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On or about September 11, 2009, Attorney
Laura R. Schwefel (Schwefel) was appointed
Guardian of the Estate of a woman who had
been adjudicated incompetent (the Ward). At
or about the time she was appointed Guardian
of the Estate, Schwefel was made aware of
the contentious relationship between the
Ward’s two adult daughters, S.S. and P.B.,
who were acting as the co-trustees of their
mother’s revocable living trust.
In 2002, prior to her incapacitation, the
Ward had transferred to her revocable living
trust an apartment complex she owned and in
which she lived. Between the transfer in
2002 and her incapacitation, the Ward had
continued to manage the apartment complex,
contract for services related to the
complex, and collect rents in her own name,
despite the transfer to the trust. At the
time Schwefel was appointed Guardian of the
Ward’s Estate, therefore, the Ward did not
own the apartment complex, but rents were
being collected and bills received in the
name of the Ward.
As of her incapacitation, the Ward was the
sole principal and income beneficiary of the
trust, of which the apartment complex was
the primary asset. The Ward was relying on
the income from the apartment complex for
her maintenance and care, including the
costs of her residence at a nursing facility.
Schwefel initially believed that the Ward
owned the apartment complex, but she learned
no later than October 12, 2009 that the
apartment complex was owned by the trust.
In an October 12, 2009 letter to the Ward’s
daughters, on which she copied their
respective counsel, Schwefel asserted, “As
you know, as the Guardian of the Estate I am
faced with a significant dilemma. Your
mother’s estate is burdened with all of the
bills and maintenance of the apartment
complex...yet, your mother’s estate does not
own this asset. As you know, the asset is
owned by your mother’s trust.”
In an October 18, 2009 letter to the court,
however, Schwefel inaccurately asserted that
the complex was owned by the Ward (as
opposed to other assets Schwefel accurately
stated were owned “in the name of the
trust”).
Schwefel asserted that despite learning on
or about October 12, 2009 that the apartment
complex was owned by the trust, between
October 12, 2009 and December 9, 2009, she
was confused as to the scope of her
authority as Guardian with regard to the
apartment complex and confused as to the
relationship between the trust and the
Estate. Schwefel understood that the
complex was owned “in the name of” the
trust, but Schwefel was confused as to
whether the trust (and trustees) was
responsible for paying the costs and
managing the complex, or whether the Estate
(and she as Guardian) was responsible.
Schwefel asserted that factors contributing
to her confusion included that the Ward was
the sole principal and income beneficiary of
the trust, the apartment complex was the
primary income source for the trust, the
Ward required all of the income available
for her maintenance and support, and the
bills and rental payments related to the
complex continued to be received in the name
of the Ward.
Schwefel also asserted that she perceived
that the contentious relationship between
the Ward’s daughters, their inability to act
in their mother’s best interest, the
condition of the complex, Schwefel’s own
contentious relationship with one of the
daughters, and the Ward’s precarious
financial position necessitated that
Schwefel assume management and control over
the complex, regardless of whether it was
owned by the trust. Between October 12, 2009
and December 9, 2009, Schwefel did not seek
direction from the court as to whether she
had the authority to act with regard to the
complex as Guardian of the Estate or what
action could be taken if the co-trustees
were unable to act.
Evidencing her confusion regarding the scope
of her authority as Guardian of the Estate
and her confusion regarding the legal
distinction between assets held in trust and
those that comprised the Ward’s Estate,
between October 12, 2009 and December 9,
2009, Schwefel sometimes accurately asserted
in communications with the court, interested
parties, tenants, and service providers that
the complex was owned by the trust, and
sometimes Schwefel inaccurately asserted
that the Ward owned the apartment complex.
Schwefel inaccurately communicated to
tenants, interested parties, and service
providers that she was authorized by virtue
of her appointment as Guardian of the Estate
to collect rent and contract for services
related to the apartment complex and to
direct the management and maintenance of the
complex, when in fact she was not so
authorized. Schwefel also inaccurately
asserted to service providers that she was
the only individual authorized to enter into
contracts related to the apartment complex,
when the co-trustees were the legally
authorized persons to do so.
In October 2009, Schwefel advised tenants of
the complex that she had arranged for the
basement area of the apartment complex to
be “cleaned up” and directed tenants to
remove their property from the area. In or
about November 2009, Schwefel hired two of
her nephews to “clean up” the basement area
of the complex and paid them a total of
$2,150 from the Ward’s assets for their
efforts.
