bonds, the procedural path for recov- ery would be much simpler. In such cas- es, where the defalcating executor still had the money or probate assets un- der administration, the litigants and judge could (as discussed below) use proposed Rule 72 to hold the execu- tor in contempt. Even should the exec- utor be found to have spent all of the money, recovery could be had by using the normal collection procedures avail- able in superior court for a judgment, such as trustee process. To supplement these powers, we intend to propose a rule to the Probate Rules Committee that would make it clear that the pro- bate courts have the same types of col- lection tools available to them as those available to courts in the civil division. This rule could be similar to Family Rule 4, which sets forth which Rules of Civ- il Procedure apply to Family Court ac- tions for divorce and legal separation.9
C. Surety Bonds. In addition to the fore- going proposals, we believe that the rules of probate procedure should be amended to provide that a personal bond (unsecured) should only be grant- ed to an executor or administrator once they have proved that they have suffi- cient assets to satisfy a judgment and are otherwise credit-worthy. Under fed- eral law, an individual is entitled to one free credit report a year from each of the major credit reporting agencies. It seems to us anomalous that a credit report is sought by banks that extend a credit card to a college student for amounts up to $1,500, but our probate courts are willing to issue unsecured bonds to individuals handling $500,000 to $600,000, or even millions of dollars, worth of assets without a credit check. We believe
that the probate rules
should reverse the de facto presump- tion in our probate division that unse- cured bonds are the default position. A surety bond should be required un- less the executor can prove credit-wor- thiness, as is now the common practice in New Hampshire. In addition, some states, Colorado for example, require not only a credit report but also a crim- inal background report from the state bureau of investigation before an indi- vidual can be appointed as a fiduciary.
Probate Court Rules Historically, U.S. probate courts have been a convenient forum for the adminis- tration of estates. Essentially, the courts are supposed to exercise a supervisory role over the administration of estates, making sure that the provisions of the will are re- spected, creditors of the decedent are paid, tax compliance rules are respected, and ti-
www.vtbar.org
tle to property is vested in the takers un- der the testamentary arrangement. When simple administration goes awry because of a probate dispute or because assets of the estate have been taken (either before death or post-mortem) by a person not en- titled to them, the probate courts begin to serve a judicial function—hearing motions, taking evidence, reviewing accountings and records of different types, and ultimately is- suing orders. Unfortunately, the probate rules, while adapted to the administrative process, have failed to be modernized to consider the increased complexity of estates, trusts, guardianship, and other forms of litigation that are now (or should be) within the pur- view of the probate court as a court of pri- mary jurisdiction. A particularly striking ex- ample of the mismatch between the current functions of the probate courts and probate rules can be seen when considering the rel- atively recent attribution of jurisdiction to the probate court over express trusts upon the adoption of the Vermont Trust Code. As our article on the Alden decision10
shows,
litigation of the type involved in the Alden case might well be unmanageable in the probate division under its current rules. For example, after extensive discovery and de- positions, the Alden case was decided on cross motions for summary judgment. Un- der current probate rules, discovery may be obtained only after “notice and hearing” (Rule 26), and the practitioner may scan the probate rules in despair of finding a rule al- lowing summary judgment. The Probate Rules Committee has been attempting to update the rules to deal with the increasing number of complex cases in- volving trusts and estates. As mentioned above, in January 2012, the Probate Rules Committee adopted new Rule 72 (setting forth a means for the probate division to handle cases of contempt in the form of refusals to abide by its orders), and the new rule will be forwarded to the Supreme Court for comment and review by the Ver- mont legislature. Similarly, the Probate Rules Committee is attempting to add time limits and other necessary rules regarding motions in probate court. As of this writ- ing, a litigant is left to guess at what the re- sponse time might be for motions, and in- deed left to wonder what types of motions might be accepted. For this reason, at its January 2012 meeting, the Probate Rules Committee began to consider a rule similar to Family Rule 4, setting forth procedures in contested cases. This draft rule is designed to fill-in the gap in the probate rules. Pre- trial and judgment enforcement procedures are lacking in the probate rules as current- ly drafted. This new rule attempts to bring in all of the normal pretrial protective mea- sures available in the superior court civil di- vision, including pre-judgment11
and post- THE VERMONT BAR JOURNAL • SPRING 2012 21
Living Well on Other People’s Money
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