The Traditional Role of the Superior Court
The Superior Court supervises guardianship administration by supervising the guardian, its “agent.”10/ How this works in practice is that the guardian petitions the court for approval of its management of the ward’s affairs. In King County, this is done on the motions calendar in the ex parte department. The court might be asked whether a bill should be paid or the guardian’s care plan approved.11/ The court also approves the guardian’s accountings and investment strategies.12/
A Contrast to Other Activities
The “job” of a guardian is to manage the affairs of an incapacitated person. Other entities with similar jobs are not “supervised” by courts. An example would be a nursing home. Nursing homes manage the affairs of persons not able to care for themselves and are regulated by the Department of Social and Health Services, which is under the executive branch.13/
The larger guardianship companies also function as financial institutions. They provide trust and financial management services similar to a bank or trust company. Like a bank or trust company, the larger companies also handle large sums of money. Guardianship Services of Seattle, for example, manages in excess of $44 million.14/ Banks and trust companies are not “supervised” by courts, but regulated by the Department of Financial Institutions.15/ The Department of Financial Institutions also is under the executive branch.16/
Problems With Court Supervision
Little or no relevant training. A major problem with court supervision of guardians is that the typical judge or commissioner has little relevant training. Accounting, finance and personal care are not required courses in law school. A judge or commissioner also is unlikely to have time to perform the necessary inquiry. A recent Seattle Times article quotes a local commissioner, as follows:
[The Commissioner], who handles guardian cases in King County, complained that he is expected to master complex accounting, investment strategies and what constitutes proper medical care – all while keeping cases moving. “I read them and I look for the outrageous,” he said.17/
By contrast, agency personnel under the executive branch typically have specialized training. For example, examiners with the Department of Financial Institutions are required to have a degree with course work in accounting or finance (or other commensurate education or experience).18/ Oversight is conducted according to an agency protocol.19/ This is opposed to a busy motion calendar in which a judge or commissioner does the best he can.20/
Court approval prevents further inquiry. A related problem is that once the court approves a guardian’s accountings, other entities usually will not investigate, although, as noted above, there typically has been little investigation by the court. The Board ordinarily will not investigate due to its deference to the Superior Court. Other entities, e.g., a local fraud unit, likely will not investigate due to the order approving the accounting, which makes it look as if there already has been a full investigation.
The prohibition against ex parte contact interferes with a court’s ability to provide effective supervision. In general, successful supervision of an activity requires a close relationship between the supervisor and the person supervised. A good supervisor also should be open to receiving information and complaints from multiple sources.
This does not occur in the context of court supervision of guardians due to the prohibition against ex parte contact.21/ The prohibition prevents courts and guardians from developing the necessary close relationships. It also prevents courts from learning about a guardian’s wrongdoing. Persons with information generally are prohibited from contacting the court.
Complaining parties take on the risk of litigation. Another problem with court supervision is that wards or other complaining parties generally are required to make their complaints in the context of a court hearing. Meaningful participation requires the hiring of counsel.22/
If the guardian contests the complaint, the ward or other party will find himself in litigation against the guardian. If the complaint is unsuccessful, the ward or other party may be required to pay the guardian’s fees.23/ With the inherent cost of litigation, courts often are reluctant to perform an in-depth inquiry.
These factors create “chilling effects” so that complaints are not made and, if made, are not fully pursued. These factors do not exist in the usual regulatory scheme. Instead, complainants generally have immunity from liability and the agency’s investigation usually is conducted outside of a litigation context.24/
How Licensing and Regulation Might Work
In other states, there are emerging programs in which oversight is provided via the executive branch. For example, California recently enacted SB 1550, which establishes the Professional Fiduciaries Bureau within the Department of Consumer Affairs.25/ Idaho has a pilot program in which conservator reports will be reviewed by its Department of Finance.26/
The advantage to using existing agencies is that they already are set up. On the other hand, some existing agencies, such as DSHS, would seem to have a conflict of interest.27/ For this reason, a stand-alone agency could be desirable. Funding could be obtained from licensing fees or from the wards’ estates so that the agency would be revenue neutral. Agencies such as the Department of Financial Institutions are revenue neutral.28/
Without effective oversight, abuse of wards by their guardians will only continue. It is time to consider a different paradigm. Guardians should be licensed and regulated under the executive branch, not the courts. Other methods of third-party oversight should be investigated and explored.