May 3, 2015

Guardianship abuse and how to avoid it

As I advise clients, estate planning is not only about planning for death. It's also about making plans for whatever life can throw at you. Planning for disability is a key element of a good estate plan, allowing you to avoid becoming the subject of a guardianship, with all the accompanying trauma and expense.

Most of us would do well to avoid guardianship. Also known as "living probate," guardianship is intended to be a last resort if an individual is endangering himself or others. But recent media reports paint a grim picture of an elder guardianship system that is not always used as a last resort, and sometimes does more to benefit the guardian than to protect the frail and elderly. Instances have occurred in which someone who is not incapacitated has been declared incapacitated, had a guardian appointed, and lost the right to make his/her decisions regarding where to live, who to socialize with, how to spend money. Perversely, the ward's own assets have been used to feather the nests of for-profit guardians, providing a gravy train for the guardian, attorneys, and a small army of others who are supposed to be looking out for the best interests of the disabled person.

Any competent adult may petition the court to have a guardian appointed for an allegedly incapacitated person. Because petitions are frequently filed on an emergency basis, certain basic safeguards, including a thorough and timely examination of the alleged incapacitated person, may not take place. In a matter of days, an older person may be stripped of the right to control his/her own destiny. Sadly, often it is a family member with questionable intentions who initiates the guardianship proceeding. Or a well-meaning, concerned loved one may contact authorities, inadvertently setting the process in motion. Once an allegedly incapacitated person's rights have been removed, it can be extraordinarily difficult to restore them. 

If you have already selected someone to handle your affairs using a durable power of attorney for property and a power of attorney for health care, and you were competent when you executed those documents, the authority you gave your agent should prevail if you can no longer make your own decisions. However, those documents do not give your agent the right to supercede your own decisions. Thus, if you are making dangerous and harmful decisions, a guardianship may become necessary. However, if that occurs and you have also designated a pre-need guardian in your estate plan, the courts should give preference to the individual you have chosen to act as your guardian.

However guardianship comes about, it should result in the court protecting an incapacitated individual from his/her own bad judgment, and appointing and monitoring someone to ensure the person's safety and economic well-being. Unfortunately, abusive guardianship is a growing problem. The Americans Against Abusive Probate Guardianship, a national non-profit organization founded by retired Aventura physician Sam Sugar, summarizes the problem on its website:  

Anyone at any age can be deemed “incapacitated” –even seemingly healthy independent adults–and become  ” A Ward of the State.” A powerful, unrestrained, well connected and monied group of For Profit  Guardians and the  lawyers that protect them has ignored and subverted the laws designed to protect us all and taken advantage of a non-existent Court monitoring system to wreak terrible harm on Wards and their Families while they enrich themselves with exorbitant fees and abusive tactics. Archaic guardianship laws give these predators total power– including owning another person — over  innocent vulnerable citizens in our society. Instead of helping the frail among us,  they use the power of the law to strip away precious Civil Rights and plunder estates, isolate families who get in the way, and in  the process destroy lives. They use the very laws intended to help people to destroy innocent people and their families. 

Fortunately, just as a strong dam can fend off a flood, a robust legal plan can help protect you from being swept into the guardianship system... or at least ensure that if you ever become incapacitated and are truly in need of a guardian, the person the court appoints will be someone who you have named. Avoiding court-appointed guardianship should be a key element in everyone's estate plan.

Before discussing specific steps you may take to protect yourself from guardianship, let's look briefly at some of the nightmarish cases the media has reported in recent months.

A sampling of horror stories

The Palm Beach Post recently reported on the case of 88-year-old Gwendolyn Batson, a widow who in 2011 named a longtime family friend as her agent under her durable power of attorney. Shortly thereafter, Batson's brother, Kenneth Davis, petitioned the court to have a guardian appointed for Batson. He alleged his sister was suffering from Alzheimer's Disease and was being taken advantage of by her agent/friend. 

