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Guardianship reform bill goes to governor

Legislation to improve New Mexico’s troubled guardianship system through transparency and greater involvement of family members is headed to the desk of Gov. Susana Martinez.

The 60-page bill is designed to prevent abuse and exploitation of thousands of incapacitated people who are under court-ordered guardianship or conservatorship in the state.

The measure, which involved last-minute efforts by both Democratic and Republican lawmakers to address the issue this session, put off more comprehensive reforms, which are to be studied for the next two years.

“Some things have to be above politics,” said state Sen. Daniel Ivey-Soto, D-Albuquerque. “This guardian issue is one of those issues.”

After a unanimous vote of approval by the House late Wednesday, the Senate took up the amended measure for concurrence in the first hour of the last day of the 30-day session. That vote was unanimous. If Martinez approves the bill, changes could go into effect July 1.

Another measure, designed to close loopholes in the law regarding state-certified trust accounts, was also approved by the Legislature.

That bill, proposed by the state Regulation and Licensing Department, came in response to the discovery last year of a $4 million embezzlement scheme of trust accounts, including those of vulnerable or incapacitated people under conservatorship. A top executive of the Desert State Life Management firm of Albuquerque has pleaded guilty to federal fraud and money laundering charges and is awaiting sentencing.

Fueling the campaign for reform was another federal criminal case involving a $4 million embezzlement of client accounts by Ayudando Guardians, whose top executives are accused of siphoning funds from vulnerable clients to finance a lavish lifestyle for themselves and their families.

During the recent legislative debate, the question wasn’t whether guardianship reforms were needed in New Mexico but whether the proposed legislation went far enough and how to foot the bill.

The final product was a scaled-back version of a 260-page guardianship measure originally sponsored by state Sen. James White, R-Albuquerque, who called the current system “dangerous” and “very, very scary” earlier this week.

The bill underwent extensive edits as the members of the state’s judiciary expressed fears that a more comprehensive overhaul of the system was too costly and in need of further study.

The judiciary, represented by state District Judge Shannon Bacon of Albuquerque, said the courts advocated reform but were unprepared for a massive overhaul. Judges noted that because of a lack of funding, there still is no computer database to determine how many pending guardianship cases exist in the state. Estimates range from 5,000 to 7,000, with some cases dating back decades.

White originally proposed that the state adopt a new model guardianship unveiled last fall by a national Uniform Law Commission.

And White insisted that the state commit to implementing the act by 2020 and find ways to prepare for the cost, estimated at from $5 million to $7 million a year for each of the first two years.

But Ivey-Soto, working with the judges, said he was worried about “unintended consequences” and proposed a compromise in the Senate that was modified in the House Judiciary Committee.

“We’re taking care of the most immediate needs with regards to guardianship and recognizing there’s still more work to be done,” Ivey-Soto said after the session ended Thursday. Ivey-Soto said he hopes all the legislators and the courts recognize “the necessity to make sure this isn’t the last stop.”

The final bill asks the courts to study implementation of the Uniform Act over the next two years and report back.

Yet some of the key concepts of the proposed Uniform Code were inserted into the final bill, such as:

• Opening closed, or sequestered, guardianship hearings to the public, unless a judge rules otherwise. Current law mandates closed hearings unless the incapacitated person requests an open hearing.

• Providing more extensive notice to family members about such proceedings. Currently, the list of relatives required to be notified is limited. Advocates say family members, if there are any, can alert judges of problems with guardians and conservators, who handle finances for the incapacitated person.

• Reining in guardians who restrict or ban family members from visiting their incapacitated loved ones. The practice has been criticized as a method by which nefarious guardians perpetrate abuse and exploitation by isolating the incapacitated person.

• Requiring bonds to be posted by non-family conservators who handle finances for an incapacitated person, which can often include the sale of their property. Current law gives judges discretion to require bonds, but judges haven’t.

Up to $1 million in funding has been proposed to implement the reform package.

The funding would pay independent auditors perform spot checks in cases involving conservators. Expanded notification by the courts to relatives will also have a financial impact, judges say, as will the process of identifying the status of the existing caseloads.

Judges by law still have to provide oversight of how the incapacitated person is being treated and how assets are being handled.

“A bigger problem is the entire criminal justice system has been underfunded for years … so everything’s been slowed down,” Rep. Daymon Ely, D-Corrales, told the Journal. “This is what happens when you don’t fund a system properly.”