APPROACHING ZERO TOLERANCE
October 2, 2012 § 6 Comments
If you have gotten the impression that many chancellors are tightening down on the handling of fiduciary matters, it’s not just your imagination or overactive paranoia glands. More and more chancellors across the state are approaching zero tolerance for sloppy handling of estates, guardianships and conservatorships.
There are several reasons for this. One, and perhaps paramount, is that it is the judge’s job. But here are several others:
- There is the case of attorney Michael J. Brown, of Hinds County, who helped fritter away hundreds of thousands of dollars of a ward’s account.
- There is the case of the lawyer in jail in Rankin County who has been unable to account for fiduciary funds, and who will begin serving federal and state sentences therefor as soon as Judge Grant releases him from his civil contempt sentence — which is contingent on his accounting.
- There is the case of another lawyer in Rankin County who refuses to account for fiduciary funds, and who is likewise cooling his heels in the county bastille until he complies.
- There is the case of the lawyer on the coast who committed suicide when the questions started floating about how fiduciary matters in his charge were handled, and the last I heard the missing funds are more than $1.2 million.
The genius of our fiduciary system in Mississippi is that it creates a three-tiered system of protection for the ward or beneficiaries. The fiduciary is bonded (in most cases) and is accountable to the court; the lawyer works with the fiduciary, providing advice, guidance and oversight to see that the law is followed; and the court authorizes actions, demands and approves accounts and inventories, and scrutinizes the actions of both the fiduciary and the ward. Whenever any one tier fails, it is up to the other two to catch and fix the failed part. When judges wink at incompetent legal work in fiduciary matters we are shirking our duty to innocent beneficiaries, creditors and people who are unable to protect their own interests.
It’s not the stuff of movies and detective novels that money is stolen from fiduciary accounts. I have seen it right here in our little backwater, and I am sure it is happening and has happened in yours (not meaning that you live in a backwater).
Fraud and mishandling of funds thrive in the sloppy handling of fiduciary matters. When you leave it up to the fiduciary to go about unaccounted for and unadvised and unsupervised, you are inviting trouble. And chancellors are becoming ever more vigilant and intolerant.