Guardianships: Collaboration Needed to Protect Incapacitated Elderly People
Released: 2004-07-22T00:00:00

Letter

Background

The number of people age 65 and older will nearly double by the year 2030 to 71 million. An estimated 6 percent of people aged 65 or older have Alzheimer’s disease, a degenerative condition that may lead to dementia.

Over time, some elderly adults may become physically or mentally incapable of making or communicating important decisions, such as those required to handle finances or secure their possessions. In addition, while some incapacitated adults may have family members who can assume responsibility for their decision-making, many elderly incapacitated people do not. The Census Bureau predicts that in the future the elderly population will be more likely to live alone and less likely to have family caregivers. In situations such as these, additional measures may be necessary to ensure that incapacitated people are protected from abuse and neglect.

Several arrangements can be made to protect the elderly or others who may become incapacitated. A person may prepare a living will, write advance health care directives, and appoint someone to assume durable power of attorney, or establish a trust. However, such arrangements may not provide sufficient protection. Some federal agencies do not recognize durable powers of attorney for managing federal benefits. SSA, for example, will assign a representative payee for an incapacitated person if it concludes that the interest of the incapacitated beneficiary would be served, whether or not the person has granted someone else power of attorney. In addition, many states have surrogacy healthcare decision- making laws, but these alternatives do not cover all cases. Additional measures may be needed to designate legal authority for someone to make decisions on the incapacitated person’s behalf.

To provide further protection for both elderly and non-elderly incapacitated adults, state and local courts appoint guardians to oversee their personal welfare, their financial well being, or both. The appointment of a guardian typically means that the person loses basic rights, such as the right to vote, sign contracts, buy or sell real estate, marry or divorce, or make decisions about medical procedures. If an incapacitated person becomes capable again, by recovering from a stroke, for example, he or she cannot dismiss the guardian but, rather, must go back to court and petition to have the guardianship terminated.

The federal government does not regulate or provide any direct support for guardianships, but courts may decide that the appointment of a guardian is not necessary if a representative payee has already been assigned to an incapacitated person by a federal agency. Representative payees are entirely independent of court supervision unless they also serve their beneficiary as a court-appointed guardian. Guardians are supervised by state and local courts and may be removed for failing to fulfill their responsibilities. Representative payees are supervised by federal agencies, although each federal agency with representative payees has different forms and procedures for monitoring them.

Each state provides a process for initiating and evaluating petitions for guardianship appointment. Generally, state laws require that a petition be filed with the court and notice be provided to the alleged incapacitated person and other people with a connection to the person. In nearly all states, the alleged incapacitated person is granted the right to be present at the hearing, and the right to counsel. Most states require clear and convincing evidence of a person’s incapacity before a guardian can be appointed. The court may appoint a family member, friend, attorney, a paid private professional, a nonprofit social service agency, or a local public agency to serve as the guardian.

In many cases, both courts and federal agencies have responsibilities for protecting incapacitated elderly people, as shown in figure 1. For federal agencies, a state court determination that someone is incapacitated or reports from physicians often provide evidence of a beneficiary’s incapacity, but agency procedures also allow statements from lay people to serve as a sufficient basis for determining that a beneficiary needs someone to handle benefit payments on their behalf—a representative payee. SSA, OPM, and VA ask whether the alleged incapacitated person has been appointed a guardian and often appoint that person or organization as the representative payee. In some cases, however, the agencies choose to select someone other than the court-appointed guardian. Social Security officials sometimes designate the nursing home where the incapacitated person resides as the representative payee because it provides for direct payment to the nursing home, ensuring continuity of care for the incapacitated person.

In many cases, guardians are appointed with a full range of responsibilities for making decisions about the incapacitated person’s health and well- being as well as their finances, but several states’ laws require the court to limit the powers granted to the guardian, if possible. The court may appoint a “guardian of the estate” to make decisions regarding the incapacitated person’s finances or a “guardian of the person” to make nonfinancial decisions. An incapacitated person with little income other than benefits from SSA for example, might not need a “guardian of the estate” if he or she already has a representative payee designated by SSA to act on their behalf in managing benefit payments. Sometimes the guardian is paid for their services from the assets or income of the incapacitated person, or from public sources if the incapacitated person is unable to pay. In some cases, the representative payee is paid from the incapacitated person’s benefit payments.

Guardians and representative payees may have conflicts of interest that pose risks to incapacitated people. While many people appointed as guardians or representative payees serve compassionately, often without any compensation, some will act in their own interest rather than in the interest of the incapacitated person. Oversight of both guardians and representative payees is intended to prevent abuse by the people designated to protect the incapacitated people.

While the incidence of elder abuse involving persons assigned a guardian or representative payee is unknown, certain cases have received widespread attention. The following are examples of abuse by guardians and representative payees provided by courts and federal agencies: A guardian and an employee of the guardian’s law firm brought a nursing home resident in New York a cake and flowers on her birthday and billed her $850 for the visit using hourly rates for legal services.

Rather than using electronic direct deposit, a guardian in New York City appointed to protect an incapacitated person regularly traveled to their branch bank in another borough to deposit her monthly $50 Social Security check, charging her $300 per deposit.

A company in Michigan acting as guardian for more than 600 incapacitated people committed felonies against them, including selling one individual’s home to a relative of a company employee for $500.

A woman in the position of Public Fiduciary at the Gila County Public Fiduciary’s Office in Arizona served as guardian of incapacitated people and in that capacity embezzled and misused a total of at least $1.2 million of public funds. The county’s investigation concluded that “the Court’s lack of oversight contributed to the enormous loss of public monies.”

A woman in Washington State established a nonprofit service organization that SSA designated as the representative payee for about 200 beneficiaries. One of her clients was a homeless man entitled to retroactive payment of benefits totaling about $15,000. She received the payment on his behalf, but used the money as her own, along with SSA benefits for others. She embezzled a total of approximately $107,000 of SSA benefits.

