There’s been a nagging question in the months of debate over reforming New Mexico’s guardianship system. The question? How to ensure that estate plans and trust directives are honored, in the event a person becomes incapacitated and is placed under a court-ordered guardianship. The state legislature asks whether it means that a conservator or a guardian also has the authority, if a trust is in place for that individual to also access the trust.
The Albuquerque Journal reports, in “Who guards the guardians? Estate planning questioned in hearing,” that the 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. The proposals come as a result of a six-month study by a commission appointed by the state Supreme Court.
Guardianship commission chairwoman Wendy York said that under the state’s current system, when a person had an estate plan or a trust in place, a conservator could decide that the money should be used differently in the care of that person.
“What happens to parents who put a trust in place? To me there should be a document that’s solid stone and doesn’t get changed,” Rodriguez said.
York is a retired state district judge from Albuquerque. She noted that judges in guardianship cases are faced with a variety of scenarios, so it’s hard to say there should never be a situation where a trust wouldn’t need to be tapped for the protected person.
However, a commission proposal provides that 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.
State Sen. Jerry Ortiz y Pino, D-Albuquerque, a guardianship commission member, noted that it reinforces the idea that the trust takes precedence, unless there’s a set of new conditions that must be enacted. Currently, the conservator has a great deal of latitude in convincing the court to overturn the trust, he said.
The legislative hearing discussed the lessons learned from the collapse of a leading New Mexico guardianship firm, Ayudando Guardians. Its top two executives are facing federal charges of embezzling more than $4 million of their clients’ money. Another Albuquerque company, Desert State Life Management, is alleged to have diverted millions of dollars set aside in trusts for special needs and elderly clients. However, there have been no criminal charges filed.
State Rep. Joanne Ferrary, D-Las Cruces, said district judges she has talked to emphasize the importance of conducting audits. Guardianship companies file annual reports with the courts, but the commission wants the legislature to fund investigators or auditors who’d review the reports and alert the judges in the cases about “red flags.”
Ortiz y Pino, a longtime advocate of reform, 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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Jeffrey Bellomo, Esq.