Who guards the guardians? Estate planning questioned in hearing

Copyright © 2017 Albuquerque Journal

SANTA FE – It’s been a nagging question during the months of debate over reforming New Mexico’s guardianship system:

How to ensure that estate plans and trust directives are honored if you or your loved one become incapacitated and are placed under a court-ordered guardianship?

That question from state Sen. Nancy Rodriguez, D-Santa Fe, came during the rollout of some 18 proposed guardianship reforms to the health and human services committee of the state Legislature on Friday. The proposals are the product of six months of study by a state Supreme Court appointed commission.

For Rodriguez, the issue of planning for the care of an incapacitated loved one hit close to home.

“Conservators and guardians seem to have quite a bit of authority, in fact, all the authority to take over someone’s finances, their accounts that were going to belong to that person,” she said. “Does that mean a conservator or a guardian also has the authority if a trust is in place for that individual, that (the conservator has) access to the trust? That, too?”

Guardianship commission chairwoman Wendy York responded that under New Mexico’s current system that could happen.

“One of the issues that we heard repeatedly from members of the public was that very issue,” York added. “When a person had an estate plan in place or a trust in place that a conservator could determine that that money should go in a different direction for care of that person.”

Rodriguez explained her worries as the mother of a special needs daughter.

“My daughter now lives in heaven. She had an illness a few years ago. One of the things that crossed my mind all the time was, ‘Oh, my gosh, I hope God keeps me here long enough. I don’t want her to be alone, because she couldn’t take care of herself.’

“I was prepared then to do a trust, specifically for her, thinking back then there would be no way that anyone would have a chance … to possibly make any changes to that trust. I wanted the most secure way to know that our daughter would have enough money for medical needs or whatever it may be.”

“What happens to parents who put a trust in place? To me there should be a document that’s solid stone, that doesn’t get changed,” Rodriguez said.

York, a retired state district judge from Albuquerque, said judges in guardianship cases are confronted with so many different scenarios,”it’s difficult to say there should never be a situation in which a trust would not need to be invaded for the protected person.”

But under a commission proposal, she added, judges in New Mexico would have to make specific findings of fact if they deviate from a protected person’s advance directive, trust, will or estate plan.

“So that the judge goes through the exercise of saying, ‘OK, why am I doing this when the protected person has put another plan in place?” York said.

State Sen. Jerry Ortiz y Pino, D-Albuquerque, a guardianship commission member, added, “What this does is, it reinforces the notion that the trust takes precedence, unless …. And we don’t have that in law now. Right now the conservator has a great deal of latitude in convincing the court into overturning the trust.”

Rodriguez echoed others on the committee who voiced support for the reforms, which so far don’t have a projected price tag.

“If it was up to me, I would get every one of these (recommendations) into statute,” Rodriguez said, “because we cannot see this happening anymore. Not to one person, at all, anywhere. I think we need to prioritize our funds at the state level. Do what’s right here.”

The legislative hearing, in which no vote was taken, touched upon the lessons learned from the downfall of a leading New Mexico guardianship firm, Ayudando Guardians, whose two top executives are facing federal charges of embezzling more than $4 million of clients’ money. Its clientele included military veterans and special needs or developmentally disabled people. Another Albuquerque firm, Desert State Life Management, is alleged to have diverted millions of dollars set aside in trusts for special needs and elderly clients, but no criminal charges have been filed.

Even with “meager” funding next fiscal year, the state’s budget priorities need to be adjusted, Rodriguez said. “This is something that we cannot let continue to happen.”

State Rep. Christine Trujillo, D-Albuquerque, said the Legislature needs to act now.

“There’s no other option for us except to move forward. If we continue to allow this without any oversight and accountability … then we just continue to perpetuate the problem. It should be our political will to make sure this gets done.”

State Rep. Joanne Ferrary, D-Las Cruces, said district judges she has spoken with stressed the importance of conducting audits. “Without admitting anything, I think they (the judges) were aware of the problems,” Ferrary said.

Guardianship companies file annual reports with the courts. But the commission is proposing the legislature fund investigators or auditors who would review such reports and alert the judge in the case about “red flags.”

Ortiz y Pino, a longtime advocate of reform, said the state hasn’t provided adequate resources for oversight of guardianship cases.

Legislative action is needed because the system is “no longer trusted” in New Mexico, he said.

“It operates under a shadow of suspicion … that we may not be doing the best for our loved ones,” Ortiz y Pino said. “We need to restore a level of confidence in the guardianship/conservatorship system in the state. To do that, we need more adequate financing.”

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