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Guardians of the Elderly: An Ailing System Part V: Guardianship Entrepreneurs Entering the

September 24, 1987

Guardians of the Elderly: An Ailing System Part V: Guardianship Entrepreneurs Entering the Field


PHOENIX, Ariz. (AP) _ Charles Arnold looks out on the rest of country from this retirement mecca and sees unlimited possibilities for the guardianship business.

″I think guardianship is unquestionably the future,″ he says. ″The business is overwhelming and the need is dramatic.″

An attorney and former public guardian in Phoenix, Arnold is part of a new and growing field of guardianship entrepreneurs - professionals who, for a fee, will run the lives of old people.

Called professional guardians or fiduciaries, they take on a role once held by sons and daughters. They earn their money by making all the decisions for their elderly wards, including where they will live and, in some extreme cases, when they will die.

So promising is this field that San Diego Community College has begun night courses on how to be a professional guardian.

Their fees come from the people whose lives they control. No state yet requires a license to hang out a shingle.

The ranks include people such as Frank Repensek, who agonizes over the medical decisions he must make for his wards.

″Substituting judgment for another adult who sits there and says I don’t want this operation, it’s just miserable,″ sai Repensek, the executive director of the Guardianship Program of Dade County Inc., a non-profit Miami firm.

Others define their role in terms of cost effectiveness, economies of scale and bottom lines.

″It is basically money management,″ said Alan May, a Detroit-area attorney with 400 wards. ″It is basically the review of their financial affairs to make sure the nursing homes are charging them the correct amount of money, that the nursing home is paid, that the money is provided for their needs.″

While guardianship still is largely seen as a family affair, a legal step taken by children to better care for their parents, a year-long Associated Press study of the nation’s guardianship systems found an increasing number of strangers taking over as the legal ″parent″ of the elderly.

In more than 2,200 files reviewed by the AP nationwide, about one-quarter of court-appointed guardians were banks, attorneys and businesses who charge for their services.

The investigation also detailed instances where private guardians have proven costly and, in some cases, detrimental to their wards through avarice or ignorance:

- Susan Lehmann, a Grand Rapids, Mich., professional conservator was sentenced to nine months in jail in 1985 for stealing $48,000 from her wards. She was accused of cashing wards’ Social Security checks and buying a $6,000 car for herself with wards’ money. A presentencing report said she had told a witness she ″needed the money and they didn’t.″

- A 1982 Miami grand jury report told of a lawyer who served as both attorney and guardian and double-biled his ward’s estate to the tune of $77,000. The charges included $1,013 for the three hours it took to buy a $200 clock for the ward.

- When a Hagerstown, Md., nursing home complained in 1978 about the unpaid bills of an elderly resident, court officials discovered her guardian, an attorney, had failed for five years to collect rents or pay taxes on a home she owned. The ward lost the home in a tax sale.

Court officials note that these cases are the exception. Many professional guardians are dedicated, caring people who can help the elderly through their remaining years.

For some, the deeper issue is the commercialization of guardianship, a shift from family caring and commitment to a business arrangement that often promotes itself with color brochures and slide-tape presentations.

″They can provide for all their conservatees’ needs, from buying slippers or dentures, but they don’t provide the social contact that is necessary,″ said Janet Morris, a Legal Services attorney in Los Angeles.

The growth in professional guardianship has many causes. The movement of retirees to the Sun Belt, where professional guardianship thrives, has cut off many of the aged from families and friends.

Hospitals and nursing homes looking for someone to guarantee the payment of bills for elderly patients often direct cases to private guardians when family or government agencies are not available.

″People will have some sort of crisis that puts them in a hospital or a nursing home and they can’t return home. The discharge planners at the hospital have to get them out and they come to us,″ said Judith Chinello, a guardian in Glendale, Calif., whose office receives 25 referrals a month, mostly from health care centers.

Some companies court business from hospitals and nursing homes, agreeing to take on wards with few resources in consideration for referrals to better-off wards.

″If we can make enough to meet the payroll, we’ll take on charity cases,″ said Bob Webster, deputy director of Planned Protective Services Inc., a non- profit Los Angeles firm.

