Peter
Max, who now has dementia, made millions creating psychedelic art that
for a time put him on par with Andy Warhol as a ‘60s cultural icon.
Sara
Abbott, who has a form of autism, gets by on $1,200 a month from Social
Security disability and lives with her mother in a small house in
southern Indiana.
Both are entangled in guardianships that were supposed to serve as salves but are instead mired in turmoil.
The
similarities in their cases, despite deeply disparate lives, reveal the
emotional and financial risks enshrouding guardianships. As Max’s
memory faltered and his finances fell into disarray, he purportedly
consented to having neutral guardians oversee his multimillion-dollar
estate to achieve peace among his feuding family members. Abbott’s
mother initiated a guardianship after a counselor suggested it.
Together
their guardianships, which both began in 2016, highlight a simple truth
found in a six-month Bloomberg Law investigation: It doesn’t matter how
much money people have or how carefully loved ones watch over them;
guardianships can evolve into costly quagmires where tussles over fees
and control deter from the case’s core mission.
In New York, Max’s
guardians and their lawyers have billed millions amid the family’s
legal squabbles, suits, and countersuits. As a federal judge recently put it, it’s a “toxic situation.”
In
Indiana, Abbott is pushing to terminate her guardianship after a tense
journey. Her former guardian billed 91% of her total income during one
eight-month period while questioning the family’s spending on everything
from fixing the roof to buying a used car.
Across the US,
guardianships are regulated in hodgepodge fashion, with different rules
from state to state and no national requirements on who can become a
guardian or how much they can earn. Adults in the system are protected
by a flimsy regulatory safety net.
In any courtroom case, judicial
oversight is vital to ensure legal costs don’t spiral out of control,
said Jerome “Joe” Studer, a Chicago attorney who specializes in legal
fee issues.
Studer said he was taken aback by Bloomberg Law’s
findings on the fees in the two cases, particularly by the Indiana case
in which the guardian billed nearly Abbott’s entire income. “The ratio
strikes me as outrageous,” said Studer, founder of Legal Fee Analytics.
Max: Ceaseless Conflict
“Yeah, I understand,” was
all it took for Max, 85, to enter into a guardianship that has done
nothing to resolve the family’s feuds.
“You understand?” Judge Laura Visitacion-Lewis asked
at the January 2016 hearing. She noted he was shaking his head to
indicate he didn’t have any questions. With that, Max became a “Person
In Need of a Guardian,” or PING, in court parlance.
Max, now in the advanced stages of Alzheimer’s, wasn’t formally adjudged to be incapacitated at the hearing, a ruling that could have negatively impacted the value of his art.
At the time, he was still painting and making public appearances.
 |
Peter Max attends a 2014 event in New York City. Photographer: Ben Gabbe/Getty Images for Gotham Magazine |
His court-appointed counsel, Elizabeth Adinolfi, said he understood
he needed assistance, “particularly in managing his finances,” and
thought “it would be beneficial for him to have a neutral third party
fulfilling that role,”
court transcripts show.
The
references to neutrality were a nod to the acrimony among Max’s family
members over money, his art, and the family company ALP, Inc. “He loves
his children very much. He loves his wife very much. And he does not
want there to be any reason for the three of them to be in conflict,”
Adinolfi said.
They hoped a neutral guardian could help “achieve some level of peace.”
More than six years later, conflict and litigation envelop the guardianship.
And it is costing Max a fortune.
Abbott: In the Dark
For Sara Abbott, 27, and her mother Diana Abbott, the legal morass began after a well-intentioned suggestion.
In
2016, a counselor recommended Diana put her daughter in a guardianship.
She called the lawyer who handled her husband’s estate, and he agreed
it made sense.
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Sara Abbott wants to end her guardianship. “If I don’t, I’m going to lose my mom, my house, my life.” Photographer: Jim Vondruska/Bloomberg |
Diana was skeptical at first. “I said, Why do I need guardianship?
I’m her mother.” But with two professionals suggesting that path, she
became her daughter’s guardian that August.
A former stocker at a
Dollar General store, Diana said she received no formal training. “I
signed a paper, they pushed it through, and that was it.”
She
failed to file biennial reports for 2018 and 2020 documenting her
daughter’s financial affairs and well-being. Diana didn’t know, she
said, she was supposed to file them. Washington Circuit Court Judge
Larry W. Medlock removed her in 2021, questioning her oversight as
guardian. He appointed a local lawyer, Lisa Fleming, as interim
guardian, tasking her with documenting Sara’s spending and assessing her
needs.
Thus began a contentious legal saga in which the temporary guardian’s fees would outpace Sara’s income.
Max: Fees on Fees
Max
had paid about $1.8 million to his court-appointed lawyer, guardians,
and their attorneys by the end of 2020, according to documents obtained
by Bloomberg Law.
