COA: Guardian can deposit check but not exercise estate planning

Although an adult guardian properly deposited a check after his ward died, the trial court did not err in denying the guardian’s request to exercise estate planning, the Indiana Court of Appeals has ruled.

Longtime friends James Frady and Donnell Roberts opened a joint checking account with the Greenfield Banking Company in May 2017. That August, Frady was appointed guardian over Roberts’ person and estate, with Roberts’ consent.

Then in November, Roberts received a $145,754.33 required minimum distribution check from Merrill Lynch. Roberts gave Frady the check, and the two made plans to deposit it later that week. However, Roberts died a few days later, and Frady deposited the check shortly after his death.

An estate was opened for Roberts in January 2018, with Patrick Hart serving as personal representative. Frady later submitted a final accounting in the guardianship case, but the estate filed several objections to his accounting, including his treatment of the check. According to the estate, the check became an asset of the estate when Roberts died.

Meanwhile, Frady filed two petitions to exercise estate planning powers to change the beneficiary designation on a Merrill Lynch account worth more than $720,000 and to make gifts on behalf of Roberts. The Hancock Superior Court denied both of those motions the next day without a hearing.

Then in July 2020, the trial court ruled that the check had become an asset of the estate at the time of Roberts’ death, meaning Frady was required to deliver it to personal representative. Thus, the trial court sustained the estate’s objection to Frady depositing the check.

Frady appealed, and the Indiana Court of Appeals partially reversed in his favor in In the Matter of the Guardianship of Donnell Lee Roberts, an Adult (now deceased), James Wesley Frady v. Patrick Hart, 20A-GU-1837.

Specifically, the appellate panel found that Frady did, in fact, have authority to deposit the check the same day Roberts died. Judge Margret Robb, writing for a unanimous appellate panel, noted that Roberts had already completed a deposit slip indicating his intent to deposit the check in the joint account.

“Here, the record is clear that Roberts gave Frady the RMD check to be deposited in the Greenfield Bank account with the account number ending in 1415,” Robb wrote Wednesday. “The fact that the account was jointly owned by Roberts and Frady resulting in Frady receiving the money via survivorship is a matter of happenstance, one that does not negate the fact that Frady depositing the RMD check constituted the completion, as guardian, of a task entrusted to him by Roberts, the protected person.

“We conclude that Frady depositing a check as instructed after the death of Roberts falls within the purview of Indiana Code section 29-3-12-1(e)(1)(A),” Robb continued. “Therefore, the trial court erred in sustaining the Estate’s objection regarding the RMD check.”

However, the COA upheld the denial of Frady’s petitions to exercise estate planning, finding the trial court was not required to hold a hearing on those petitions.

“Although there is some evidence Frady would have been Roberts’ intended beneficiary had he made a will, the particular facts of this case do not convince us that a guardian’s powers upon termination should be expanded to include estate planning after the death of the protected person. Further, estate planning is a power granted to guardians only upon authorization of the court and is not a guardianship power Frady possessed prior to Roberts’ death. Ind. Code § 29-3-9-4.5(a). Therefore, upon Roberts’ death and the termination of Frady’s guardianship, exercising estate planning would not constitute an action necessary to ‘complete the performance of the guardian’s trust.’ Ind. Code § 29-3-12-1(e),” Robb wrote for the panel.

“We conclude that the trial court was not required to hold a hearing prior to dismissing Frady’s petition to exercise estate planning because estate planning after the termination of guardianship falls outside the purview of Indiana Code section 29-3-12-1(e). Therefore, the trial court did not err in denying Frady’s petitions to exercise estate planning.”