In New York, Complainants about Fiduciary Abuse Seek Action by NY Attorney General

One of our good readers sent us an item by CityLimits.org tracking recent complaints made to (and about) the NY Attorney General.  The title of the article is They Say Legal Guardians Ripped Them Off– and the State AG Let Them.  I’ve come to expect that when I see an investigative piece on problems with guardians, I will read comments from a range of national advocates, such as Dr. Sam Sugar of Americans Against Abusive Probate Guardianship or Richard Black with the Center for Estate Administration Reform.  Both individuals comment in this particular piece.

There are many challenges ahead for much needed reform efforts, including the fact that different laws can govern different forms of fiduciary relationships.  For example, even though the article focuses in major part on “guardians,” a label used to describe individuals or entities appointed by the court to assist an individual deemed incapacitated and unable to handle his or her own affairs without such a court-appointment, the article demonstrates that the problems can arise outside the guardianship arena. 

In the opening tale for the article, the individual in need of assistance, a 31 year old disabled daughter, was apparently the the beneficiary of her deceased father’s trust. The father became entangled with an untrustworthy individual shortly before his death, and that person was named the trustee.  The actions by that individual — described in the article as a “disbarred” lawyer and former state senator — control much of the dynamic.  It is not clear from the article whether the daughter’s parents were estranged before the death of her father, thus sidelining the mother from accessing the trust in trying to help their daughter.  Guardians later appointed by court for the daughter reportedly contributed to the costs for the estate. Yet key allegations of abuse focus on the actions of the alleged untrustworthy trustee, who was selected for this fiduciary role by the father, not the court. 

The article reports on this as an example where the AG has allegedly declined to intervene following reports of fiduciary abuse.

Guardianship reform is important and, thank goodness, is ongoing in many states.  But true reform is needed in the hearts and minds of abusive individuals in a variety of financial caregiving relationships, not just guardianships.  The challenges for courts and law enforcement officers, including AGs and other prosecutors, will only grow without a stronger ethical commitment at the core.