The Nebraska Supreme Court prevents a conservator from amending a revocable trust that was created prior to the settlor's incompetency. In re Guardianship & Conservatorship of Garcia, Neb. Sup. Ct., No. S-00-893, 262 Neb. 205, July 13, 2001
On July 8, 1997, Ida Garcia executed the fourth restatement of a revocable trust that provided monetary bequests to several relatives, including Simon and Betty Garcia. An Omaha bank is the trustee. On December 31, 1998, Ms. Garcia was determined to be mentally incompetent and her nephew, Arthur Gonzales, was appointed her guardian and later her conservator. On April 12, 2000, Mr. Gonzales requested authority to exercise Ms. Garcia's rights to amend the trust. Stating that these were Ms. Garcia's wishes as well, Mr. Gonzales said he wanted to move the trust to a bank in Scottsbluff, Nebraska, and to remove Simon and Betty Garcia from the trust.
On April 27, 2000, a guardian ad litem reported that Ms. Garcia continued to be unable to manage her own financial affairs. On June 20, 2000, the county court granted Mr. Gonzales' petition, and Simon and Betty Garcia appealed. They argued that the relevant state statute (Neb. Rev. Stat. § 30-2637(3)) does not allow a conservator to change the provisions of a validly executed trust agreement. They also asserted that the trust was established when Ms. Garcia was able to make decisions, which is not the case now.
The Nebraska Supreme Court agrees with Simon and Betty Garcia, ruling that '[b]efore a conservator may exercise any power permitted by the statute, the court must determine by clear and convincing evidence that such actions are in the best interests of the protected person.' In this case, the court finds insufficient evidence to support the county court's order. 'Garcia's alleged wishes to amend the Trust Agreement, stated only to Gonzales,' the court writes, 'are not sufficient because the guardian ad litem's report showed that Garcia was incompetent.'
For the full-text of this decision, go to https://court.nol.org/opinions/2001/july/july13/s00-893.htm
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