Thursday, September 17, 2015

How Did Rich Connecticut Morph Into One Of America's Worst Performing Economies? - Forbes

How Did Rich Connecticut Morph Into One Of America's Worst Performing Economies? - Forbes

 Don’t die in Connecticut!

There’s another factor that leads people to think seriously about leaving Connecticut: its probate court system.

Yale Law School professor John H. Langbein said that “When citizens of our state ask me about Connecticut probate, I give this simple advice: Try not to die in Connecticut.  If you are a person of means, you should establish your domicile in some place such as Florida or Maine or Arizona that has a responsible probate system.”  See Langbein’s testimony before the Connecticut Legislature Committee on Program Review & Investigation, October 7, 2005.

Connecticut probate corruption has been going on for a long time, because judges and lawyers aggressively resist attempted reforms.  More than 60 years ago, New York University law professor Thomas Atkinson reported that “Connecticut is just about at the bottom of the list so far as its probate court system is concerned.”

Today, Connecticut probate judges work part-time in one town and often practice law in other towns which can mean obvious conflicts-of-interest.  Probate judge A is reluctant to reject motions enriching lawyer B who comes before him, because lawyer B serves as probate judge B in another town where probate judge A works as lawyer A and makes motions to enrich himself.

To be sure, there is a Connecticut statute –  Chapter 801, Section 45a-25  — that says a probate judge cannot appear as an attorney in another probate judge’s court when a matter is “contested.”  A matter is “contested” if a party objects.  In that situation, a Connecticut probate judge might be able to get around the law by having his law firm partner or associate appear in a another probate judge’s court.

If there’s no objection, because a party or his/her attorney isn’t present — perhaps because there wasn’t proper notice about a hearing — then the law seems to indicate that a probate judge could appear as an attorney in another probate judge’s court.

In 2011, there were some changes in Connecticut law applicable to probate courts, and Judge Paul J. Knierim, Connecticut Probate Court Administrator, claimed that those reforms “addressed all of Langbein’s core concerns.”

Langbein emphatically disagreed: “The worst feature of the probate system, that many of the judges are part-timers who have active law practices, remains.  No set of be-good rules can begin to eradicate structural conflicts-of-interest this system invites.  If you are in law practice, you are looking to build your law practice. That is profoundly inconsistent with the judicial function, where your sole purpose must be to make the right decision under law.”

Connecticut’s probate system has enabled judges to collect fees for essentially looting estates.  According to Langbein, “Filing fees and subsequent charges are far higher than elsewhere.  Probate courts have extended their fees to non-probate transfers such as life insurance and joint tenancy, for which, by definition, no probate services are needed.”

That’s not all.  Connecticut has had something called the Duplicate Trial Rule that, as Langbein pointed out, “allows a litigant who is determined to have a contested probate matter heard by a professional judge to do so, but only after making that person pay for two full trials.”

Langbein insisted that “It’s no answer to say [as Knierim did] that the court fees and the judges’ compensation are set by law.  The problem is that there are still too many probate courts, too many [part-time] judges and too much needless judicial supervision of trusts and estates, driving up costs.”

Langbein warned about the arbitrary power of probate judges to dictate “who owns the property of a decedent, and they can decide whether to strip a citizen of his or her liberty by declaring the citizen incompetent.  It is far from clear that Connecticut probate could withstand constitutional scrutiny under the Due Process clause of the U.S. Constitution.  When liberty and property are at stake, the state has an obligation to operate under procedures commensurate with the seriousness of the affected interests.”

Consider this case exposed by Hartford Courant investigative reporter Rick Green.  The case involved Josephine Smoron, the last of a family of Polish farmers whose 80-acre property is in Southington.  She willed it to Sam Manzo, her long-time caretaker.  The property was estimated to be worth about $1.5 million.

According to the Courant, when Smoron’s health worsened, probate judge Brian Meccariello appointed local lawyer John Nugent as conservator supposedly to protect her interests.  Nugent, who never met Smoron (“I don’t speak dementia,” he was quoted as saying), reportedly made a deal to help a Southington developer gain control of the property.  The developer was identified by the Courant as Carl Verderame.  In May 2009, Meccariello arbitrarily changed Smoron’s will, disinheriting Manzo and setting up a legal maneuver that would transfer the property to Verderame.  Manzo persisted with efforts to uphold Smoron’s original will, and the case went to Superior Court in Hartford.  Rick Green described the judge as struggling to resolve a “circular firing squad of competing interests.”  Manzo finally prevailed this year, but the court nearly pulled off a robbery.

These courts have been reformed?  “As for the scandals involving abuse of the protective jurisdiction for the elderly,” Yale Law’s Langbein remarked, “I am not aware of any major reforms having been taken to prevent such cases in the future.  The power to strip an elderly person of autonomy over his or her property is essential — we cannot leave such persons to harm themselves or be victimized — but that power is inherently dangerous and should not be in the hands of guys who are on the make.”

Despite the 2011 Connecticut probate reforms, there continue to be outrageous cases of guardianship abuse.  Connecticut Probate Advocates has gathered cases from multiple sources.

What should be done about Connecticut’s probate scandals?  Langbein believes “the reform that is needed is to get rid of the probate court system, fold the jurisdiction into the ordinary courts as in other states, and have it served by real judges chosen more on merit.”  Unfortunately, such genuine reform isn’t likely to happen, because as Langbein notes, “The probate gang is a feared interest group in the state legislature, and they largely get what they want.”

Probate issues, though little talked about outside the world of trusts and estates, could spur an acceleration of the exodus from Connecticut as affluent baby boomers retire where they’re less likely to be looted. rated states according to their desirability for retirement.  They ranked Connecticut dead last.

The most fundamental lesson here is simply that investors, entrepreneurs and other productive people want to go where they’re welcome.  They start to think about leaving when they feel exploited.

If enough of these people leave, how can a declining economy possibly turn around?

Editor’s Note:  This article has been updated to contain additional information provided by Yale Law School professor John Langbein .
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