A guardian and representative payee for veterans pled guilty to four counts of misappropriation after a joint VA and SSA Office of Inspector General investigation substantiated allegations that he had embezzled over $400,000 from the veterans’ estates.

The head of a foundation in West Virginia serving as a representative payee for 140 people (including veterans and elderly people) embezzled over $300,000 from them over a 4-year period, consisting mostly of Social Security benefits.

State Laws Provide for Court Oversight of Guardianships, but Court Procedures Vary

All 50 states and the District of Columbia have statutes providing for state or local court oversight of guardianship appointments, but court procedures for implementing these laws vary considerably. Generally, guardians submit periodic reports to the court, but courts’ procedures for reviewing reports vary, as do procedures for monitoring guardianships and the penalties courts impose when guardians do not perform their duties. Jurisdictional issues, such as courts in 2 states being asked to appoint a guardian for the same incapacitated person, sometimes complicate guardianship appointments. In addition, most state courts surveyed do not maintain information needed for effective monitoring and oversight of guardianships.

State Laws Require Courts to Oversee Guardianships, but Jurisdictional Issues Complicate Oversight

State laws provide for court appointment and oversight of guardianships. Nearly all states require two kinds of reports: one regarding the personal status and well being of the incapacitated person and another regarding the accounting of the person’s finances. The personal status reports usually include information regarding the condition of the incapacitated person, although many states require more specific information regarding various aspects of the incapacitated person’s status. In many states, the laws require the report to include documentation of the need for continued guardianship. Many statutory requirements are very detailed and require a physician’s statement, a determination of the mental status of the incapacitated person, or in some instances, reports of any change in the condition of the incapacitated person. Other basic report elements may include living conditions, place of residence, and the number of guardian visits. Some states may allow courts to waive certain reporting requirements.

Most states require that guardians submit a financial accounting and record of expenditures for the care of the incapacitated person on an annual basis. This document may list the assets and income of the incapacitated person, including bank balances, real property holdings, and detailed expenses associated with the care and housing of the incapacitated person. State statutes usually require court approval for the sale of real estate by a guardian.

How often guardians are required to submit reports varies. Most states require guardians to submit personal status reports at least annually. Only the District of Columbia’s law requires submission at least semiannually. Statutory requirements for filing financial accountings range from annually to at least once every 3 years. (See fig. 2.) In states where accounting frequency requirements are left to the discretion of the courts, the minimum requirement is that an accounting be made upon resignation or removal of the guardian. In many states, there is an explicit requirement that court personnel take action when reports are not filed on time. In Texas, if a guardian of the person fails to file a report or a guardian of the estate fails to file an annual accounting, the guardianship appointment expires.

Some state statutes require an independent party or court personnel to determine the accuracy and validity of personal status and accounting reports. However, fewer than half of the states require courts to review the reports guardians have submitted to them. Other states leave it to the court to determine who reviews the reports. For example, Texas specifies that a statutory probate court must review filings as part of the annual determination of the continued need for a guardianship, but provides that courts of general jurisdiction may use any appropriate method determined by the court according to the court’s caseload and resources available” in order to assess the continued need for a guardianship.

Apart from requirements for review of the submitted reports, some states’ statutes require a periodic review of the guardianships to ensure that guardians are adequately fulfilling their responsibilities and there is a continuing need for the guardianship. In some states, an investigator will visit the incapacitated person to determine whether there is a continuing need for a guardianship or if the current guardian should be terminated and a new one appointed. For example, Alaska requires courts to evaluate incapacitated persons every 3 years. Some states hold a hearing to assess the continuing need for a guardianship. For example, Connecticut law requires a hearing every 3 years to determine if any changes need to be made to the guardianship appointment.

Many states’ laws authorize penalties that courts can impose to enforce guardianship responsibilities. These most frequently include termination of the guardianship appointment or imposition of fines for failure to fulfill responsibilities. Some states have statutes providing for the denial of guardianship fees while others authorize penalties against negligent or ineffective guardians, including charging the guardian with contempt of court, imprisonment, restitution for mismanagement of property, recovery of assets and surcharges, or loss of bond. Many other state statutes allow hearings at the court’s discretion or in response to a petition.

Some states are reluctant to recognize guardianships originating in other states, leading to jurisdictional complications. The 1998 Uniform Guardianship and Protective Procedures Act has been adopted into many states’ statutes. This act gives courts the power to exercise jurisdiction when an incapacitated person is moved or travels from one state to another. However, these provisions may not sufficiently address all complications that arise in guardianships for the elderly such as when more than one jurisdiction is asked to appoint a guardian for the same incapacitated person. For example, a guardian appointed in one state that attempts to sell an incapacitated person’s real property located in another state may need to travel to that state and petition a court there in order to establish authority to act on behalf of the incapacitated person. Interstate jurisdictional issues also arise when the guardian or the incapacitated person needs to move to another state. Issues may also occur in cases involving the physical removal of an incapacitated person from one jurisdiction to another in an effort to gain control over the incapacitated person.

Courts’ Procedures for Implementing State Laws Vary

While some state statutes specify minimal requirements for overseeing guardians, individual courts may set their own, sometimes more stringent, requirements and standards. The courts in the 3 states we surveyed (California, Florida, and New York) implemented their state laws through reporting and oversight procedures. (See app. III for a state-by-state compilation of survey results.)

Within the 3 states, court procedures varied for the submission and review of reports guardians are required to submit. Most courts responding to our survey require an initial inventory of assets, income, and liabilities, and courts in Florida and New York typically require annual financial statements or accountings. Most courts in Florida and New York require some or all guardians to submit a financial plan detailing how the guardian will manage the financial affairs of the incapacitated person. Most of the responding courts in California and Florida and all of the responding judicial districts in New York indicated they require some or all guardians to petition or inform the court if plans for the incapacitated person’s care change. Nearly all of the courts responding to our survey in each state indicated that judges, court personnel, or court examiners review guardians’ reports, and a few courts use volunteers.

