Lawyers too often fail to take simple steps to prevent that misuse, even when courts give explicit instructions. Why would Mr. Ford have ignored the judge's directions? Did he fail to read them? Did he consider them too picky? Was he too busy? Did he assume his client would never do anything to hurt her own son, or that she would know what was best for him? We probably will not find out -- but there is a small cautionary message in the Graves story.Robert B. Fleming
Fleming & Curti, PLC