“We are seeing financial exploitation of the elderly by court-appointed third-party guardians where there is little oversight,” said Debby Valdez, president of Guardianship Reform Advocates for the Disabled and Elderly in San Antonio.
The problem is exacerbated by a reported rise in guardianship cases. In a survey conducted by the Center for Elders and the Courts, 37% of judges, court managers and clerks who responded said guardianship filings have increased over the past three years.
Often it is a child or other relative who is appointed as a guardian when an elderly person can no longer manage his or her own financial affairs. However, 78% of abusers of the elderly are a spouse, child or another relative, and almost one in four victims is age 86 or older, according to a 2013 Department of Aging report. “When dementia comes into the picture, it further complicates the situation,” said Stephen Moses, president of the Center for Long-Term Care Reform in Seattle.
“I can see the conflict of interest with the financial advisor when a guardian is appointed because they are managing a substantial amount of money and they are being crowded out by way of a third-party guardian,” Moses said.
Guardianship is a fiduciary relationship created by state law in which a court gives one person or entity the duty and power to make decisions for another person. Guardian duties can include arranging care for a person, as well as managing and investing her assets in her best interests, and using the income and principal to pay for her comfort.
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Advisors As Guardians