In each state surveyed, when guardians receive pay for services, the pay varies. We asked courts about compensation approved in the last 12 months before responding to our survey. Most courts indicated that some guardian compensation was based on an hourly rate. In New York, rates typically ranged from $25 to $400 per hour, in California they ranged from $7 to $250 per hour, and in Florida they ranged from $8 to $85 per hour. In other cases, guardians’ compensation was based on the value of an elderly incapacitated person’s estate but, while most judicial districts in New York had allowed this, few courts in Florida and about one-quarter of the courts in California had. In each state, most courts responding to our survey required all guardians to submit time and expense records to support petitions for compensation, but other courts in each state only require these reports for some guardians.

In all 3 states, responding courts reported a variety of measures for guardianship oversight. Most California courts indicated that court personnel visit all or almost all the incapacitated people, and several responding Florida courts and two New York judicial districts indicated they had court personnel visit some or most of the incapacitated people. Most responding courts reported that they ask questions raised by guardians’ reports, send follow-up letters to conservators, or send notices or orders to appear in court when reports are late, incomplete, or inaccurate.

Most responding courts in each state indicated they had imposed some kinds of penalties when guardians failed to fulfill their responsibilities. The most commonly used measures included withholding or reducing guardianship compensation, terminating guardianship appointments, and contempt of court citations. Several courts indicated they had done one or more of these things more than 10 times during the past 3 years. A 1999 California State law established a statewide registry of private professional guardians and requires courts to notify the registry when a complaint against a guardian is valid. Only one court indicated it had yet notified the registry of a guardian’s resignation or removal for cause. Eleven responding courts in California and 9 in Florida indicated they had convicted guardians of a crime against the incapacitated person. In New York, 2 judicial districts had notified the state registry of a guardian’s resignation or removal for cause and 1 had convicted a guardian of a crime against an incapacitated person.

Most Courts Surveyed Do Not Track the Number of Active Guardianships

In each state surveyed, some information needed for effective oversight of guardianships, such as the number of people with guardians, was generally not available. In each of the 3 states, one-third or fewer of the responding courts tracked the number of all guardianships for adults that they were responsible for monitoring, and only a couple of courts in each state provided us with the number of these guardianships that were for incapacitated people aged 65 and older. (See table 2.) California courts report the number of probate and guardianship filings they handle each year, including guardianships, probate of decedents’ estates, and trusts— for a total of 50,786 filings in fiscal years 2001-2002. The state court administration does not, however, require a separate count of guardianship filings for adults or the elderly.

In 1999, amendments to California law established a statewide registry of private professional guardians, providing courts information about prospective guardians’ experience and a record of complaints and cases in which they have had a guardianship appointment terminated for cause. (The names of people on the registry are available to the public.) Florida also maintains a statewide registry of most professional guardians, but registration is not required of nonprofessional guardians. New York also maintains a list of private professional fiduciaries, including guardians. However, most of the courts responding to our survey in each state indicated that less than half of the guardians they appointed were on the state registry. Many of the guardians appointed are family members or friends of the incapacitated elderly person.

Most courts surveyed said they did not have sufficient funds for guardianship oversight. Often the courts handling guardianship matters handle several kinds of cases. In each state, one-fifth or fewer of the judges who hear guardianship cases in the responding courts spend a majority of their time on them. Judges who spend little of their time on guardianship cases tend to focus on each case as it comes up on their calendar and find it difficult to devote the time and resources needed to develop an effective guardianship program, according to some officials at courts recognized as exemplary, but others disagreed saying that general jurisdiction courts can also provide good oversight of guardians. In Florida, about one-fifth of the judges in courts responding to our survey spend the majority of their time on guardianship cases. While in California and New York 17 percent and 12 percent of judges, respectively, spend a majority of their time on these cases.

Courts Recognized as Exemplary Focus on Training and Monitoring

Each of the four courts recognized as exemplary went well beyond minimum state requirements for guardianship training and oversight. Each court provides training of guardians, even though training is only required in one of the state’s statutes. (See table 3.) The courts also actively utilize computerized case management, court visitor programs, in-depth review of annual reports, or investigations by court employees to oversee guardianship cases. Two court officials told us that specialization allows courts to focus on issues specific to guardianships and try new strategies to improve the court’s oversight of guardians.

Courts Recognized as Exemplary Provide Training and Sources of Information Resources for Guardians

The courts recognized as exemplary provide training and/or information resources for guardians. (See table 4.) Of the 4 states in which the courts recognized as exemplary are located, only Florida requires guardians to receive training, but Broward County provides training beyond what is required in state law for nonprofessional guardians and provides supplemental reference materials, such as a software program for preparing guardianship reports. The courts in San Francisco and Tarrant County, Texas, also provide independently developed training for guardians. For example, as of January 2004, the San Francisco court required professional and nonprofessional guardians alike to complete formal classroom training. Working in partnership with a group of professional guardians, the court developed a required half-day training course that nonprofessional guardians must complete within 6 months of their appointment.

Courts Recognized as Exemplary Actively Oversee Guardianships

Each of the exemplary courts uses at least one means to actively oversee guardianships, and while each will penalize guardians who fail to fulfill their responsibilities, two courts dedicate extra resources to enforcement activities. These two, Rockingham County and Tarrant County, oversee guardianship cases through computerized case management systems. The system in Rockingham County automatically notifies court staff when reports are due for each guardianship case. For example, when a guardianship of the estate is established, the system prints a notice to the guardian that an inventory of the incapacitated person’s assets must be submitted to the court within 90 days. If the court has not received the inventory, the system notifies court staff that an inventory default notice is needed. This system also tracks the number of new guardianship cases and the total number of active cases. Similarly, Tarrant County enters information about each new guardianship case into a database. Each month the court generates a list of annual reports that are due and mails the guardians the required report form. The court also enters the date the report is received into the database.