Under Florida law, the prospective ward of the state is required to have an attorney appointed for him/her, and to be examined within 5 days by a three-person panel, one of whom must be a physician or a psychiatrist. But this petition was done on an emergency basis, and Batson's examination did not take place. Batson's brother and his wife were appointed her temporary guardians. They then began to liquidate some of her belongings, and moved Batson to Alabama against her will. There were frequent clashes between Davis and Batson's friend/agent. 

Batson's agent fought back. The agent went to court and this time, Batson was examined and found to be of sound mind. In fact, the judge who spoke with her referred to her as "delightful." The guardianship was revoked. Batson returned to Florida and died in 2013.

The Palm Beach Post also reported the case of retired teacher Glenda Martinez-Smith. Shortly after her marriage to Alan Smith, he was in an auto accident and suffered traumatic brain injury. Smith's son then successfully petitioned the court to appoint a guardian for his father. The court appointed a professional guardian who had the marriage annulled, and placed Smith in a nursing home. There, despite Martinez-Smith's pleas, Smith was not provided with the appropriate physical therapy. Meanwhile, the professional guardian was being paid for his services from Smith's assets. At one point the guardian cashed in two of Smith's life insurance policies for a total of $145,000. 

The Post reports that Martinez-Smith spent nearly her entire life savings fighting to reverse the annulment and revoke the guardianship. She has now  been only partially successful. She has been reinstated as Smith's health care surrogate, and has moved Smith, unable to speak and in a dehydrated, partially paralyzed condition, to a different facility in Ft. Lauderdale.  

The Sarasota Herald Tribune devoted an entire series, "The Kindness of Strangers: Inside Elder Guardianship in Florida" to investigating Florida's professional guardianship system. It reports that "Monitoring elders and tapping their assets is a growth business: In 2003, there were 23 registered professional guardians in Florida, according to the (Department of Elder Affairs). Today there are more than 440 - an increase greater than 1,800 percent in 11 years." The paper unearthed several cases of elder guardianship abuse. Here's one:

Florida resident Marie Winkelman was approached in 2009 by her late husband's son-in-law, Robert Szychowski. At his request, she made him her power of attorney, an action she would come to regret. Szychowski lived in New Jersey and Winkelman did not know him well, but trusted him because "This was my husband's family... and anybody who was close to him, I respect them." A longtime friend of Winkelman's claimed she had been hospitalized just before signing the papers. That longtime friend believes he is the "boyfriend" Szychowski alleged was advising Winkelman to avoid taking necessary medications when Szychowski petitioned the court to declare Winkelman a ward of the state.

The petition was granted in 2013 and Winkelman became a ward of the state. Now, the report continues, "Strangers control her life savings, her worldly possessions and her medical care. The court has ordered a trust company to cut checks from her account for some $635,000 to pay attorneys, guardians and others involved in her case, with many more expenses pending....A professional guardian receives more than $1,000 a month, at $85 an hour, to coordinate Winkelman’s doctors’ appointments, help with financial transactions and communicate with her cousin and a family friend — who both sought unsuccessfully to free her from a legal status she finds expensive and intrusive."

Winkelman is sometimes forgetful, but far from incapacitated. "They know that I don’t need any of their help," she says. "Not that I am so smart — but I can handle certain things.”
The system does work, but there are too many bad apples

These reports reveal that the adult guardianship system in Florida can be manipulated by bad actors. That said, is also obvious that not all court-appointed for-profit guardians are the "cockroaches" Florida Senator Nancy Detert famously termed them. Even the founder of Americans Against Abusive Probate Guardianship concedes that “...there are some wonderful guardians; there really are. God bless them. But there are a significant number of predatory guardians who work with predatory attorneys.” Attorney Gerald Hemness, author of a manual for guardians, agrees that the vast majority of professional guardians do the right thing. “They work selflessly, and they don’t get paid on a massive number of cases,” he contends. “But that does not suggest there aren’t inexperienced, poorly trained, incompetent guardians out there. Unfortunately, the ones that are better prepared and have more training struggle on an every-case basis to be paid for the work they do." But, he adds, "The vast majority of the people under guardianship need to be there.”