On December 10, 2009, Schwefel filed a
petition with the court to remove the Ward’s
daughters as the co-trustees of the trust,
and to appoint Schwefel as successor
trustee. On January 28, 2010, the court
denied Schwefel’s petition, and informed
Schwefel that because the apartment complex
was owned by the Ward’s revocable living
trust, it was not an asset of the Estate.
The court reduced Schwefel’s bill for
serving at Guardian of the Estate by 30% as
a “…conservative estimate of the time spent”
by Schwefel managing the apartment complex
that was not an asset of the Ward’s Estate.
Between January 28, 2010 and April 2010,
despite understanding that the complex was
owned by the Ward’s revocable living trust
and despite being instructed during the
January 28, 2010 hearing that she was not
supposed to be involved with the maintenance
and management of the complex, Schwefel
continued to act with regard to the
apartment complex. Schwefel asserted that
due to the intermingling of responsibilities
between the Estate and the Trust in relation
to the apartment complex, she continued to
have doubts about who should bear the
responsibility for handling, maintaining and
managing the apartment complex, and that the
failure of the Ward’s daughters to act
necessitated that Schwefel continue to act
with regard to the complex. Further,
Schwefel asserted that because the court did
not specifically clarify during the January
28, 2010 hearing that the rental income from
the apartment complex owned by the trust was
also trust property, she continued to
believe that the rental income was Estate
property, despite the complex being owned by
the trust. Schwefel continued to collect
rents and communicate with tenants until the
court ordered her to cease in April 2010.
Schwefel asserts that she did not intend to
violate any Supreme Court Rules by her
representation of the Estate. There is no
evidence that Schwefel acted in a dishonest
or deceitful manner with regard to the
safeguarding of funds she received on behalf
of the Estate or of the Trust.
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By: (i) failing between October 12, 2009 and
December 9, 2012 to clarify the ownership of
the complex and the scope of her authority
to act with regard to the complex as
Guardian of the Ward’s estate, so that she
could accurately communicate with interested
persons and act within the scope of that
authority; (ii) failing during or after the
January 2010 hearing to clarify with the
court whether she was entitled to continue
to collect rents from tenants; and (iii)
failing after the January 2010 hearing to
take the steps necessary to understand that
rental income from an asset owned by the
trust would also constitute trust property,
Schwefel violated SCR 20:1.1, which
states, “A lawyer shall provide competent
representation to a client. Competent
representation requires the legal knowledge,
skill, thoroughness and preparation
reasonably necessary for the
representation.”
After being appointed as Guardian, Schwefel
made a visual inspection of the contents of
the Ward’s apartment. She did not document
or inventory the Ward’s personal property
located in the apartment or create a
property ledger to document the Ward’s
property in the apartment. Despite knowing
that there was a contentious relationship
between the Ward’s daughters, S.S. and P.B.,
Schwefel allowed S.S. to clean out the
Ward’s apartment and to remove or dispose of
some of the Ward’s property without first
creating an inventory or ledger of the
assets comprising the Ward’s Estate.
Schwefel did not supervise S.S.’s removal of
items from the apartment, document what
property S.S. or others with her were taking
or disposing of, or issue receipts for the
property removed. Because of Schwefel’s
failure to make a thorough inventory or
ledger of the Ward’s property prior to
allowing S.S. to access and remove items
from the Ward’s apartment, it was not
possible to document the items removed or
their value so as to create a complete and
accurate accounting of the contents or value
of the Estate. The inventory of assets that
Schwefel later filed with the court included
only some of the items that had been in the
Ward’s apartment at the time Schwefel had
been appointed Guardian of the Estate.
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By failing to: (i) make a thorough inventory
and create an accurate and complete ledger
of the Ward’s personal property prior to
allowing any third party access to the
property; and (ii) document the disposition
of all such property, Schwefel violated SCR
20:1.15(j)(8)(a), which states, “A lawyer
who, as a fiduciary, receives tangible
personal property or securities in bearer
form shall maintain a property ledger that
identifies the property, date of receipt,
owner, and location of the property. The
ledger shall also identify the disposition
of all such fiduciary property received by
the lawyer;” and SCR 20:1.15(j)(8)(c), which
states, “Upon disposition of any tangible
personal property or securities in bearer
form held by the lawyer as a fiduciary, the
lawyer shall obtain a signed receipt, with a
description of the property and the date of
disposition, from the recipient.”
Schwefel has no prior discipline.
In accordance with SCR 22.09(3), Attorney
Schwefel is hereby publicly reprimanded.
Dated this 17th day of June, 2014.
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