Two of the courts have developed procedures for in-depth review of guardians’ reports. In Florida, the state statute requires that the clerk of the court review each guardianship report to ensure that it contains the appropriate information. Broward County has implemented a three-tiered sampling system for reviewing the reports from the substantial caseload of approximately 5,000 guardianships. All reports are subject to the first level of review, which is conducted by the Audit Division of the Clerk of the Court’s office. A further sample of reports is selected, and the Audit Division conducts a more intensive second level review. At the third level of review, a further sample of reports is selected, and the audit division conducts detailed in-house and field audits of supporting documentation to verify the information in the reports. If these reviews indicate any irregularities, the Audit Division sends a memorandum to the judge to review the report and the auditor’s findings. Tarrant County also employs an auditor who is responsible for monitoring guardianships of the estate. The auditor uses a database to track when guardians’ reports are due. Twice a month, the auditor checks this database to ensure that no reports are overdue or overlooked.

As shown in table 5, each court recognized as exemplary uses a visitor program to support guardianship oversight. Tarrant County is required by state law to have court visitors monitor the status of people under guardianship, so the court provides visitation internships to social work students who work as court visitors. A licensed Master Social Worker on the court staff acts as program manager and trains and supervises the interns. The students receive course credit, and the program is of little cost to the court. There are typically 4 or 5 interns making an average of 60-70 visits each month. The visitors submit a report of the visit to the program manager for review, and the judge reviews these reports to guide his or her decision on whether to continue the guardianship for an additional year.

Rockingham County recruits volunteers from AARP to serve as either visitors or researchers. Researchers prepare files for the court with contact information, case background, and the last annual guardian’s report. The visitors then contact the guardian and arrange to visit the incapacitated person. They assess the ward’s living situation, finances, health, and social activities, and recommend follow-up actions to the court. A court employee serves as the volunteer coordinator. According to the volunteer coordinator in Rockingham County, costs are minimal because volunteers use court telephones, and the state provides supplies. According to the court, the detailed, first-hand information provided about the incapacitated person’s environment and condition helps the court make better decisions when the case is reviewed.

When guardians fail to fulfill their responsibilities, the courts have legal authority to penalize guardians, and two of the courts recognized as exemplary have staff dedicated to investigating these types of cases. Broward County employs court monitors to investigate abuse allegations involving guardians, or problems discovered due to annual background checks, report review, or other tips. A study of statewide guardianship monitoring practices found that Broward County conducts about 400 field investigations a year, some of which have resulted in referrals to the state attorney for prosecution.

State Courts and Federal Representative Payee Programs Serve Many of the Same Incapacitated Elderly People, but Collaborate Little in Oversight Efforts

Federal agencies and state courts’ representative payee programs collaborate little to protect incapacitated people and prevent misuse of federal benefits. Although overlap is known to occur among the incapacitated populations they serve, the extent of this overlap is not known. Some state courts and federal agencies share certain information on a case-by-case basis. However, the absence of a systematic means for compiling and exchanging pertinent information may leave many incapacitated people at risk and result in the misuse of benefits and increased federal expense. State courts and federal agencies lack consistent and sustained compilations of data needed to assess options for improving oversight of guardians and representative payees.

Beneficiary Populations Overlap, but Coordination Is on a Case-by-Case Basis

The incapacitated populations served by state courts and federal agencies overlap to some extent. Because we focused on incapacitated elderly people, we did not assess overlaps between agencies’ general beneficiary populations. (See table 6.) An estimated 95 percent of all people 65 and older are SSA recipients, and elderly recipients of OPM or VA benefits often also receive SSA payments. An estimated 96 percent of VA beneficiaries aged 65 and older are also SSA recipients and about 9 percent are OPM beneficiaries. Also, an estimated 82 percent of OPM elderly beneficiaries are also SSA beneficiaries. While there are no data on the number of beneficiaries who are incapacitated in each category, it is likely that a number of incapacitated people are beneficiaries from more than one federal agency, and a number could also have court-appointed guardians.

Like many courts that oversee guardianship programs, federal agencies collect certain information from representative payees. SSA annually sends each representative payee (whether a court-appointed guardian or not) a two-page report form asking for certain information—-for example, whether the representative payee was convicted of a felony, whether the beneficiary continued to live in the same circumstances, how much of the benefit payments were spent on the beneficiary’s behalf, how much was saved, and in what kind of account the funds are held. Similarly, OPM biennially sends its representative payees a brief survey asking for similar information, though those who are court-appointed guardians are not required to complete the survey. OPM leaves it to the courts to monitor these payees. VA also requires its representative payees to submit a two- page accounting report, but asks payees who are court-appointed guardians to submit the same accountings that they submit to the court. Each agency sends follow-up mailings, and SSA and VA visit payees as needed in cases where payees fail to submit a report. In addition, VA sends field examiners to visit each incapacitated beneficiary. Agency officials indicated that these efforts often help identify cases in which beneficiaries or representative payees have moved or cases where a payee may need to be replaced for a variety of reasons. For example, they may no longer be living close enough to the beneficiary or they themselves have become unable to handle the benefit payments. Typically, however, cases of abuse come to the agencies’ attention by way of tips from individuals who know of the beneficiary rather than from report and survey follow-up efforts.

Some state courts and federal agencies share certain information about some beneficiaries on a case-by-case basis. Some state court officials that we spoke with indicated that they have established a rapport with staff in local offices of federal agencies, such as SSA and VA, and are able to obtain information concerning incapacitated beneficiaries or their representative payees. (See table 7.) For example, upon request, federal agencies will sometimes provide them with information to allow the court to determine all sources of the incapacitated person’s income and whether the guardian needs to coordinate with a payee. State courts may also offer information to federal agencies. For example, some courts send occasional notices of guardianship appointment to SSA, allowing SSA staff to identify which of their beneficiaries is incapacitated and determine if the guardian can be designated as a representative payee.