Reforms needed: One bill now headed to the governor's desk, another just died in the Florida House

In response to the growing incidence of elder guardianship abuse, the Florida legislature this year considered several reforms to the system. Florida House Bill 5 cleared the legislature on April 28 and is now on Governor Scott's desk. It allows for mediation when there is a dispute over guardianship, which will save on attorney's fees that would otherwise drain the ward's assets; makes it easier for the ward's rights to be restored and guardianship removed; and clarifies who may serve as a guardian and how guardians may be paid.  Unfortunately, because the House session ended early, Senate Bill 1226 never made it out of the legislature. That bill would have established even greater oversight of guardianship procedures, creating an Office of Public and Professional Guardians to investigate and take disciplinary action in cases of abuse, and establishing a registry of professional guardians in each judicial circuit. That bill will likely be re-introduced in the next legislative session.

Steps you can take to prevent yourself from becoming the subject of a court-ordered guardianship

Now that you fully understand the potential perils court-ordered guardianship presents to you and your family, let's discuss how to prevent this from happening to you. As I noted above, incapacity planning is a critical element of good planning. 

Contrary to common belief, having a will provides absolutely no protection from guardianship. A will merely directs the disposition of your assets after you pass away. It affects nothing while you are alive.

The attorneys of The Karp Law Firm recommend the following steps to protect yourself:
  • Consider establishing a revocable trust. It must be properly drafted and funded, of course. A trust is useful because guardians cannot get access to your non-trust assets; those are beyond the jurisdiction of the court, thus providing you protection from a potentially greedy guardian. 
  • Establish a durable power of attorney for property. If you become incapacitated, this document allows your designated agent(s) to seamlessly step into your shoes and manage your financial affairs. Be sure to name back-up agents in case your first choice cannot serve. Review your durable power of attorney every so often since laws can change. Also, be sure those you have named as agents and still ready and willing to serve. As I have mentioned before in this blog, it's also wise to provide your financial institutions with a copy of your durable power of attorney after you execute it, and before any emergency arises. Ask the financial institutions to either sign off on it so you know it will be honored, or to tell you what modifications are required. Banks and other financial institutions are notoriously picky about honoring these instruments, even when the document conforms to all state requirements. So you want to be sure you have all your ducks in a row in advance, rather than have your agent find out in the future that the document won't be accepted.
  • Establish a power of attorney for health care. Make sure the person you are considering naming as your decision-maker wishes to serve. Appoint back-up agents. Provide your health care providers with copies of the document and check from time to time to ensure that your designated agents are still willing and able to serve. (I have had people consult with me whose health care power of attorney is decades old and name agents who are either deceased or too debilitated to serve!) An outdated document is a worthless document, and does nothing to protect you from guardianship.
  • Name a pre-need guardian.  You may incorporate this into your durable power of attorney and power of attorney for health care, or it may be a separate document. It allows you to tell the court who you wish to serve as your guardian if circumstances ever arise that you need one. A pre-need guardianship designation gives you some measure of control if you do end up in a guardianship, allowing someone you know and trust to serve as your guardian, instead of a stranger appointed by the court.
  • Use a Florida Bar Certified Elder Law Attorney to help you with your planning. This ensures that your documents are properly drafted, and should hold up if there is ever a legal challenge. Your attorney can be your most effective witness if someone alleges that you lacked capacity or were under undue influence when you executed your documents. All our firm's attorneys are very particular about how we handle our interviews with clients, and who we will allow in the room during our discussions. We do this to protect our client against allegations of undue influence. Rather than being retained as the lawyers to fight against a guardianship, or to fight against the appointment of a guardian not of your choosing, we can be material witnesses on your behalf who, with our years of experience, can support the claim that you were competent to select and designate a pre-need guardian, power of attorney for health care, and power of attorney for property. We can also testify that we met with you alone and were able to determine that you were not under the influence of any individual at the time you made your choices. 

If you wish to sign a petition urging a federal investigation into abusive elder guardianship, click here.

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