By Lou Ann Anderson
Grave robbers. Tomb raiders. Cronies who plunder and rape estates. These are characterizations used to describe experiences with the Texas probate system. Guardianships, trusts and wills are vehicles commonly used to perpetrate Involuntary Redistribution of Assets (IRA) actions. Trusts and wills can lead to modern day grave robbing, guardianships can allow looting of an individual’s assets during their lifetime.
It can happen outside a legal venue or with full oversight of the courts. As people get older or incapacitated, the potential for IRA targeting increases. IRA practitioners can be a known, trusted family member or friend or a stranger who works their way into a person’s life gaining their confidence along the way. It can involve lawyers, accountants, “professional” administrators or guardians and others.
People knowledgeable of the Texas probate business tell how making a living off the extraction of estate assets is an organized industry. How tragic to realize a lifetime spent accumulating assets and then clearly designating their final distribution can position one’s rightful heirs as targets for Involuntary Redistribution of Assets practitioners. Incapacitation or death should not signal “open season” on assets. It should not mean that when a person can no longer speak for him/herself, their wishes should be disregarded with the fruits of their labor awarded to parties unconstrained by ethics and adept at manipulating our legal system.
“Proper estate planning” is not an IRA inoculation. Those commissioned to document and execute final wishes sometimes become key figures in asset looting. An estate with limited resources provides no immunity. Wealth is relative. Modest estates can be appealing as IRA practitioners value parties who can be intimidated or convinced the prospect of a legal battle is cost prohibitive.
Prior to the 80th Texas Legislature, the Texas Senate Committee on Jurisprudence held an October 11, 2006, public hearing to solicit testimony regarding potential probate code reforms. The day’s focus was to hear recommendations regarding the jurisdiction of statutory county courts and ways to improve oversight of court-appointed fiduciaries in trust and estate administration cases.
Guy Herman, Texas’ Presiding Statutory Probate Court Judge and Travis County Probate Judge, along with other probate court judges and attorneys testified their system is well functioning, not in need of major reform and characterized litigation losers as predictable sources of unflattering stories regarding probate experiences. The committee also heard hours of citizen testimony telling abuses of power by probate court judges and court-appointed personnel. A common sentiment expressed was how the Texas probate system is a cottage industry that steals from the dead, steals from estates and it happens because the average person fails to realize the money to be made.
During testimony, Russell Verney, former Texas director of Judicial Watch, suggested the legislature convene a special investigative body to look into “not just the four or five that came up today, but the hundreds of cases that would like to tell you about what happened to them.” Judge Mike Wood of Harris County Probate Court No. 2 discussed how “people with money” have recourse including writing books or going to the media while he as a judge cannot do so. In describing an experience with a Montgomery County probate case, Jon Sisco testified that without proper funds for a court battle, “the only thing the working man – the public’s got – is to get it (their case) exposed.” During the hearing, Senator Mario Gallegos, Jr. commented that as the abuses being described were related to court cases, one has to wonder how many similar situations are occurring with estates not involved in litigation.
The Austin American Statesman and The Houston Chronicle are providing increased coverage to Involuntary Redistribution of Assets situations. Several witnesses at the Jurisprudence Committee hearing credited KTRK, Houston’s Channel 13, as instrumental in creating awareness for their cases. The internet also has a mounting presence of IRA victims sharing experiences and strategies. A web site, www.estateofdenial.com, was created by a Texas woman and her teenage daughter in response to both being targeted by IRA practitioners. While their story remains the web site’s inspiration, their blog provides a forum for IRA discussions and promotes awareness to hopefully influence public policy regarding this important property rights issue.
Involuntary Redistribution of Assets cases often stem from a guardianship, trust or will. Appointment of a guardian to oversee an individual’s affairs is a common IRA starting point. Per the National Association to Stop Guardian Abuse, “In seeking to navigate the guardianship system, families too often experience frustrations in attempts to find assistance and to obtain justice in a seemingly unjust legal system. Legislative statutes are totally ineffective when judges and law enforcement agencies ignore them. Government organizations as well as many attorneys are inexperienced in this fairly new area of law. Many lawyers are also unable or unwilling to take on seemingly futile cases in which the client has little or no money to pay fees while the guardian is draining the same family’s assets to pay for their own legal representation.”