While coordination is often case-by-case, some takes place more systematically and is based on previously established agreements. For example, about one-third of the states have adopted the Uniform Veterans’ Guardianship Act that requires state courts to notify VA when they appoint a guardian for a veteran. According to this act, VA must receive copies of court orders and accountings related to the veteran’s case. The act also gives VA the right to appear in court during guardianship proceedings involving a veteran.

Federal agencies may also establish agreements with one another to exchange information. For example, SSA allows a limited number of VA service representatives nationwide to electronically access some SSA information about veterans’ SSA benefits. This SSA data system includes the amount of SSA benefits veterans receive, whether SSA has identified them as incapacitated, and the identity of a representative payee, if one has been designated. VA officials regularly look at SSA’s information before conducting a field examination to help determine incapacity and choose a fiduciary, according to a VA official responsible for managing the agency’s fiduciary program. VA is not, however, notified when SSA changes a beneficiary’s representative payee. Many VA representative payee program staff that do not currently have access to the database see it as a useful tool and have expressed a desire to be able to use it in order to more efficiently assess beneficiaries’ needs.

Lack of Systematic Coordination Weakens Oversight of Incapacitated People

The lack of systematic coordination weakens the oversight of both elderly and non-elderly incapacitated people and may leave incapacitated people at risk of not being assigned a representative payee or guardian despite having been identified either by a state or federal entity as a person who needs one. For example, if a federal agency has identified one of its beneficiaries as incapacitated and assigns a representative payee, the agency does not systematically notify the courts or other agencies. (See table 7.) The other agencies making payments to the same person may not learn that they may need to assign a representative payee to handle their benefit payments to the person. Such notification could also be useful to state courts in assessing the need for a guardian. This lack of coordination could leave the incapacitated person who needs a representative payee or guardian without one.

Insufficient interagency coordination may also leave incapacitated elderly people more vulnerable to abuse or neglect. For example, when an agency identifies a representative payee who is abusing or neglecting an incapacitated person, it does not automatically notify the state court or other federal agencies that have assigned a guardian or representative payee. Without such a notification, the court or other federal agency may be unaware of the need to replace an abusive or negligent guardian or representative payee.

If agencies and courts do not communicate with each other concerning incapacitated beneficiaries, they may unknowingly assign different people as representative payees or guardians with overlapping responsibilities. However, in some cases, agencies and courts intentionally select different people or organizations as representative payee or guardian. Although most Old Age, Survivor, and Disability Insurance beneficiaries with both a guardian and SSA-designated representative payee, have the same person serving in both roles, for an estimated 19 percent of these beneficiaries the guardian is not their representative payee. Some guardians choose not to be the representative payee, so SSA designates someone else. (See fig. 3.) Sometimes VA designates a nursing home as a representative payee, even though a court has appointed a family member or other person to be the incapacitated resident’s guardian. The guardian and the nursing home may get into conflict over the use of the incapacitated person’s benefit payments. Additional coordination among federal agencies and courts and cooperation among guardians and representative payees may be necessary to avoid conflicts and better protect the incapacitated person.

Federal officials have recognized the need for better exchange of information regarding incapacitated beneficiaries. In response to provisions in the Omnibus Budget Reconciliation Act of 1990, SSA and VA studied the feasibility of collaborating in serving veterans who were also SSA beneficiaries. In 1993, several agencies participated in a discussion group on representative payee programs. Two of the agencies—SSA and VA—signed an agreement calling for each agency to notify the other when it had information that could be helpful to the other agency’s oversight of its representative payee. However, according to VA and SSA officials, efforts to implement the agreement failed due to changes in management personnel, concerns about costs, and issues concerning nondisclosure of confidential information.

Not only is it likely that the lack of coordination limits the protection of incapacitated people and their federal benefits, it may also result in increased federal expenditures. The recently enacted Social Security Protection Act of 2004 requires SSA to repay the benefits in certain cases of misuse. For example, if a representative payee that is an organization, or an individual serving 15 or more beneficiaries misuses the benefit payments, SSA will have to reissue the misused benefits to the beneficiaries or to an alternate representative payee, resulting in increased federal expenditures. Before the passage of this act, SSA was only required to replace benefits if SSA was negligent in its oversight of a representative payee. Annually, SSA has found fewer than 1,000 cases of misuse, and only in a small percentage of those cases was SSA found to be negligent. However, according to an SSA official, the new provisions may mean that more benefits will have to be reissued.

Statistical Data to Analyze Options for Improving Oversight Not Available

Certain data, such as the number of active guardianships and incidence of abuse, could help courts and agencies determine the effectiveness of efforts to protect incapacitated people but are not currently available. The courts we surveyed generally do not compile aggregate data such as the number of incapacitated people, or elderly incapacitated people, with guardians. Often the only records concerning guardianship appointments aside from a calendar of upcoming hearings and due dates for required reports are in individual paper files. Some states, however, are making efforts to compile statewide data on guardianships. In Vermont, for example, the Supreme Court compiles reports from each court on the number of open guardianship cases, but without any information on the age of the incapacitated people. In New York, the state court’s Guardian and Fiduciary Services is working on the development of a statewide database on guardians, fiduciaries, and the people they were appointed to serve.

The federal agencies that we examined, SSA, VA, and OPM, do more to compile data on representative payees than most courts responding to our 3-state survey do for incapacitated people with guardians. All three of the federal agencies that we examined have databases that keep count of the different types of representative payees for incapacitated people. Neither SSA nor VA, however, consistently compiles information showing how many beneficiaries with representative payees have a court-appointed guardian who is not the representative payee.

