Fla. Stat. § 744.3678 explains the data which a guardian’s annual accounting is required to contain; namely receipts, expenditures, disbursements, and capital gains/losses of guardianship assets. Though not interpreted by any appellate court to date, this statute further suggests that a guardian must account for assets in the Ward’s name and for assets held by the Ward’s revocable trust if the guardian is also serving as trustee of said trust. Interested persons, such as next of kin, are permitted under Florida law to object to any transaction or information disclosed in one of these guardianship accountings. Fla. Stat. § 744.367.
Recently, we successfully litigated objections to a guardian’s accountings in a Palm Beach County guardianship matter. In our case, the Ward was adjudicated totally incapacitated in April 2011 and one of her two sons was appointed as her plenary guardian with authority to exercise all delegable legal rights and powers of the Ward. Because of the Ward’s incapacity, the Guardian also succeeded the Ward as trustee of the Ward’s revocable trust. Our client was the Ward’s other son, and brother of the Guardian.
From the inception of the guardianship, the Guardian in this matter has been chronically incapable of filing an account which the Court would accept. As recently as March 2014, the Guardian was still seeking Court approval of his accounting for the fiscal year April 2011 - April 2012. When the Guardian filed an amended accounting for this period, we objected on grounds that the Guardian (i) improperly commingled guardianship and trust assets and (ii) used the Ward’s funds/Trust funds for his own benefit and/or stole from the Ward. With respect to the latter ground, we noted that there were substantial expenditures of funds for extensive renovations to the home of the Guardian’s girlfriend. The Guardian maintained that these expenses were justified since the Ward was living in the home of the Guardian’s girlfriend. The Court sustained our objections and ordered the filing of a Second Amended Annual Accounting and an Accounting of Trustee. The Guardian filed these accountings in February 2015.
We objected to the Second Amended Annual Accounting and an Accounting of Trustee on numerous grounds. Notably, these attempted accountings by the Guardian disclosed for the first time that the guardianship and/or Trust loaned money to the Guardian. That is, the Guardian maintained that any transactions which appeared on paper to suggest that he was spending the Ward’s funds or Trust funds on himself were in actuality part of a large-scale loan made to the Guardian. These accountings further set forth the amount of funds spent on the aforementioned renovations to the home of the Guardian’s girlfriend. We objected to existence of any loans, as the Guardian was not authorized to loan money to himself. See Fla. Stat. §§ 744.446; 744.454. We further objected to the renovation of the girlfriend’s home as being beyond anything reasonably necessary for the Ward’s care (i.e., the renovations served the interests of the Guardian and his girlfriend). It should be noted that the amount at issue in the objected-to transactions exceeded several hundred thousand dollars.
The Court sustained most of our objections and made detailed findings regarding the character of the Guardian’s conduct. The Court’s order, which has been reproduced here in a redacted form, provides great insight into how the purposes of the guardianship statutes—protecting the rights of incapacitated persons and managing their financial resources—can be effectively implemented and furthered through review of a guardian’s conduct. As is readily apparent from the Order, the Court is greatly disturbed and frustrated by the Guardian’s actions, describing them as unconscionable, unacceptable, reprehensible, and “inapposite to . . . fiduciary and statutory duties as a Trustee and Guardian.” The Guardian’s conduct is characterized as a “systematic and purposeful looting of assets,” representing an “attempt to place . . . assets outside the protection of the Court and the law, and to deny access to those assets to any other interested person.” The Court suggests that the Guardian’s conduct may even be criminally actionable. In rendering its decision, the Court explains that the Guardian will again have to account (for a fourth time) and will be liable to our client for attorneys’ fees and surcharge.
The factual findings and conclusions of law set forth in the Court’s order cannot be understated as the Court chronicles its frustrations with the Guardian in excruciating detail, creating in the process an example which all future guardians should endeavor to actively avoid emulating. This case represents a victory not just for our client and our firm, but for those involved in guardianship matters generally. Put simply, Courts will hear objections and will review all the evidence, and if warranted, will punish wrongdoing by guardians.
Full Article & Source:
Trial Court Slams Guardian for Theft of Assets and Ignorance of Duties