And that isn’t the half of it. Outstanding
requests, either pending or approved, add more than $2 million, plus,
conservatively, hundreds of thousands of dollars in accruing unpaid
legal fees.
The guardianship order, filed in December 2016,
revoked Max’s powers of attorney and health-care proxies, giving control
of his finances and care to three court-appointed fiduciaries: a
property guardian, Lawrence Flynn; a personal needs guardian, now
Barbara Lissner; and his court-appointed lawyer, Adinolfi.
Flynn,
who declined an interview request, is Max’s third property guardian, and
he had two personal needs guardians before Lissner entered the picture
in 2019.
The professionals have generated millions in expenses,
either for their own services or for those of lawyers hired to litigate
on Max’s behalf – often against his children over ownership of his art.
One
pending fee request from Lissner, the personal needs guardian, is for
her usual legal rate of $550 an hour. If approved by the court, it would
total $598,664 for 13 months.
Libra
Max, Peter’s daughter, has challenged that as “grossly excessive.”
Lissner’s lawyer said she was unable to comment; the guardian has
defended her billing in court filings.
Lissner doesn’t provide
legal services to Max. Instead, her responsibilities are to attend to
his personal needs and safety. Her time records describe over 1,000
hours of activities sometimes more akin to the services of a social
worker or house manager.
One three minute entry reads “Guardian
emails PING’s son that she hopes he is feeling better.” At Lissner’s
proposed rate, that’s $27.50. Another entry for six-minutes reads
“Guardian emails PING’s son to ask him if he visited his father the
previous day and if he was able to fix the Netflix issue.” That’s $55.
The
records also show that much of her time was spent managing inquiries
from Libra and the daughter’s lawyers. Another attorney, hired by Max’s
property guardian in the legal fight over his art, bills $650 an hour.
Lissner said in court filings she has yet to be paid. She isn’t alone.
As
of May 2021, Max’s guardianship account had a balance below $5,
according to an affidavit Flynn filed. Flynn said he had been forced to
use some of his own money to pay for some of Max’s expenses.
 |
Peter Max poses for a
1967 photo in New York. In 2022, a judge presiding over Max’s case
visited Max and described his apartment as past its prime and said it’s
“really unfortunate that such a formerly wealthy person is living like
this.” Photographer: Santi Visalli/Getty Images |
Despite Max’s substantial estate – comprising more than $15 million
in principal when Flynn took over in 2017 and more than $16 million in
income from ALP over the same period – Flynn said Max was unable to meet
his financial obligations.
Of the more than $16 million in
income, more than $7 million went to cover back taxes, and roughly
$893,000 went to a mortgage and apartment renovations.
The remainder of
Max’s income has been spent trying to maintain the life the renowned
artist had grown accustomed to with his late wife. Flynn said he needs
at least $2.5 million a year for Max’s expenses but is receiving only a
fraction of that.
The presiding judge has made clear the professionals will be paid.
“My
first priority is to make sure that Peter is cared for in the best way
possible,” Judge Lisa A. Sokoloff said during an April 22, 2022,
hearing. “My second priority is to make sure all the attorneys who
worked on this case get paid. It is astonishing to me that there are
over $2 million in attorneys’ fees owed.”
Abbott: Questions and Fees
After the guardian was appointed to examine her case, Sara Abbott’s legal fees skyrocketed.
The
temporary guardian, Fleming, quickly raised red flags with the judge
about Diana’s use of Sara’s $1,168 monthly income, which was derived
from Social Security Disability Insurance and Supplemental Social
Security.
Eight days after Sara received one check with back pay
in 2018, Fleming wrote, Diana bought a 2015 Ford Escape for $19,455,
writing a check from her daughter’s account. “It is important to note
that Sara does not drive, and the car is in Diana’s name only,” she
wrote.
Fleming also noted in court filings that Diana put a new roof on their house, spending $4,500 from Sara’s account.
 |
Diana Abbott said she received no training to become her daughter’s guardian. Photographer: Jim Vondruska/Bloomberg |
The accusation, mother and daughter say, is a fundamental
misunderstanding of their situation: The money Diana spent was for her
daughter’s benefit. Since Sara doesn’t drive, her mother provides all of
her transportation. They have lived alone in the tidy family home in
Salem since Sara’s father, Stephen, died in 2011.
“Sara says she
was told the roof had to be replaced or she would lose her Homeowner’s
Insurance,” wrote lawyer Amy Semones, representing Sara.
Said Sara: “How is that not for me? I need a roof over my head so I don’t get rained on.”
Fleming questioned other spending for electric, water and sewer, property taxes, and insurance.
“I
believe there is a continued need for a guardian,” Fleming wrote the
court on March 22, 2021. She said Sara needed help with medical, mental
health, and social interaction needs and suggested Diana have “no
access” to her daughter’s bank account.
