SENATE JUDICIARY Exhibit No. / TTnnnZAs. CLARK . HENKEL Attorneys et Latv tsffr No. t+ R -531

March 28,2A17

Senate Judiciary Committee Keith Regier [email protected] Jennifer Fielder Sen. Jennifer.Fielder@mt. gov [email protected] Cydnie "Carlie" Boland sen. carlie.boland@mt. gov Sen.Jen.Gross@mt. gov Steve Hinebauch Sen. [email protected]. gov Jedediah Hinkle Sen.Jedediah.Hinkle@mt. gov Margaret "Margie" MacDonald S en.Margi e. MacDonald@mt. gov Sen. Scott. Sales@mt. eov Nels Srvandal Sen.Nels. Swandal@mt. eov Chas Vincent [email protected]

RE: HB 537

Dear Senators:

HB 537 is scheduled for a Senate hearing on March 29,2AI7 at 9:00 am. Please vote against HB 537.

Montana's probate code, as written, gives a surviving child priority to serve as the personal representative of his or her parent's estate when the parent dies without designating a personal representative. Where the only surviving child or children are minors, the child's surviving parent, as guardian of a minor child, can step in the shoes of the child who otherwise would have priority to serve as the personal representative, but for the fact that the child is a minor.

HB 537 attempts to amend Mont. Code Ann. S 72-2-814, a statute that addresses revocation ofprobate and non-probate transfers by divorce. When a person divorces; 814 revokes any governing instrument that designates a now-former-spouse to receive a property interest, to exercise a power of appointment, or to serve as personal representative of the decedent's estate. The purpose of 814 is to prevent a former spouse from invoking a will, beneficiary designation, or other goveming instrument their deceased former spouse neglected to revoke after their divorce.

Mr. Curdy proposes to add the following to sectionT2-2-814: "(9) The provisions of this section apply to testate and intestate estates, and in the event of a conflict between the provisions

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of this section and those provided in chapters 1 through 5 and chapter l6,part 6, of this title, the provisions of this section shall control." This addition is unnecess ary.72-2-814 already applies to testate estates (persons rvho die with a will) and intestate estates (persons who die without a will) because it applies to any governing instrument. If a person designates his or her spouse as the beneficiary on a life insurance party, or pay on death beneficiary of an account, and then divorces the spouse, 814 revokes the designation even if the person dies rvithout a will.

The real purpose of HB 537 is the second part of the addition: "in the event of a conflict between the provisions of this section and those provided in chapters i through 5 and chapter 16, pafi 6, of this title, the provisions of this section shall control." As Mr. Curdy stated to the House Judiciary Committee, this amendment is meant to address a20I3 case where the Montana Supreme Court held a surviving minor child's guardian or conservator, who also happens to be the former spouse of the decedent, may serve in the child's place as personal representative. Mr. Curdy's proposed amendment deprives Montana children of the ability to elect their surviving parent to serve in their stead as the personal representative of their parent's estate. Mr. Curdy introduced HB 51 5 in 2015 to expressiy prohibit surviving former spouses from serving as personal representatives of the deceased former spouse's estate. That bill did not pass. HB 537 asks you to implicitly prohibit former spouses from serving as personal representative by superceding the entire probate code. This should not pass either.

Mr. Curdy would have you believe that when a minor child nominates his surviving parent to serve as personal representative, the former spouse somehow receives an unintended property interest in the estate. This is simply not true. The personal representative has a fiduciary obligation to serve the interests of the estate, and only has authority to probate the estate. Unlike the beneficiary of a life insurance policy or bank account, the personal representative does not receive any property interest ofthe decedent by virrue ofserving as personal representative. When the surviving parent acts as Personal representative on behalf of his or her minor children, the surviving parent acts for the benefit of the children to pursue claims and distribute property of the estate for the benefit of the children, not for the parent's own benefit. A surviving parent acting in the best interests of his or her minor child is not exercising a property interest.

The proposed legislation ought to be rejected since it effectively seeks to re-write the stafutory hierarchy for a personal representative and elevate the interests of surviving parents of an adult decedent over the interests of that decedent's minor children. If Mr. Curdy's intent is fulfilled, and HB 537 prohibits a surviving parent from serving as personal representative of an estate where the minor child or children are the sole heirs, the minor child's interests are vulnerable and the surviving parent's constitutional rights to parent and ability to serve the best interests of the child are violated. The surviving parent is best suited to pursue claims on behalf of a former spouse's estate when the sole heirs and beneficiaries are the surviving parent's minor children. The heir's surviving parent should be allowed to determine the best interests of the estate, the minor children, and the pursuit of claims on their behalf, not be forced to stand idly by.

