2016 Developments in Connecticut Estate and Probate Law, 061818 KYWC, 91 CBJ 3
| Position | Claim 91 CBJ 3 |
By Jeffrey A. Cooper,[*] John R. Ivimey,[**] and Katherine E. Coleman[***]
This Article provides a summary of recent developments affecting Connecticut estate planning and probate practice. Part I discusses 2016 legislative developments. Part II surveys selected 2016 case law relevant to the field.
I. Legislation1
A. Probate Court Operations2
Public Act 16-7 makes numerous modifications and technical corrections to statutes governing probate court operations. Included among these changes, the Act does the following:
1. Creates a process for a court lacking jurisdiction over a petition, application or motion to transfer that matter (without the imposition of an additional filing fee) to another probate court that does have jurisdiction.3
2. Expands the list of probate matters requiring a $225 filing fee to include petitions relating to the following: (i) placement of a child for adoption outside the state; (ii) examination of a cooperative post adoption agreement; (iii) contact between an adopted child and his or her biological siblings; (iv) termination of voluntary services provided by the Department of Children and Families; (v) custodianship under the Uniform Transfers to Minors Act; (vi) whether a person under a conservatorship is capable of giving informed consent for voluntary admission to a psychiatric facility; (vii) whether a person under a conservatorship or guardianship is competent to vote; (viii) request of the Commissioner of Social Services to enter an elderly person's premises to evaluate the need for protective services; and (ix) excusing a periodic or final account of a conservator or the final account of a trustee.[4]
3. Provides that a petition to remove a parent as guardian or terminate parental rights may be filed in the district in which the child resides, is domiciled or is currently located.5 Prior law only permitted filing in the court where the child resided.
4. Expands the types of entities that may act as conservator to include limited liability companies and partnerships in addition to corporations.6
B. Revisions to the Connecticut Uniform Power of Attorney Act7
As summarized in last year's article, Public Act 15-240, The Connecticut Uniform Power of Attorney Act, made significant changes to Connecticut law and established a new statutory power of attorney.8 Public Act 16-40 act made some relatively minor changes to this Uniform Power of Attorney Act, postponed its effective date from July 1, 2016 to October 1, 2016, and created a new statutory "short form" for creating a power of attorney.[9]
Like the prior "long form," the new short form lists powers that a principal can grant an agent and requires the principal to strike out and initial any power(s) that the principal does not wish to grant to the agent.[10] Unlike the long form, the short form does not contain optional provisions that can be used to authorize additional powers, such as managing inter vivos trusts, gifts, rights of survivorship, and beneficiary designations, authorizing another person to exercise authority under the POA, waiving the right to be a beneficiary of a joint and survivor annuity, exercising fiduciary powers, and disclaiming or refusing an interest in property.11
C. The Sale of Privately Held Alcoholic Liquor for Auction12
Public Act 16-56 creates a mechanism for decedent's estates to transfer alcoholic liquor, such as wine, beer or spirits, without complying with the requirements of the Liquor Control Act.13 Specifically, an estate's fiduciary may sell or transfer alcoholic liquor without a liquor permit if the purpose of the sale or transfer is to have a licensed auctioneer auction off the alcoholic liquor and both the probate court and the Commissioner of Consumer Protection, or his designee, have approved the transaction in writing.14
D. Probate Fee Lien15
Public Act 16-65 clarifies that the probate fee lien[16]applies only to estates of those dying on or after January 1, 2015, and exempts a "bona fide purchaser" and "qualified encumbrancer" from that lien.17 This is a very narrow exception, however, insofar as it defines a "bona fide purchaser" as one who purchases property in good faith and without actual, implied or constructive notice that the seller died owning the property or had transferred the property to the trustee of an intervivos trust who owned the property when the transferor died.18 Similarly, a "qualified encumbrancer" is one who places a burden, charge or lien on property without actual, implied or constructive notice of the seller's death or transfer to an intervivos trust as described above.19 As a practical matter, these exceptions will rarely apply since notices filed on the land records and other circumstances surrounding the transaction typically will provide constructive or inquiry notice of the property owner's death.