Our legal system is “pay to play” with advantage going to those who subsidize the court system. IRA participants can incite a court case, lose and still “win” by collecting attorney and administrative/management fees “legitimately” generated during judicial proceedings. Family members learn it’s often useless to exhaust themselves emotionally and financially while trying to fight a legal system which is supposed to protect the people it’s destroying.
Attorneys tout living trusts as flexible estate planning documents and a means by which to minimize legal fees. If commitment to executing the trust founder’s stated wishes is absent, today’s legal system and moral environment offer opportunity for IRA “gamesmanship.” In this context, estate arrangements, final wishes or asset bequests can undergo a complete redistribution in no way reflective of the founder’s plan.
A trust is generally a private legal instrument receiving no court oversight. Trust “theory” uses language that outlines the trustee’s fiduciary responsibilities to the beneficiaries. Trust management validity is commensurate to the trustee’s integrity and desire for honest interaction. If a trustee is viewed as having breached his/her responsibilities, beneficiaries can initiate a legal proceeding. Again, trustee expenses are paid from the trust, beneficiaries pay their own. The financial and emotional toll can be brutal. Throughout extended legal action, IRA practitioners can also use trust assets to compensate themselves for time spent on efforts arguably contrary to the beneficiaries’ interests.
Estates or trusts of any amount can be attractive to IRA practitioners. As prolonged litigation easily runs into six-figure expenditures for each side, IRA targets often recognize the absence of cost effectiveness in going to court. Much can be spent with little or nothing gained. Involuntary Redistribution of Assets practitioners target and maximize these opportunities.
Death doesn’t necessarily bring closure nor does it ensure honoring a decedent’s wishes. In a December 2006 special report entitled “Breach of Trust,” Austin American-Statesman reporter Tony Plohetski wrote how “Texas estate laws make stealing from the dead a relatively easy crime.” Citing postmortem IRA cases, he described not only the alleged estate theft activities of Austin attorney Terry Erwin Stork, but also detailed how Texas probate laws do little to ensure people’s belongings reach those designated in a decedent’s will. Stork surrendered his law license in May 2007, but it is unknown if heirs of estates handled by Stork will recover any assets left to them.
S.B. 593 was passed during the 80th Texas Legislative session. Per the Texas Senate Research Center, it requires the personal representative of a decedent’s estate, within a certain time period of an order admitting a will to probate, to give notice to each beneficiary named in the will whose identity is known or, through reasonable diligence, can be ascertained, and to file an affidavit with the court listing the beneficiaries notified. The bill also sets out what the notice must contain. Despite this helpful step, IRA practitioners routinely ignore laws and bypass normal business/professional courtesies so any measure of progress remains to be seen.
Estates outlined in the AAS article belonged to people who took proper steps to ensure the orderly distribution of their assets. They fell victim to IRA due to apparent betrayal by a trusted attorney and, when engaged, additional betrayal by the legal system theoretically designed to serve as a safeguard.
Involuntary Redistribution of Assets (IRA), a process in which unscrupulous individuals use death or disability to gain control of assets for “redistribution” in a manner contrary to the property owners’ intentions, can happen during the person’s lifetime or posthumously. As more cases occur and affect people throughout the economic spectrum, “shining light on the dark side of estate management” is an important move toward serious and impactful public dialogue that will hopefully lead to policy changes designed to shut down IRA practitioners and return integrity to the arena of estate management and the probate process.
Lou Ann Anderson is producer of The Lynn Woolley Show, a Texas-based talk radio program. She also is an advocate working to create awareness regarding the Texas probate system and its surrounding culture. Lou Ann may be contacted at firstname.lastname@example.org.