Some firms aim for specific markets. Ourself Conservatorship Services in Santa Ana, Calif., avoids committing itself to wards with estates of under six figures. ″We have to tried to stay with estates of $150,000 and over,″ said Judy Okonski. ″We have a policy of staying with these people until they expire.″

Professional guardianship does not come cheap. Ms. Chinello charges $65 an hour for her time, less for duties performed by workers who may cook, clean or chauffeur a ward. Planned Protective Services bills at $37.50 an hour for nearly all its services, but offers them free to 42 percent of its 200 wards.

About half those charity cases are people whose estates have trickled dry, in part, because of guardianship fees.

But the generosity of Planned Protective Services is not common. In many situations, once the money is gone, professional guardians petition the court to end their service, leaving the wards, already declared incompetent to handle their affairs, in a legal no-man’s land.

″The outrage about the private ones is that when the money runs out, they refer it to the public guardian,″ said Raymond Steinberg, who studied guardianship referrals in the Los Angeles area for the University of Southern California.

Repensek says he gets calls from attorneys eager to hand over wards whose funds are exhausted to his non-profit group, which has 80 percent indigent cases.

″When the assets run out, we get the call,″ Repensek said.

The AP found a file in Dallas that contained a letter to the judge from a guardian who asked to resign because ″funds in the estate will diminish when present fees″ are paid. The guardian, an attorney, was paid and went on to resign.

At a Minnesota bar association conference attended by the AP, prominent probate attorney Milton Bix was asked by a participant if there was a need for a guardian once a ward’s money ran out.

″No,″ he said. ″Never be afraid to petition the court.″

Most professional guardians advise keeping a close eye on the ledger because profits can be marginal. May, the Detroit-area probate attorney, said he was in the business only because ″it’s a nice part of my practice. It fits.″

″Being in the probate court all the time makes me a little bit more unique in my cost factors,″ he said. ″It’s more cost-effective for me.″

May said he nets $10,000 to $15,000 annually from his guardianship business. He keeps his costs down by concentrating on wards whose day-to-day care is handled by nursing homes. Even though the court often assigns him total responsibility for his wards, he rarely has contact with them.

″There is very little visitation,″ he said.

First of America-Detroit, a Michigan bank company, also takes this business-like approach to the management of people’s lives. The bank handles 700 conservatorships, the legal control of a ward’s money, through the Veteran’s Administration. It even has a special area for these clients - off a back elevator.

″I think you can understand,″ said Robert Adams, an assistant vice president. ″We have people who come in on a daily basis to pick up their money for that day. Some of the people you think are street people are really under guardianship.″

Now the bank plans to market its services to the general public.

Adams said the company’s experience allows it to take on estates of less than $100,000 and still make a profit.

″They can be very hard accounts to administer,″ he said. ″But there’s an economy of scale and that’s what we’re looking at in these smaller cases.″

Some worry that the rise of professional guardianship has come without regulations and licensing. Most state laws place few or no conditions on who can be a guardian; some ban nursing home employees and convicted felons, but few require background checks. There is no state licensing of professional guardians.

″It bothers me, not as a businessman but as someone who cares what is happening, that just anyone can hang out a shingle and become a professional fiduciary,″ said Alan Bogutz, who operates Care Coordinators Inc., a Tucson, Ariz., private guardianship firm. ″I’m not concerned about the competition, I am concerned that some people might get hurt.″

In San Francisco, where the number of professional guardians jumped from zero to 20 in one year, James Scannell, the city’s public guardian, feels licensing is essential.

″You have more protection from someone putting a roof on your house than you do from someone who can put you in a nursing home,″ he said.

Others note that licensing won’t be a cure-all. ″You can’t legislate compassion and morality,″ said Ms. Chinello, although she favors licensing as a first step.

Some see a time when professional guardians will be a link in a corporate- government system of health care corporations, insurance companies and social service agencies that will manage the elderly.

For Arnold that means a ″one-stop shop″ where all services - and decisions - would be taken care of.

″I think that government is going to recognize that we haven’t found a good way of dealing with old people,″ he said. ″We’re going to need sort of total care packages where various institutions act as the guardian.″


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