E. Fiduciary Access to Digital Assets[20]
Public Act 16-145 authorizes specified fiduciaries (executors or administrators of estates, conservators of the person, agents under powers of attorney, and trustees) to take control of a represented person's digital assets, including emails, social media accounts, digital files, and virtual currency.21 In order to exercise this authority, a fiduciary must send a written request to the asset's custodian together with a certified copy of the document appointing the fiduciary.22The fiduciary also must provide certain other information the custodian requests, such as account verification.23Upon receipt of the required materials, a custodian of a digital asset must generally comply within 60 days.24
The above provisions do not apply where they would be contrary to the established intent of the user of the digital asset and the act creates a method for determining this intent.25 First, if the custodian of a digital asset had an online tool allowing an account user to authorize or prohibit access to digital assets to a fiduciary, that online direction governs.[26] Second, if the custodian did not provide an online tool, or if the user does not use the one provided, then the user may allow or prohibit disclosure to a fiduciary in a will, trust, power of attorney, or other record.27 In the absence of either such direction, the general provisions of the Act apply.28
The Act does not apply to an employer's digital assets used by employees in the ordinary course of business.[29]
F. Expanded Disinheriting of Persons Convicted of Crimes30
Public Act 16-168 extends the scope of Connecticut's existing "slayer statute," which prohibits persons found guilty of certain crimes from inheriting or receiving part of the victim's estate. The statute now covers persons found not guilty of such crimes by reason of mental disease or defect, as well as to those convicted of second degree manslaughter and second degree manslaughter with a firearm.31 The prior law applied to the following crimes: murder, murder with special circumstances, felony murder, arson murder, first degree manslaughter, first or second degree larceny, and first degree abuse of an elderly, blind or disabled person or person with intellectual disability.32Prior law further permitted someone convicted of first or second degree larceny or first degree abuse to petition the court to override these prohibitions.33 The new Act extends this petitioning ability to defendants found not guilty by reason of mental disease or defect.34 The court may grant the petition if it would fulfill the deceased victim's intent or avoid a grossly inequitable outcome under the circumstances.35
G. Validity of Conveyances to Trust Rather than a Trustee36
Public Act 16-194 in part eliminates a trap for the unwary by validating a conveyances of real estate made to a trust itself rather than to a trustee.37 Also, the Act provides that a conveyance by the trust which is signed by a duly authorized trustee will be treated as if it had been made by the trustee.38
H. Probate Fees Capped at $40,00039
Public Act 16-3 establishes a $40,000 maximum probate fee for the settlement of an estate.40 As a practical matter, this maximum fee will apply to estates valued at or above $8,877 million.41 Under the prior law, an estate of this size would have paid the same probate fee but even larger estates would have paid an incremental fee at a 0.5% marginal rate, with no cap.42
II. Case Law
A. Conservatorships and Guardianships
1. Qualifications of Conservator
In DeNunzio v. DeNunzio,43 the Supreme Court clarified the effect of the major 2007 revision of Connecticut's conservatorship statutes and made clear that the probate court must rigorously follow applicable statutes in appointing and selecting a conservator.
The named parties in the case were a mother and father who had each petitioned to be appointed conservator of their adult child.44 The superior court appointed the father as conservator, finding in part that his appointment was in the "best interests" of the son.45 The mother appealed this appointment all the way to the Supreme Court, contending in part that the probate court had wrongly considered the child's "best interests" in selecting the conservator rather than rigorously applying the statutory requirements set out in General Statutes Section 45a-650(h).[46]
The Supreme Court agreed that P.A. 07-116 (codified at General Statutes Section 45a-650(h)) completely supplanted the prior "best interests" standard for evaluating a proposed conservator and replaced it with five specific factors a court must consider.47 Observing that "the legislature deleted every reference to "best interests' in § 45a-650," the Court concluded that "legislature intended...
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