New Laws that Affect Arizona Seniors (Arizona Legislative Session 2009)
The Arizona legislature has passed a number of measures affecting seniors, fiduciaries and caregivers. These new laws are scheduled to take effect on January 1, 2010. Here are some highlights:
Elder Abuse
The revised elder abuse statute now says that proof that a person took control, title, use or management of a vulnerable adult's property without adequate consideration to the vulnerable adult may give rise to an inference that the person intended to deprive the vulnerable adult of the property. A. R. S. Section 13-1802(B)
It is possible to rebut this inference by demonstrating adherence to a pattern of gifting or by showing that the Superior Court approved the transaction before it occurred. It is routine for a person to hire an elderlaw attorney to request advance Court approval of such transactions.
According to the new A.R.S. Section 46-456:
A person who is in a position of trust and confidence to a
vulnerable adult (Example: a person operating under a power of attorney) shall use the vulnerable adult's assets solely for the benefit
of the vulnerable adult and not for the benefit of the person who is in the
position of trust and confidence to the vulnerable adult or the person's
relatives unless either of the following applies:
1. the Superior Court gives prior approval of the transaction.
2. the transaction is specifically authorized in a valid durable power of
attorney that is executed by the vulnerable adult as the principal or in a valid
trust instrument that is executed by the vulnerable adult as a settlor.
A person who violates this section may face criminal penalties. But besides the criminal penalties, the Court can order a civil judgment against the perpetrator. The judgment would include damages to compensate, and in addition a penalty in the maximum amount of two times the amount wrongfully taken from the vulnerable adult.
But wait, there's more. Under the old law, the perpetrator would have to lose his right to inherit from the probate assets of the vulnerable adult. Under the revised statute, it is in the judge's discretion whether the perpetrator is disinherited.
But wait, there's even more. Under the new law, not only can the perpetrator be denied probate assets, now he or she can be denied joint tenancy, pay on death, trust and other assets.
Under the old statute, a limited number of people could file
a lawsuit against the perpetrator to cause these civil penalties to happen.
In fact, one way that a perpetrator could possibly block an action for civil
penalties was to become personal representative or conservator of the vulnerable
adult's estate. Under the new statute, any interested person can cause the
action to be brought in Court.
Right to Die
If a petition is filed to challenge the decision of a guardian to permanently withdraw the artificial administration of food and fluid from a patient who is in an irreversible coma or is in a persistent vegetative state that the patient's doctor believes is irreversible or incurable, there is a rebuttable presumption that a patient who does not have a valid living will, power of attorney or other health care directive has directed the patient's health care providers to provide the patient with food and fluid to a degree that is sufficient to sustain life, including, if necessary, through a medically invasive procedure, by way of the gastrointestinal tract or intravenously, and that that provision is in the patient's best interests. A.R.S Section 36-3206.
There is an automatic stay of five days in the withdrawal of food and fluids to allow an appeal from Superior Court, and another automatic stay to allow appeal from the Court of Appeals to the Arizona Supreme Court.
Total Return Unitrust
Some trusts are worded so that upon the death of the person who made the trust, the trust property goes to a death beneficiary, and the trust is ended. Other trusts safeguard the trust property for the benefit of a beneficiary, giving that beneficiary income. When the income beneficiary dies, the trust passes its property to remainder beneficiaries. The trustee then is faced with the dilemma whether to invest the trust assets for income (which would obviously benefit the income beneficiary) or whether to invest for growth (which benefits the remainder beneficiaries).
The legislature is effectively asking people to consider another approach to this problem. It is called a Total Return Unitrust. It may keep a lot of trust beneficiaries out of court. With a Total Return Unitrust, the beneficiary gets a fixed percentage of the value of the trust on a regular basis, usually annually. According to the new statute, "a distribution of the fixed percentage of not less than three per cent nor more than five per cent reasonably apportions the total return of a total return unitrust." A.R.S. Section 14-11015. In this way, the trustee is just required to invest well, and can base his decisions as to what kind of investment based upon investor prudence, rather than upon decisions to favor income beneficiaries or remainder beneficiaries.
Court Licensed Fiduciary
A person whose license as a fiduciary has been suspended or revoked pursuant to section 14-5651 may not serve as a trustee or as an agent under a power of attorney in any capacity unless the person is related to the beneficiary by blood, adoption or marriage. 14-5501; 14-5651 and 36-3223.