To keep these databases current, all three agencies require most of their representative payees to submit periodic reports. SSA, VA, and OPM compile and maintain basic information, such as contact information, about the representative payees they designate. They also ask whether an incapacitated beneficiary has a court-appointed guardian before designating a representative payee. They do not, however, compile and maintain more detailed information that could contribute to more effective oversight of representative payees. For example, none of these agencies consistently records information about a beneficiary’s court-appointed guardian in its computerized records system or updates the information unless the agency also designates the court-appointed guardian as its beneficiary’s representative payee. Although SSA compiles some information about the reasons it replaces representative payees, such as the assignment of a more suitable payee, misuse of benefits, or fraud, for example—OPM and VA do not. This information might be useful in making future assignments.

Sufficient data are not available to determine the incidence of abuse of incapacitated people by guardians or representative payees, nor the extent to which guardians and representative payees are protecting incapacitated people from abuse. Current efforts to compile aggregate national data on elder abuse do not identify cases when a guardian or representative payee has been assigned to the victim of abuse, or whether a guardian or representative payee commits the abuse. States compile statistics on incidence of abuse and neglect, including information on the age of victims. National associations collect these statistics from Adult Protective Service agencies and Area Agencies on Aging. Generally, states track types of abuse and some of the relationships between perpetrators and victims, but they do not track instances where the victim had been assigned a guardian or representative payee or had granted a power of attorney to someone. As a result, federal agencies lack national data concerning the incidence of elder abuse by guardians and representative payees or the incidence of abuse with and without the assignment of a guardian or representative payee. Similarly, national crime statistics, such as crime victimization surveys, identify various relationships between victims and perpetrators, and the age of victims, but fail to identify cases involving guardians or representative payees. SSA tracks the number of cases in which representative payees are found to have misused benefits— fewer than a 1,000 cases each year for beneficiaries of all ages. SSA officials agreed, however, that since SSA largely relies on tips from third parties to discover cases of misuse, their records of misuse might be incomplete.

Conclusions

Although state and local courts have primary responsibility for protecting incapacitated people, including the elderly, by appointing and overseeing guardians, federal agencies also have responsibilities to help protect many of the same incapacitated people through representative payee programs. Yet, courts and federal agencies collaborate little in the protection of incapacitated elderly people and the protection of federal benefit payments from misuse. Court and agency efforts to improve protection of the incapacitated is limited by their failure to systematically compile and exchange data—by, for example, promptly notifying each other when an incapacitated person is identified or a representative payee or guardian is appointed or needs to be replaced, due to their failure to fulfill their responsibilities, or for other reasons. However, the extent to which the courts and agencies leave elderly incapacitated people at risk is unknown. Neither the states nor the federal government compile data concerning the incidence of abuse of people assigned a guardian or representative payee or even the number of elderly people with guardians. Without better statistical data concerning the size of the incapacitated population or how effectively it is being served, it will be difficult to determine precisely what kinds of efforts may be appropriate to better protect incapacitated elderly people from exploitation, abuse, and neglect.

Improvements in oversight of guardians and representative payees depend in part on additional efforts by states, state and local courts, federal agencies, state area agencies on aging, and HHS. Although the focus of our review was elderly incapacitated people, state guardianship and federal representative payee programs also serve other incapacitated adults. Improvements could be of benefit to all incapacitated adults, particularly if they are designed with both the elderly and non-elderly in mind. However, certain actions that would improve oversight are not currently being undertaken. For example, the various entities responsible for oversight do not collaborate to compile, on a continuing basis, consistent national data concerning guardianships and representative payees. Without such statistical data, the extent of preventable abuse and neglect of incapacitated elderly people is unknown. Finally, the states have done little to collaborate on interstate recognition and transfer of guardianship appointments. Few states have adopted procedures for accepting transfer of guardianship from another state or recognizing some or all of the powers of a guardian appointed in another state. This can be a problem when an incapacitated elderly person needs to move to another state or the guardian needs to conduct business in another state on his or her behalf. The need to establish a new guardianship in another state because of these gaps in states’ law can make it difficult for guardians and the courts that supervise them to ensure that they fulfill their responsibilities.

The prospect of increasing numbers of incapacitated elderly people in the year’s ahead signals the need to reassess the way in which state and local courts and federal agencies work together in efforts to protect incapacitated elderly people.

Recommendations

To increase the ability of representative payee programs to protect federal benefit payments from misuse, SSA should convene an interagency study group that includes representatives from HHS, federal agencies with representative payee programs, including VA and OPM, and state courts that wish to participate in order to study the costs and benefits of options for improving interagency cooperation and federal-state cooperation in the protection of incapacitated elderly and non-elderly people. Options may include: prompt and systematic sharing among federal agencies’ representative payee programs of information such as the identity of individuals who are incapacitated, the identity of those individuals’ designated guardians and representative payees, the identity of guardians and representative payees who fail to fulfill their duties, and the assignment of successor guardians and successor representative payees; and prompt and systematic sharing of similar information among federal agencies and courts responsible for guardianships that choose to participate.

Information-sharing initiatives must be designed in a manner that is cost- effective, respectful of privacy rights, and consistent with federal nondisclosure requirements concerning confidential information.

To facilitate state efforts to improve oversight of guardianships and to aid guardians in the fulfillment of their responsibilities, the Department of Health and Human Services should work with national organizations involved in guardianship programs, such as the those represented on the National Guardianship Network, to provide support and leadership to the states for cost-effective pilot and demonstration projects to: develop cost-effective approaches for compiling, on a continuing basis, consistent national data concerning guardianships to aid in the management of programs for protecting incapacitated adults, such as the age of the incapacitated person, the type of guardian appointed, etc; study options for compiling data from federal agencies and state agencies, such as Adult Protective Services agencies, concerning the incidence of elder abuse in cases in which the victim had granted someone the durable power of attorney or had been assigned a fiduciary, such as a guardian or representative payee, and in cases in which the victim did not have a fiduciary; and review state policies and procedures concerning interstate transfer and recognition of guardianship appointments to facilitate efficient and cost-effective solutions for interstate jurisdictional issues.

