Editorial: J.W.’s missing money a guardianship travesty

“Guardians and conservators provide consistent beneficial results for families. They are responsible for … managing the incapacitated person’s assets so that they have enough to see them through their life.” – Chief District Judge Nash

Except when they don’t.

Journal investigative reporter Colleen Heild’s shocking July 9 story shows just how wrong things can go in this system set up to protect some of our most vulnerable people.

Heild reported on a lawsuit that alleges $600,000 in a trust account set up for a 65-year-old developmentally disabled woman referred to as “J.W.,” her brother and two others had been drained while under the management of Desert State Life Management – which was the court-appointed conservator in the case. Yes, the same conservator that is supposed to manage the incapacitated person’s assets “so that they have enough to see them through life.”

How this could have happened with both a court-appointed conservator and guardian is a mystery – as are many things in this secrecy-shrouded system.

As part of the court oversight, conservators and guardians are supposed to file annual reports with the court – presumably so the judge can review them. Desert State, a nonprofit trust company, was appointed conservator by Judge Valerie Huling in 2014. A District Court docket sheet says the annual reports were, in fact, filed by Desert State. An attorney who filed the lawsuit says the reports didn’t indicate how much money was in the account, but had a notation that an accounting “was attached.” However, the lawyer said there was no such accounting in the court file.

That would seem to be important.

Did Desert State, which was allowed to serve without posting bond, perpetrate an active fraud on the court via presumably false accountings that showed both expenses and, more importantly, how much money was left? Or did it manage to skate by without filing that accounting and nobody in the court system challenged the company? A court official refused to answer that question, saying she couldn’t comment because it would violate state law making guardianship/conservatorship cases confidential.

And speaking of guardians, what role did the separate court-appointed guardian play – or should have played – in this case?

Nash penned the words at the top of this editorial in an op-ed to the Journal last year in defense of the system designed to protect the incapacitated who are declared to be wards of the court. Critics contend the system lacks protections for wards and families, and doesn’t have sufficient public accountability. Defenders attribute many criticisms to “high family conflict” and emotion, and say the secrecy mandated both by statute and promoted by court practice is essential to protect the privacy of the wards.

Those arguments don’t work very well in the case of J.W. and the others. Their money, it appears, is gone. J.W., her brother and two other disabled women were beneficiaries of a trust set up by a Sandia Laboratory engineer who died in 2008. No “high family conflict” here. And it doesn’t work for Joseph A. Perez, who has cerebral palsy as the result of a medical malpractice incident in the 1980s. He also had Desert State as his conservator. His checks stopped coming six months ago. There are no families raising a ruckus. No money left for the wards. If secrecy is protecting anyone in these cases, it’s the court system and the industry.

Meanwhile, regulators believe Desert State burned through an estimated $4 million in trust funds affecting 70 or more clients, with the money drained off to businesses controlled by CEO Paul Donisthorpe. In the case of J.W. and Perez, Desert State controlled their trust accounts before being appointed as conservator.

A commission established by the State Supreme Court is holding hearings on the system and is set to make recommendations in October.

It would do well to consider the case of J.W.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.

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Editorial: J.W.’s missing money a guardianship travesty