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Court-ordered adult guardianships create risks to finances, freedom

by Legacy Plan
March 5, 2023

Adult guardianship, a legal arrangement intended to protect vulnerable individuals, remains under scrutiny for its potential misuse by corrupt caretakers and the restrictions it imposes on those people, known as wards – an estimated at 1.5 million adults in America.

In many states, the guardianship system suffers from inadequate oversight and regulation that allows unscrupulous or negligent guardians to exploit their wards. The process of appointing guardians and monitoring their actions is often inconsistent, with some guardians receiving little to no training, background checks or ongoing supervision. This lack of oversight creates opportunities for abuse and exploitation.

Unscrupulous guardians have been known to misuse their wards’ assets for personal gain. Contrary to their role as caretaker, they have used the ward’s funds to cover personal expenses by selling their property without consent or making financial decisions that benefit the guardian rather than the ward. Financial exploitation can have devastating consequences for the wards, leaving them without the resources needed for their care and well-being.

Many of these adult guardianship nightmares have been chronicled in highly publicized news accounts. Consider, for example, the case of April Parks, a professional guardian in Nevada. The case brought significant attention to the issue of guardianship abuse and exploitation.

Parks was the owner of a private guardianship company called A Private Professional Guardian LLC and was responsible for managing the affairs of numerous vulnerable adults in Nevada. In 2017, Parks and three of her associates were indicted on over 200 felony charges after an investigation revealed multiple instances of exploitation, neglect and abuse.

Parks was accused of fraudulent billing practices, overcharging her wards for her services and often billing them for unnecessary tasks or double-billing for the same service. In some cases, she continued to charge her wards even after they had passed away. She was alleged to have misused her wards’ assets for personal gain and accused of selling her wards’ personal belongings and property without their knowledge or consent and transferring the proceeds to her own accounts.

Parks was accused of initiating unnecessary adult guardianships for individuals who were capable of managing their own affairs. She would often file emergency petitions for guardianship, claiming that the person was in immediate danger and needed protection, even when there was no evidence to support such claims.

Unfortunately, cruelty was also part of Park’s playbook. She would isolate her wards from their families, preventing them from visiting or communicating with their loved ones. In some cases, she would move her wards to assisted living facilities or nursing homes without notifying their families.

In 2018, Parks pled guilty to multiple felony charges, including exploitation, theft and perjury. She was sentenced to 16 to 40 years in prison. Her case exposed significant flaws in Nevada’s guardianship system and led to legislative reforms aimed at increasing oversight and accountability for professional guardians.

The Parks case is a clear example how guardianship, while intended to protect vulnerable individuals, can pose significant risks and restrictions for older Americans. That’s why it’s important to understand how older Americans typically find themselves in a guardianship scenario, the restrictions imposed, the workings of guardianship abuse and alternative solutions to ensure surrogate decision-making aligns with the individual’s preferences.

How is a guardianship imposed?

Hands in a circle around cut-out

The legal process of imposing a guardianship takes place during a hearing in a probate court or family court.

Typically, a family member, friend, health care provider, social worker or other concerned party petitions the court requesting the appointment of a guardian. The petition must state the reason why the person is seeking guardianship, such as dementia or Alzheimer's disease. Another reason may involve family dynamics. In many cases, family members may be overwhelmed with caregiving responsibilities or may have conflicts that result in seeking guardianship to resolve disputes.

Besides mental or physical conditions that lead to incapacity, here are some of the most common circumstances leading to a court-imposed guardianship.

  • Disagreement among family members. When family members cannot agree on the best course of action for an incapacitated relative or are unable to cooperate in making decisions, a judge may appoint an independent guardian to mitigate conflict and ensure that the ward’s best interests are met.
  • Lack of suitable family members. In some cases, there may not be a family member who is willing, able or suitable to act as a guardian. The judge will then consider appointing an independent guardian to ensure the incapacitated individual receives the necessary care and support.
  • History of abuse or neglect. If a judge believes that family members have been abusive or neglectful toward the incapacitated individual, an independent guardian may be appointed to protect the ward from further harm.
  • Financial exploitation. When there are concerns that a family member may exploit the incapacitated individual’s financial resources, a judge may appoint an independent guardian to manage the ward's finances and safeguard their assets.
  • Conflicts of interest. If a family member has a conflict of interest that may impact their ability to act in the best interest of the incapacitated individual, an independent guardian may be appointed to ensure impartial decision-making.
  • Geographical distance. If family members live far away from the incapacitated individual and are unable to provide consistent care and support, an independent guardian may be appointed to fulfill these responsibilities.
  • Specialized expertise. In some cases, the incapacitated individual may require specialized knowledge or expertise that family members may not possess. An independent guardian with the necessary skills may be appointed to address these specific needs.

Judges are tasked with considering the unique circumstances of each case and determining the most appropriate guardian for the incapacitated individual. The primary goal is to ensure the person's best interests are protected and their well-being is maintained, even if it means appointing an independent guardian who is not a family member.