Semones said their
spending wasn’t frivolous. Sara “was consulted about and consented to
all of the transactions” while her mom was guardian, the lawyer wrote.
And
while Fleming was scrutinizing the roof and other spending, she was
charging fees that resulted in half a day’s work totaling more than half
of Sara’s monthly income.
On June 6, 2021, Fleming submitted an invoice
for her guardian services for her first 3½ months. Her rate was $175 an
hour. One bill was for $700 for 4 hours of work reviewing documents
Diana provided her, which Fleming used to help form her March report.
In
all, the total equated to more than $1,500 a month, more than Sara’s
entire monthly income. A day after Fleming submitted her invoice, Judge
Medlock approved it. Sara was on the hook for the bill.
The judge
also questioned other spending and told Diana not to “spend money
frivolously.” That September, the judge told Diana to reimburse Sara’s
account $900 spent for Sara’s video games and another $600 on streaming
services.
In all, Medlock ordered Diana to reimburse Sara’s
account $11,720, including $3,000 for the roof and $6,485 for the car.
He suggested she “consider the sale” of the family home.
Semones
quickly pressed the judge about the close scrutiny of Sara’s spending
that simultaneously threatened to deplete her account.
Semones
called some of Fleming’s charges “unnecessary, duplicative and
excessive,” particularly in light of Sara’s modest income. Fleming
billed $175 for one hour spent copying records; Sara said she could make
copies for 10 cents per page. “The invoice contains billable time for
unnecessary travel in situations where a fax, phone call, email or
internet search would suffice.”
In court papers, Fleming said her actions were “made in good faith
on behalf of the protected person” and that she is “entitled to
reasonable compensation.” After Semones questioned her fees, Fleming
reanalyzed her bills – and increased the total by $52.50. The in-person
meetings, she said, “were necessary.”
Fleming declined to discuss the case with Bloomberg Law. “I will not be talking with you about Sara Abbott,” she said.
All
the while, the court denied Sara’s request for money for personal
expenses. After Fleming took over, Diana, who had previously injured her
back, said she was forced to return to work to “make ends meet.” Sara
had to make written requests to the guardian for her bank statements and
required permission to host a yard sale to raise money, wrote Semones,
who was billing Abbott a reduced rate of $50 an hour while also seeking a
nonprofit to represent her at no cost.
Max: Art and Lawsuits
Max was placed into a guardianship in part to prevent family infighting, but that original intention has been thwarted.
Generally
speaking, “the more dysfunction in the family, the higher the costs of
the guardianship,” said Katherine Pearson, a professor at Penn State
Dickinson Law who specializes in policies related to aging. As disputes
escalate, the legal costs spike.
Adinolfi, Max’s lawyer, said she
couldn’t comment on the case. Speaking generally, she said guardianships
can “be the best thing for a family” when they’re not contested. But
when family dynamics are volatile, “it can drive a guardian’s time
through the roof.”
Max founded ALP Inc., named for his children,
Adam and Libra, and himself, in 2000. His children hold equal 40%
shares. Max owns the remaining 20%, now controlled by Flynn, the
property guardian.
In December 2019, Flynn’s lawyer sought to
recover “all artworks produced by Peter,” along with the remainder of
his “valuable intellectual property.”
 |
Peter Max poses in
New York City in 2012 with portraits he created of Paul McCartney. His
family and guardians continue to spar over his estate. Photographer: Timothy A. Clary/AFP via Getty Images |
Flynn asserts that Max never intended for ALP – and in effect his children – to control all of his work while he was alive.
He
claims Max had been suffering from dementia for two years, according to
one of his doctors, when he supposedly transferred his intellectual
property rights to ALP. In effect, Flynn is arguing that Max didn’t have
the capacity in 2014 to transfer his intellectual property, even though
he possessed the capacity in 2016 to enter into a guardianship.
Flynn
has also said he has no choice but to aggressively pursue Max’s claim
over the art, alleging that Libra began intentionally starving the
guardianship in 2019 amid her legal wars with her father’s guardians.
Libra
has authority to determine her father’s ALP income, and in court
filings, has said she reduced his salary to $800,000 because the company
has less cash on hand than normal.
Initially siding with Libra,
Flynn voted to oust her brother Adam as president of ALP in late 2018
but by March 2020, Flynn had changed his mind. He accused Libra of
misconduct and agreed to reinstate Adam as president, provided Adam
agree not to contest the claim to his father’s art – or to oppose the
guardians’ fee requests.
Adam’s attorney blamed
Libra for much of the case’s chaos. “The plain reason that this matter
appears to have spiraled out of control and incurred large requests for
compensation by fiduciaries is directly correlated to the litigation
that was instigated by Libra Max,” wrote Matthew S. Seidner.