Agency Comments

We provided a draft of this report to SSA, OPM, VA, and HHS and received written comments on the draft from all four. See appendixes IV, V, VI, and VII for their responses.

SSA disagreed with our recommendation concerning an interagency study group. It views the study we recommend as something beyond its purview. Although SSA shares concern about incapacitated people’s general welfare, it stated that its responsibility focuses on ensuring that any SSA benefits incapacitated people receive are used for their maintenance and welfare. SSA stated that systematic sharing of information among federal agencies and state courts would be extremely difficult and a study group focusing on such sharing would not be within SSA’s purview. SSA also commented that efforts to coordinate with state courts must meet Privacy Act requirements, and in that regard they noted that there is currently no statement of routine use allowing SSA to share representative payee information with state courts. Because state courts, SSA, and other federal agencies have such different policies regarding representative payees and guardians, SSA believes that it is constrained by the Privacy Act in releasing information.

We believe that the systematic exchange of data could help SSA better ensure that SSA benefits are used for incapacitated people’s maintenance and welfare. The interagency study group should be able to develop policies allowing for the sharing of information consistent with the Privacy Act and other applicable nondisclosure requirements. We believe that an interagency study group could identify carefully specified kinds of information that under specified circumstances could be shared among limited numbers of federal and state court officials with jurisdiction over guardianships in a manner that is consistent with the Privacy Act and other applicable nondisclosure requirements. SSA and the other federal agencies involved have the authority to develop statements of routine use to provide for such exchange of information. They currently have such agreements in place to share data with other federal agencies, such as SSA’s sharing of information concerning its representative payees with a limited number of VA staff. Although exchange of data among federal agencies with representative payee programs may be easier to establish than exchange between federal agencies and state courts, further study is warranted to assess the feasibility of such exchange and the extent to which it could enable courts and federal agencies to better protect incapacitated elderly people.

VA and OPM agreed with our conclusions pertaining to their agencies, indicating that they look forward to participating in the study group we are recommending. VA noted wide variations in state guardianship laws and procedures, the need for federal agencies and state courts to share information on cases of common interest, and the current lack of systematic information sharing among federal agencies state agencies, and state courts relating to the protection of elderly beneficiaries. OPM suggested that we assert that it would be to the federal government’s benefit, either in terms of efficiency or savings, to create systems for sharing information on guardians or representative payees. OPM also urged that we add to the report statistics demonstrating the efficiency of coordination with state courts. Although adding these would strengthen the report, data necessary to do so are not currently available. Our findings strongly suggest that savings and greater efficiency would result from collaboration, but the extent to which this is the case will not be known until agencies and state courts start collaborating in efforts to assess overlaps in the populations of incapacitated people they serve, incidence of abuse, and the costs and benefits of data exchange.

HHS agreed that guardians should be adequately trained and monitored, and that governmental agencies and courts should coordinate their efforts and share information concerning guardians and representative payees. HHS plans to carry out our recommendation to study options for compiling data from federal agencies and state agencies concerning the incidence of elder abuse in cases in which the victim had granted someone the durable power of attorney or had been assigned a fiduciary, such as a guardian or representative payee. This year the National Center on Elder Abuse will survey all state adult protective services agencies to determine the incidence of elder abuse reports and the characteristics of victims and perpetrators. The center plans to ask states to cite the number or percentage of perpetrators of elder abuse who served as the victims’ powers of attorney, guardians, or representative payees. HHS also plans to explore cost-effective pilot and demonstration projects to develop approaches for compiling guardianship data and to facilitate solutions for interstate jurisdictional issues. It also agreed to serve on an interagency study group to develop options for improving interagency cooperation and federal-state cooperation in the protection of incapacitated elderly and non-elderly people.

As agreed with your office, unless you publicly announce its contents or authorize its release sooner, we will not distribute it until 30 days from the date of issuance. At that time, we will send copies of this report to the Commissioner of Social Security, the Director of the Office of Personnel Management, the Secretary of Health and Human Services, and the Secretary of Veterans Affairs. We will also make copies available to others on request. In addition, the report will be available at no charge on GAO’s Web site at http://www.gao.gov/.

If you have any questions concerning this report, please contact Barbara Bovbjerg or Alicia Puente Cackley at (202) 512-7215. See appendix VIII for other contacts and staff acknowledgments.

Appendix I: Scope and Methodology

Our review included a review of state laws on guardianship, the development and administration of surveys of state courts in 3 states, visits to 15 courts in 8 states, and interviews with federal officials at the Social Security Administration (SSA), Department of Veterans Affairs (VA), Office of Personnel Management (OPM), and the Department of Health and Human Services (HHS). In addition, one member of the team completed a 2-day training program for professional guardians in Washington State and two attended a conference of the National Guardianship Association. We conducted our review between March 2003 and May 2004 in accord with generally accepted government auditing standards.

To determine what state courts do to ensure that guardians fulfill their responsibilities, we studied both states’ laws concerning guardianship and court practices, particularly those concerning court oversight of guardians. Our review of states’ laws relied in part on the compilations prepared by the American Bar Association Commission on Law and Aging. To review court practices we limited our scope to courts with jurisdiction over guardianships for the elderly in the three states with the largest elderly populations (residents aged 65 and older)—California, New York, and Florida. Together these three states account for about one-quarter of the nation’s elderly population. We administered similar survey instruments tailored to the courts in each of these states. We refined the survey instruments based on pretest visits to court officials at three counties in California, three counties in Florida, and two counties in New York. We sent finalized survey instruments to California Superior Courts in each of California’s 58 counties, to circuit courts in each of Florida’s 67 counties, and to each of New York’s 12 judicial districts. We received usable survey responses from 42 California courts, 55 Florida courts, and 9 of New York’s judicial districts for response rates of 72 percent, 82 percent, and 75 percent, respectively. Several courts provided responses to some items, but no responses to other items in the survey instrument. For details on the numbers of responses to each item and a compilation of responses by state, see appendix III. We reviewed courts’ survey responses for consistency, but did not independently review the accuracy of the court officials’ responses.

