Sometimes the biggest problems in estate planning don’t begin after someone dies. They begin while a loved one is still alive and needs help managing money.

A recent Michigan Court of Appeals case, Hayek v. Kawa, is a good reminder that family members who help with finances must be prepared to explain exactly what happened—and why.

As memory loss or dementia progresses, questions about gifts, joint bank accounts, and financial decisions can quickly turn into expensive legal disputes.

Why This Matters

The case involved a mother who developed dementia and eventually needed a conservator. A conservator is a person appointed by the court to manage the financial affairs of someone who can no longer do so safely.

One of the mother’s children believed that nearly $90,000 had been improperly transferred from her mother’s individual bank account into a joint account shared with her brother.

The brother insisted the money was a gift. He testified that his mother wanted him to have the funds while she was still mentally capable of making that decision.

The probate court wasn’t convinced.

Several witnesses testified that the mother always treated her children equally and would not have made such a large gift to one child without telling the other. There were also questions about how the money was transferred and whether the explanation made sense.

In the end, the court found that the money had been wrongfully taken and ordered the son to return it to the conservatorship. The Michigan Court of Appeals upheld that decision.

One other lesson came from the appeal itself. The son argued that it was too late to bring the claim because too much time had passed. But he waited too long to raise that defense, so the court ruled that he had waived it.

This case shows that facts matter, but credibility often matters just as much. When family members cannot clearly explain financial transactions—or when the paperwork doesn’t match the story—the court may draw very different conclusions.

For families, this is another reminder that informal arrangements can create serious problems later. Adding someone to a bank account, making large transfers, or handling money without clear records can lead to suspicion, damaged relationships, and costly litigation.

Good planning also protects the person providing care. Keeping accurate records, documenting gifts, and using properly prepared powers of attorney can help prevent misunderstandings before they begin.

Simple Lesson

Good intentions are not always enough. Clear records and careful planning help protect both the person receiving help and the family member providing it.

Action Step

If you’re helping a parent manage finances—or expect to in the future—take time to review how bank accounts are titled, make sure the proper legal authorizations are in place, and keep good records of significant financial transactions.

Questions about planning for the future? You can call our office at (517) 548-7400 or connect with us through our website.