The court will then schedule a hearing to determine whether guardianship is necessary. The petition typically includes information about the individual's mental and physical condition, financial assets and other relevant information. It may also suggest a suitable candidate to serve as the guardian.

At the hearing, the court will hear testimony from those who filed the petition, the ward and any other witnesses. The court will also consider any medical or psychological evaluations of the ward. After the hearing, the court will make a decision about whether to grant guardianship.

If the petition is approved, a judge appoints a guardian to manage the personal and financial affairs of an individual deemed unable to do so independently, often due to age-related cognitive decline or other health-related issues. Unfortunately, for many older Americans, guardianship can often feel like a complete loss of autonomy and self-determination.

What are the perils of guardianship?

There are several perils associated with guardianship that include the loss of autonomy, invasion of privacy, strained relationships and potential for abuse. Guardianship is an intrusive process in which the guardian, who in many cases is a complete stranger, has the power to make all decisions for the ward, including where they live, what medical care they receive and how their money is spent.

It is a major loss of autonomy can lead the ward to feelings of helplessness and loss of control over their own lives, as they may no longer be able to make choices about their daily routines or living arrangements.

Invasion of privacy is another peril due to the guardian’s detailed examination of the person’s personal and financial affairs, sometimes requiring access to sensitive information such as medical records, bank accounts and other private documents. This invasion of privacy can be distressing and uncomfortable for the individual, who may feel exposed or embarrassed by the scrutiny.

Strained relationships within the family often develop with the appointment of a guardian. Family members may disagree over who should serve as the guardian or challenge the decisions made by the guardian. The individual under adult guardianship may also feel resentment or anger toward their guardian, especially if they believe the guardian is not acting in their best interests.

Another troubling aspect of guardianship is the potential for abuse financial or emotional abuse. The guardian holds considerable power over the older person’s life. An unethical or exploitative guardian may misuse the older person’s funds or make decisions that are not in their best interest, causing harm to the individual and eroding trust in the process.

Another drawback is that guardianship is an inefficient and costly process that can be time-consuming, expensive and emotionally draining for all parties involved. Court proceedings, attorney fees and ongoing reporting requirements can impose a significant burden on the older person’s resources and the guardian's time, leading to additional stress and financial strain. The ward is responsible for paying the guardian's fees, which can be significant. In addition, the ward may have to pay for legal fees and other costs associated with the guardianship process.

Compounding the problem is the reality that guardianship can be difficult to get out of. Once guardianship is established, it can be very difficult to have it overturned. This is especially true if the ward is unable to represent themselves in court.

How can older Americans avoid having a guardian appointed?

One of the most effective ways to avoid guardianship is to create an estate plan and legal documents that establish your wishes and give someone you trust the legal authority to act on your behalf if you become incapacitated. Here are some documents to consider:

Power of attorney. A power of attorney is a legal document that gives someone you trust (called your agent or attorney-in-fact) the authority to make decisions for you if you are unable to do so yourself. There are different types of power of attorney, but the most common is a durable power of attorney, which remains in effect even if you become incapacitated. Powers of attorney can be limited to specific decisions or broad enough to have a surrogate decision maker manage all of your financial, legal and health care matters.

Revocable living trust. A revocable living trust is a legal arrangement in which you appoint and authorize a successor trustee to manage the trust’s assets for your benefit during your lifetime if you become incapacitated and distribute the trust’s assets to your beneficiaries after your death. A trust, which puts you in control of determining your own surrogate decision maker, can be strategically designed to provide for your own care and support if you become incapacitated.

Advance directive. An advance directive is a legal document that specifies the medical treatments you want (or don't want) if you become unable to make decisions for yourself. It can also designate someone to make medical decisions on your behalf. In many states, an advance directive is a combination of a living will, which outlines your preferences for end-of-life care, and a health care power of attorney, which designates someone to make medical decisions for you.

What are some strategies to avoid guardianship?

In addition to creating legal documents, there are other strategies that older Americans can use to avoid guardianship:

  • Communicate with family members. Talk to your family members and loved ones about your wishes and preferences for your care and decision-making. This can help prevent disputes and ensure that your wishes are respected if you become incapacitated.
  • Plan for long-term care. Make plans for long-term care that take into account your financial resources and health care needs. This can help ensure that you receive the care you need while minimizing the risk of guardianship.
  • Stay mentally and physically active. Staying active can help maintain your independence and cognitive function as you age. This can reduce the risk of guardianship by demonstrating that you are able to manage your own affairs.

Conclusion

Guardianship can be a difficult, emotionally draining and potentially abusive process for older Americans and their loved ones. However, there are many legal documents and strategies that can help you avoid a guardianship hearing and maintain control over your own life. By creating a power of attorney, advance directive or trust, and by communicating with your loved ones and planning for long-term care, you can reduce the risk of guardianship and ensure that your wishes are respected. And if guardianship is necessary, remember that there are alternatives, such as conservatorship, supported decision-making, and informal arrangements, that may better suit your needs.

How do I create an estate plan?

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life's contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

This article is published by Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at legacyassuranceplan.com.

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Email - info@legacyassuranceplan.com
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