The Legally Protected Fraud of Guardianship Explained in Detail

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Introduction

  • Currently all district courts who adjudicate adult guardianships have no effective uniform reporting or oversight requirements.
  • Given that guardianship removes all civil rights and estate assets from the proposed ward, due process must be insured. Due process should not be the obligation of family members at family cost, today it is.
  • If a family objects to a guardianship ruling, the appeal process costs the family in excess of $100,000 in litigation fees…and the fight also insures the estate funds are further consumed by the suspect guardian and their predatory attorneys.
  • Guardians are most often immune from criticism, isolation, exploitation or prosecution based on their privileged position with Family/Probate Court. Nearly 100% of private guardians operate above the law today.
  • Adult guardianship statistics should be kept and monitored on a federal basis. How many guardianships are actually awarded, what are the categories of guardianship, the amount of assets under guardianship, and expenses?
  • Transparency on trust assets and expenses. Fraudulent guardianships are one of the easiest ways to gain control of family trust assets.

Uniform Federal Guardianship Oversight

  • Guardianship or conservatorship removes your 14th Amendment protected civil rights as provided by the U.S. Constitution. Local jurisdictions should never have been granted this right without federal oversight.
  • No state and nearly no judicial district can accurately define how many active guardianships they have in place or its trends. No judicial district has an accurate, audited, or defendable accounting of the assets or expenses under guardianship.
  • Local Family/Probate Courts are not resourced or trained to protect the civil rights or estates of the individuals they conscript into guardianship/conservatorship.
  • Experts* estimate 1,500,000 American seniors are under guardianship/conservatorship today, and 150,000 are added to this list each year. Guardianship appointments are projected to double between 2010 and 2030.
  • Experts** estimate $300,000,000,000 in assets are currently under the control of conservators/guardians. Guardians are not credit or background checked, not licensed, not formally trained, and have no formal oversight. The local courts that assign them most often provide guardians with judicial immunity.
  • No federal laws have been enacted, in fact, funding for several state laws have lapsed, since the U.S. Government Accountability Office (GAO) issued its report in September 2010 on Guardianships, Cases of Financial Exploitation, Neglect, and Abuse of Seniors. This report, “identified hundreds of allegations of physical abuse, neglect and financial exploitation by private for hire guardians in 45 states and the District of Columbia between 1990 and 2010.

* AARP 2013 study in conjunction with the National Center for State Courts., Brenda Eckert, PhD and Chief Analyst
** 2014 U.S. Census Bureau Household Net Worth, 2013 U.S. Federal Reserve, and IHS Global Insights Financial Economics. Local courts annually place 150,000 seniors and over $30 billion in assets into the hands of untrained/unmanaged third parties providing no oversight. Guardianship is ripe for fraud.

Hallmarks of a fraudulent guardianship…

  • Physician’s or incapacity certificates signed by suspect healthcare professionals.
  • HIPAA violations by the “professional guardian”.
  • Legitimate estate documents and advanced directives are denied.
  • Leverage or fabricate conflicts between designated estate and advanced directive parties and extended family.
  • Guilty parties defended by court allies or the conflict is conveniently leveraged to justify insertion of a professional guardian.

Hallmarks of guardianship exploitation…

  • Isolation of the victim…control of the body.
  • Defame and denial of legitimate and designated family.
  • Limited or no initial inventory filed with the court.
  • Incomplete or no annual accountings filed with the court.
  • Uncontrolled consumption of the ward’s assets.
  • Up to $250/hour for guardianship fees for any thought or action involving the ward.
  • Up to 7 attorneys assigned at up to $500/hour in fees including arranging and chaperoning family visits.
  • Estate assets are sold with no accounting.
  • Successor trustee(s) denied trust control, if one exists. Trust assets are controlled by the guardian and the guardian’s confidentiality are honored by the court.

The Issue…

  • This is a best guess estimate as local courts are not required to report guardianship orders.
  • Nearly 150,000 new guardianships are estimated to be established in 2016.
  • The U.S. Census Bureau reported in 2014 the average net worth of those 70 + years old is $300,000 and annual income is $24,000.
  • Using AARP’s estimate and the US Census Bureau’s data on net worth, puts $450 billion dollars in estate assets under the control of guardians in 2015.
  • Most states do not require credit or background checks, licensing, or any formal training to be a guardian.
  • By 2050 based on existing legislation and U.S. Census Bureau projections nearly $1 trillion dollars of senior’s assets will be under the control of court appointed guardians.
  • The Government Accountability Office defined this issue in their 2010 report on guardianships to the Senate Special Committee on Aging as requested by then Chairman Senator Herb Kohl of Wisconsin. No new legislation was passed and in fact, all existing legislation lapsed that should have reinforced the GAO study.
  • The problems associated with fraudulent guardianships and guardianship abuse has grown and will grow dramatically over the next 25 years.
  • It is assumed 5% of all guardianships are pursued with the intent to financially exploit. Assuming a life expectancy under guardianship of 4 years, 150,000 senior adult guardianship awards annually, and an average net worth of $300,000 the total annual financial exploitation is $2-8 billion per year.
  • Litigation costs to legitimate family members can double this figure. $4-16 billion per year flowing from the innocent and their estates to those with fraudulent intent all with the support of the judicial system.
  • Guardians and their attorneys relish the privileged position they have with local Courts.
  • All that is required is a negligent…or corrupt…judge to initiate a fraudulent guardianship.
  • Family and Probate Court systems are not designed to manage guardianships. Many Judges are not trained to appropriately manage due process or insure best practices to justify a proper and legal guardianship appointment. Judges are less qualified to audit and manage guardian expenses and best conserve a ward’s assets for their personal benefit.
  • Bar and judicial oversight bodies nationwide embrace maintenance over morality. Most reports of fraudulent or illegal rulings and actions by judges and lawyers are ignored or denied as “judicial discretion”. Judicial immunity provided gives family members no inexpensive recourse to protect a loved one.
  • Guardianship exploitation has become a highly lucrative cottage industry for many allies of Family and Probate Courts nationwide. Federal and law enforcement oversight is likely the only option to control this growing national issue.

Desired Federal Executive Branch Actions:

  • Integrate Senator Amy Klobuchar’s SB1614 into SB3270 “Elder Abuse Prevention and Prosecution Act” introduced by Senator Chuck Grassley-Chairman of the Senate Committee on the Judiciary in July 2016.
  • Recognize fraudulent adult guardianships are a form of human trafficking and provide appropriate federal criminal law enforcement training, investigation and prosecution authority to stop it.
  • Demand protection of the civil rights and the estates of vulnerable adults as defined by the 14th Amendment of the United States Constitution.
  • Require federal licensing of guardians/conservators.
  • Require federal reporting of adult guardianships by district courts and total assets under control.
  • Require accountings of ward assets, expenses and income on a quarterly basis.
  • Require law enforcement investigations and engagement with Family Court judiciary on all criminal accusations by guardianship petitioners. Demand and depend on evidence.
  • Demand transparency of adult guardianship petitions, exhibits, and rulings as provided by the Freedom of Information Act…Florida today seals all adult guardianship court files.

Conclusion:

If both federal and state governments fail to regulate guardianships, the Burdon on taxpayers, families, and the court system will continue to increase. Countless wards of private for hire guardians die as wards of the system even though these seniors had sufficient funds and played by the rules. As a society, will we allow this to continue? The ball is in the system’s court.

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