Libra’s
lawyer counters that the fees are the consequence of Max being “ripped
from his family and loved ones at the end of his life.”
“Simply
stated, if Peter was being cared for by his family, as is his wish,
there would be no legal fees,” Clifford Meirowitz said. It “strains
credulity,” he added, that he wanted “his life run by strangers.”
Libra has been seeking unsuccessfully since 2019 to have Lissner removed as her father’s personal needs guardian.
Their discord escalated in December 2021, when Lissner sued Libra for defamation in state court following an interview Libra gave on Fox 5 New York two months earlier criticizing the guardian.
So now, the court-appointed official watching over Max is formally at legal odds with his daughter.
Libra
can see her father, but only when Lissner agrees, and is generally
prohibited from accessing his medical information or speaking with his
physicians.
And it has all been approved by the court. Adam has
said he has no problems seeing his father and, in court filings, has
supported Lissner’s care.
In April 2022, Sokoloff – the fifth
judge to preside over Max’s case – told Lissner and Libra to be civil,
or communicate through lawyers. “I don’t want to be called to find out
that Libra isn’t leaving, because I will come over with the police, and
you don’t want that.”
About a week later the judge visited Max.
She described his apartment as past its prime and said it’s “really
unfortunate that such a formerly wealthy person is living like this.”
“He talked to me a little bit,” the judge said. “He was drawing and painting with markers.”
Abbott: Seeking a Way Out
As she found herself deeper in the system, Abbott said she felt invisible.
“I
was being treated like I was insignificant,” she said from her hometown
100 miles south of Indianapolis. “I have a big motivation to get out of
this guardianship. If I don’t, I’m going to lose my mom, my house, my
life.”
Her friction with the guardian was clear to Medlock, who
“observed in Court the behavior of the ward and her mother towards Ms.
Fleming to be disrespectful.” But on this, too, there are two sides to
the story.
Abbott is a detail-oriented woman who keeps careful
track of her schedule. After the judge appointed Fleming as her
guardian, she took to taking notes during their meetings.
“She has not once listened to a word I have said,” she wrote of their first session in 2021.
“Fleming
claims that her goal is to ‘help me save money and be frugal’ despite
the fact that she is/will be charging me for not only these weekly
meetings but also any interactions with her,” she wrote. “The fees for
these meetings will more than likely deplete my account.”
As they
continued to meet, Abbott said Fleming objected to her taking notes.
“Fleming asked me to put binder down. I told her I am more comfortable
with it out,” she wrote of their second meeting. “It is hypocritical of
her to complain of me taking notes for my own records if she does the
same.”
Abbott is now also working with Justin Schrock, an attorney
with Indiana Disability Rights representing her at no cost in her bid
to end the guardianship.
Schrock formally challenged
Fleming’s bills. By October 2021, Fleming had billed $8,915.85 for
eight months – or $1,114 a month, 91% of Abbott’s total income, then at
$1,225.
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Indiana Attorney Justin Schrock is representing Sara Abbott as she fights to be released from her guardianship. Photographer: Jim Vondruska/Bloomberg |
As Abbott awaits her day in court, her case has undergone major
change. Last March, Fleming was replaced as guardian by Loren Pilcher,
chief operations officer of a behavioral therapy company called Sweet
Behavior, who supports Sara ending the guardianship.
In June,
Judge Medlock recused himself from the case, citing its “conflict and
animosity” in an interview. Medlock said he had concerns about some of
the “suspect transfers,” prompting him to appoint Fleming. “I was asking
for a different set of eyes,” he said.
Asked about the family’s
view that the spending benefited Sara, Medlock acknowledged some second
thoughts. “Yes, honestly, when I do look back at it I think they do have
something of a point.” But he said the costs should have been split
between mother and daughter. Medlock agrees Indiana guardians
“absolutely” don’t get enough training.
He said Fleming “did a lot
of work and gave me significant insights into how the funds were
spent,” but admitted her bills “were extensive” and “some of the
meetings with Sara weren’t necessary.”
In
the end, Fleming waived about half of her $12,000 final bill and Abbott
paid $2,600, Schrock said. The judge got the county to pay the balance.
“I thought it best to recuse,” Medlock said. “I wanted to be fair to everybody. I wasn’t sure I could be.”
He
said he’s not convinced Abbott is ready to terminate the guardianship
and felt it better for another judge to resolve that question. “I had
strong opinions about it.”
If the new judge frees her from the guardianship, Abbott said, “I might faint on the spot.”
Along the way, Diana has witnessed a more confident daughter emerge. “Sara has gotten her voice through all this,” she said.
Sara said she is ready to use that voice.
“Fight back,” she said. “Prove you’re functional. Don’t let people treat you like you’re lesser because you’re different.”