A blanket prohibition on a surviving parent to probate the estate of his or her former *""J"?:#i spouse on behalf of their minor children unnecessarily creates a void that in some cases can only be filled by a stranger to the decedent and the heirs. Where the surviving parent is prohibited from serving as PR, the next logical option is the decedent's parent, the minor child's grandparent. If there is no surviving parent of the decedent, priority goes to more distant relatives, then a public administrator, then creditors. The grandparents, distant relatives, public administrator, and creditors of the deceased parent's estate should not control administration of the minor child's parent's estate, and control the ultimate disposition of the'child's inheritance, where the child's surviving parent is ready and r.villing to serve.

The proposed legislation ignores the 's long history of promoting the best interests of children, including children of a deceased parent, and the legislative duties required by the United States and Montana Supreme Courts.

' Montana already seeks to avoid conflict between a surviving parent and grandparents over a minor child by deferring to a fit surviving parent's wishes and limiting or even prohibiting grandparent rights to contact grandchildren (see $40-9-101 et seq.). The proposed legislation contradicts these parental rights and is inconsistent with existing Montana statute and long-standing U.S. Supreme Court and Montana Supreme Court decisions spanning nearly one hundred years of Montana history.

' As U.S. Supreme Court Justice Sandra Day O'Connor wrote in a primary case addressing parental rights in conflict with the rights of non parents to determine the best interests of a child as it effects grandparent rights: ". . . the burden of litigating a domestic relations proceeding can itself be 'so disruptive of the parent-child relationship that the constitutional right of a custodial parent to make certain basic determinations for the child's welfare becomes implicated."' Troxel v. Granville, 530 U.S. 57, 120 S.Ct. 2054,2065,I47 L.Ed,.2d 49 (2000).

' Further, the proposed legislation contradicts and is inconsistent with what Montana Supreme Court Justice Laurie McKinnon set forth in Est. of C.K.O,2013 MT 72,369 Mont. 297 ,297 P.3d 1217 . The proposal to appoint a third party non parent or guardian to ostensibly protect a child's best interests creates conflict between multiple representatives' inconsistent and irreconcilable positions. C.K.O., tf26. Appointing a third party representative for a child over a parent's objection or without a parent's consent is clntrary to u pur"nt's statutory and constitutional rights. C.K.O.,1TtT2 0,24-28.

' The proposed legislation undermines these long-standing, stable, and venerable principles.

If the legislature is going to prioritize the interests of the parents and distant relatives of an adult decedent, a public administrator, and creditors of an estate over the interests of the decedent's own minor children, then the proposed amendment does so. However, if the legislature is going to uphold the children's best interests as paramount, then who better to represent the children's best interests than their surviving parent? The surviving parent of the r'"J"::';3;i

minor is in the best position to pursue claims that ultimatelybenefit the children, and to act on behalf of the minor. Creating a blanket prohibition on that surviving parent's ability to serve, regardless of the circumstances, multiplies proceedings and conflict rather than resolving them. It creates a back door for grandparents and other third parties to circumvent the authority of a surviving parent to pursue claims that ultimately compensate their minor child for the loss of a parent.

Section 814 already prevents a former spouse from reaping the property interests of a decedent spouse. Moreover, a divorced parent already has the ability to appoint a different personal representative over his estate if he or she so chooses. It is natural for a surviving parent to act as the guardian/conservator for their children when no such nomination is made. Changing this natural/default/intestate rule is not necessary, creates conflict, and is unconstitutional. The proposed changes will have shocking consequences that reverberate through parenting rights, estate planning, guardianships and conservatorships, among other areas of law.

The overarching public policy to consider when reviewing this proposed change to Montana's probate code is whether the probate code should prohibit a surviving parent from serving on behalf of minor chiidren. Where the children are the sole heirs of the estate but cannot serve as personal representative solely because they are minors, their surviving parent, as their guardian and conservator, is in the best position to serve on their behalf.

15 other states have enacted the Uniform Probate Code. None of them allow their equivalent to 814 to supercede the remainder of the probate code. I hope you will consider these issues carefully and vote against HB 537 and its amendment to Montana's probate code. please call me if you have any questions.

Cordially,

TERRAZAS CLARK HENKEL, PC