Dave Demming says the rise in the number of court-appointed guardianships among elderly clients is a troubling trend that he has seen in his 37-year career as a financial advisor.
“We have to submit documentation that supports the funding request then wait for the guardian’s decision to approve disbursement of funds from the estate,” said Demming, who manages some $350 million in assets near Cleveland. “Any time a funding request is submitted, legal fees are assessed, which eventually drains my client's estate.”
Demming’s issue involves the resource-draining bureaucracy surrounding clients, but it is a small piece of a larger problem of abuse that led to the formation of the Americans Against Abusive Probate Guardianships (AAAPG) in 2013.
Sam Sugar launched the South Florida-based advocacy agency due to the growing numbers of family members complaining about professional guardians and probate courts having undue control over their disabled and elderly loved ones.
"Professional guardianship is a cottage industry emerging nationwide that is becoming more organized and powerful as lawyers and probate judges realize what a gold mine it is to take over the lives and assets of elderly Americans to the detriment of their heirs," Sugar said.
Once a court-appointed guardianship is established, the elderly person's finances are under the complete control of the appointed-guardian who may or may not be a loving family member.
Court-appointed guardianship over the elderly is on the rise.
Some 37 percent of judges, court managers and clerks who esponded to a Center for Elders and the Courts survey revealed that guardianship filings have increased over the last three years and 43 percent noted an increase in caseloads.
In response to growing concerns expressed by family members, Nevada Attorney General’s Office created a joint guardianship and elder exploitation task force and is now dedicating an employee to investigate the cases in which legal guardians allegedly swindled the disabled and elderly wards of the state.
One way to avoid the bureaucracy of the government in the form of the courts is for parents and spouses to spell out their wishes in a trust, power of attorney or will but even this foresight is not foolproof.
“This level of planning can be very useful in preventing or delaying guardianships, however, this will not work if the person or relative you have designated to serve as power of attorney or trustee end up abusing their authority,” said Don Ford, an attorney who was appointed by the Chief Justice of the Supreme Court of Texas to sit on the Judicial Branch Certification Commission, which sets policy and adjudicates complaints against guardians.
Among families where the patriarch or matriarch was born prior to 1946 there can be a substantial retirement nest egg at stake. In fact, boomers and Gen X-ers are expected to receive some $41 trillion from their World War II generation parents as they pass away.
“Guardianship attorneys appointed by courts are stealing billions from vulnerable elders sometimes on their own and other times working with unscrupulous family members,” said Jack Halpern, CEO of My Elder Advocate, a national franchise that works with families to solve elder care-related issues. “This has happened to a number of my clients.”
State courts have appointed guardians to oversee the finances, health care and other needs of older adults who are unable to handle their own affairs but several reports note a rising number of allegations of financial exploitation, physical abuse and medical neglect by guardians.
“It's just another indication of how this racket has infiltrated and corrupted our most sacred judicial process and turned it into a cash cow for the stakeholders in this predatory legal system, which threatens every single older adult in America,” Sugar said.
According to a survey in 2014 by the federal agency Administrative Conference of the United States, 60 percent of court personnel said they did not review credit or financial reports on prospective guardians.
“In the instances where the judge and court-appointed guardian are conspiring financially, the care of my client does not tend to end well,” Demming said.
An earlier federal study by the Government Accountability Office (GAO) identified hundreds of allegations of physical abuse, neglect and financial exploitation by guardians in 45 states and the District of Columbia between 1990 and 2010.
In 20 cases, the GAO found that guardians stole or improperly obtained $5.4 million in assets from 158 incapacitated victims.
Ford, the Texas attorney who adjudicates complaints against guardians, said families can avoid guardianship issues with proper planning.
“The best way to prevent a guardianship,” Ford said, “is to have the family of the incapacitated person enter into some sort of agreement as to how things will be handled.”
Juliette Fairley is a business and finance journalist who has written four personal finance books for John Wiley & Sons and has written for major news organizations, such as The New York Times and The Wall Street Journal. She is a member of the American Society of Journalists and the New York Financial Writers Association and a graduate of Columbia University's Graduate School of Journalism. Juliette can be reached at [email protected]
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