WHITE HOUSE -3
The “conserve” directive of guardianship law is all but totally ignored in a growing number of courts across the country. Judges, the ultimate decision makers and protectors of wards of the state, fail to monitor their appointed fiduciaries and guardian cases adequately, permitting unethical guardians to deplete their wards’ assets by means of excessive, exorbitant and even fraudulent fee billings for legal, administrative or nonexistent “services.”
Without meaningful oversight by court administrators and strong law and enforcement by the legislative and executive branches, previously ample estates can be systematically “protected” into indigence. The guardians then place these wards on Medicaid for the remainder of their lives – leaving the American taxpayers holding the bag.
This appalling practice is not Medicaid fraud per se. It is, however, an unaddressed breach of fiduciary duty, resulting in an unforeseen and improper load on the Medicaid system and an unlawful burden on the American taxpayers who are supposed to be protected against this very thing happening - a primary purpose of the “protective” statutes.
Additionally, the excessive cost of needlessly supporting individuals who don’t belong on Medicaid threatens those persons without adequate assets who need essential Medicaid services, which are now jeopardized by threatened budget cuts during our country’s economic crisis.
Marie Long, a proud woman who could have well afforded to pay for her care through end of life before the guardianship “protected” her into indigence, is now on the Medicaid rolls at taxpayer expense, much to her personal embarrassment and distress.
The guardianship, by law, was supposed to protect and conserve Long’s assets for her lifetime care. Instead, it exploited her financially (a paramount definition of “elder abuse”).
Surprisingly, the perpetrators of this insidious bilking
were not charged with any crime (financial exploitation)
because the judge in the
case approved the outrageous fees, thereby “sanctioning”
the misuse of Long’s assets.
As NASGA has previously stated, guardianship law was not and is not designed to be a Medicaid spenddown. Fiduciaries picking the financial bones of vulnerable people and then sticking it to the American taxpayers is not technically Medicaid fraud per se, but the Medicaid program and the taxpayers are fleeced all the same, along with the elderly or disabled “wards.”
The lack of meaningful monitoring and oversight has been permitted to go on for years despite numerous studies and reports of problems by guardianship practitioners and advocates. An unethical fiduciary, despite having sworn to conserve the assets of his/her wards' estates, is thus largely free to misuse the court appointment for sheer self-enrichment.
Millions can be made on a single
estate. The cliché “the pen is mightier than the sword”
appropriately describes assets pilfered
and sometimes without
court approval, by unnecessary and inflated fee and
commission billings. The judicially ignored
plundering of assets by fiduciaries
persons to whom property and power is entrusted for the
benefit of another - constitutes a shocking and ironic
misuse of the protective statutes, the intent of which
was to protect the public against an incompetent person
becoming a public charge.
FIDUCIARY DUTY AND EXPLOITATION = ELDER ABUSE
To do otherwise is elder abuse.
CONTINUED FAILURE OF MONITORING AND OVERSIGHT = “LICENSE
THE NEW GOLD RUSH GAO’s March 2011 report, “Elder Justice: Stronger Federal Leadership Could Enhance National Response to Elder Abuse," opened with this statement:
This failure of government – judicial, legislative and executive - to strengthen and enforce the law to protect the public, has permitted an escalating involvement by court-appointed fiduciaries of "wards of the state" in a Machiavellian type of exploitation; thus converting guardianship into a profit industry where fiduciaries can engage in a feeding frenzy.
These fiduciaries are mining the gold while giving their wards, their wards’ families, and the taxpayers the shaft.
The bleeding of
assets from a financially able ward’s estate and
resultant application by a fiduciary for Medicaid
benefits for the ward
does not comport with the protective statutes or
with the law controlling Medicaid.
Unlike the protective statutes, which require judicial approval for fee taking, OBRA permits asset transfers to “pooled trusts,” where the assets are held by a nonprofit organization, hidden from the court proceedings and the public.
Not considering assets when applying for Medicaid, ironically and unwittingly permits their use for exploitative billing of "administrative" fees by unethical fiduciaries. Pooled trust funds are specifically designed to be used for "care"; instead, the intended beneficiaries of said funds wind up in inadequate facilities with their care needs not met and paid for by Medicaid (at taxpayer expense), instead of by their own previously ample assets which were "shielded" in these pooled trusts.
One of our members reports of the fees billed to – and paid by - her mother’s OBRA trust in 2010, a stunning $68,000 was described as “legal and administrative” fees. Her mother, the ward, received only a mere $500 for her actual benefit. Shockingly, because the guardian placed $100,000 of her mother’s assets in the OBRA trust, that $100,000 was “hidden,” and her mother was approved and placed on Medicaid - and taxpayers, once again, are footing the bill while the fiduciaries profit.
Her mother could well have afforded to pay her own way for care at home or in an upscale facility but sadly, instead, she was forced into inferior care at a substandard facility where she does not want to be --and there’s nothing she or her family can do about it.
OBRA requires Medicaid be repaid upon the death of
the ward, but how often are funds left for repayment
given the ease of milking the fund assets? Is
Medicaid keeping track?
HEAR US NOW?
Since then, in ongoing communications with the states, we have yet to find a state currently reviewing Medicaid applications made on behalf of wards of the state to determine if assets were wrongfully depleted by the guardianship prior to application.
There are no statistics to quote, nor has anyone or any entity looked at this form of Medicaid fleecing for the purpose of documenting the unknown dollars lost and/or wasted, nor has the subject been brought up to Congress for review and discussion by anyone but NASGA, and we bring it to you in depth today.
Due to the impossibility of getting 50 states to quickly amend their statutes and practices, NASGA urges Congress to take immediate action as follows: direct state governments to set in place special steps for screening of Medicaid applications made by fiduciaries on behalf of their wards, including a “lookback” as to how the assets were spent, dissipated or transferred, whether kept in a guardianship account or a pooled trust, and with or without court approval as to reasonableness or need.
Additionally, there should be new penalties for misuse of assets and failure to conserve as required by law, including appropriate means for recovery against the fiduciaries.
law controls this area, which
brings us, once again, to Congress and its duty to
“INSTEAD OF PROTECTING THE PUBLIC INTEREST, GUARDIANSHIP HAS INDEED BECOME A BURDEN TO THE YET UNWARY TAXPAYER: A TRULY APPALLING AND OPPRESSIVE CONSEQUENCE OF A GOOD LAW GONE BAD!”
Depleting the assets of an estate and forcing the ward onto Medicaid at public expense is not a demonstration of the good faith and fairness required by 42 U.S.C. 3001. Instead, such action constitutes an open and unaddressed breach of fiduciary duty and is an odious form of elder abuse which MUST BE STOPPED for the sake of the health and wealth of our nation!
vulnerable elderly and disabled - and for their
families who are forced to fight, at great cost
(both financially and emotionally)
Finally, we continue to remind Congress that Boomers turn 65 this year. As they age, the demand on our healthcare system and programs will only increase. Congress must STOP:
• the current enormous and free-flowing drain of Medicaid funds caused by unlawful and abusive guardianships;
• the unethical fiduciaries who are fleecing the system, the wards and taxpayers; and
• the courts who fail to obey and properly apply the
law and to protect our vulnerable elderly and
disabled citizens, their families,
/s/ Elaine Renoire
The term “guardianship” will be used herein
to indicate both guardianship and
This report focused on Adult Protective
Services, as did the hearing by the
Senate Special Committee on Aging, where Mickey
 Briefly addressed in our first Open Letter to Congress
Guardianship abuse / conservatorship abuse IS elder abuse!
© NASGA - Stop Guardian Abuse 2006