To determine what guardianship programs recognized as exemplary do to ensure that guardians fulfill their responsibilities we visited 4 courts to study their procedures. We selected the four courts by contacting members of the National Guardianship Network and asking them which courts throughout the nation they regard as having exemplary practices. The four courts we selected were each identified as exemplary by two or more members of the network. We visited each of the courts and interviewed judges, probate directors, monitoring staff, volunteers, legal staff, and others. In two of the courts, we attended guardianship hearings. We reviewed each of the court’s documents concerning probate procedures including state laws, rules of court, training materials, forms, and written and Web site documents. We also examined examples of guardianship case files.

To determine to what extent do state courts and federal agencies coordinate their efforts to protect incapacitated elderly people, we interviewed court officials in each of the four courts recognized as exemplary and in several additional courts. We attended the National Guardianship Association’s conference including sessions concerning guardianships and VA and guardianships and the Healthcare Insurance Portability and Privacy Act of 1996. We met with a group of conference attendees, including judges, probate lawyers, and guardians, to discuss federal agencies’ interactions with guardians and courts. We also reviewed documents provided by court officials concerning specific cases in which federal agencies were involved in guardianship cases. We also interviewed officials at SSA, VA, OPM, and HHS and reviewed applicable regulations and policy manuals and handbooks.

Appendix II: GAO Surveys of Courts in California, Florida, and New York

The following are surveys GAO mailed to the California Superior Court in each of the 58 counties in California, the Florida Circuit Courts in each of the 67 counties in Florida, and the 12 Judicial Districts in New York. For summary results of the survey, see appendix III.

Appendix III: Results from GAO Surveys of Courts in California, Florida, and New York

Below are tabulations of survey responses received from 42 of the 58 superior courts in California, 55 of the 67 superior courts in Florida, and 9 of the12 judicial districts in New York. In some cases, respondents to the survey did not respond to particular items in the survey.

Which of the following resources are available to guardians appointed by your court? (Check one for each resource.)

A. Summary of statutory duties of guardians B. List of resources and contacts for guardians (e.g., Area Agencies on Aging, county/state support agencies, etc.)

E. Guardian handbook or manual G. Examples of model reports H. Other (please specify)

Does your court require formal training (e.g., classes, videos, instructional meetings) for any of the following types of guardians? (Check one for each row.)

A. Guardians who are family members or friends C. Guardians (not family members, friends or attorneys) who are paid from public sources (e.g., social service agencies, etc.)

D. Guardians (not family members, friends or attorneys) who are paid from the income or assets of the incapacitated person (e.g., non-attorneys on the state registry)

Does your court require guardians of the property to submit documentation of the following items, either separately or as part of a report? (Check one for each item.)

Does your court require guardians of the person to submit documentation of the following items, either separately or as part of a report? (Check one for each item.)

How sufficient is your court’s funding for monitoring guardianships? (Check one.)

Do courts in your county require that guardians of the property be bonded? (Check one.)

Do courts in your county require background checks on guardians of the property? (Check one.)

Do courts in your county require background checks on guardians of the person? (Check one.)

Other than relying on reports by guardians, which, if any, of the following strategies does your court use after the initial hearing to assess the personal status of people who have guardians appointed by the court? (Check one for each strategy.)

Who reviews financial and personal status reports submitted by guardians appointed by your court? (Check one for each type of reviewer.)

B. Court personnel other than judges D. Government agencies other than the court E. Other (please specify)

B. Court personnel other than judges D. Government agencies other than the court E. Other (please specify)

B. Court personnel other than judges C. Court examiner or other compensated person appointed to review reports E. Government agencies other than the court F. Other (please specify)

What steps, if any, are taken to verify information in financial and personal status reports? (Check one for each step.)

A. Information in personal status reports is verified.

B. Information in financial reports is verified.

C. Supporting documentation for financial information must be submitted (e.g., bank/brokerage statements).

D. Other (please specify)

A. Information in personal status reports is verified.

B. Information in financial reports is verified.

C. Supporting documentation for financial information must be submitted (e.g., bank/brokerage statements).

D. Other (please specify)

A. Information in personal status reports is verified.

B. Information in financial reports is verified.

C. Supporting documentation for financial information must be submitted (e.g., bank/brokerage statements).

D. Other (please specify)

Is your court required to document approval of financial and personal status reports? (Check one.)

Does your court use a computer(s) to track when financial and/or personal status reports are due and when they are filed? (Check one.)

About how many of the required guardianship reports for the elderly are filed on time? (Check one.)

In the last 12 months, has your court approved any guardian compensation that was based on a percentage of the value of an elderly incapacitated person’s estate? (Check one.)

If “Yes,” what is the range of percentages typically approved?

In the last 12 months, has your court approved any guardian compensation that was based on a percentage of an elderly incapacitated person’s income? (Check one.)

If “Yes,” what is the range of percentages typically approved?

In the last 12 months, has your court approved any guardian compensation based on an hourly rate? (Check one.)

If “Yes,” what is the range of hourly rates typically approved?

How does your court handle petitions from guardians for compensation? (Check one for each row.)

C. Guardians are required to submit time and expense records to support their compensation petitions.

D. Petitions are approved by court personnel or judge unless a problem surfaces.

E. Final approval is required by circuit or state office.

How many judges in your court hear guardianship petitions for the elderly? (Enter number.)

Of the judges in your court who hear guardianship petitions for the elderly, how many work more than half the time on guardianship matters? (Enter number less than or equal to that given in Question 20.)

How frequently is the elderly respondent (aged 65 and over) to a guardianship petition present at the appointment hearing? (Check one.)

Does your court keep counts of the number of people, elderly and non- elderly, who have guardians appointed by the court? (Check one.)

Currently, how many people, elderly and non-elderly, have active or continuing guardians appointed by your court? (Please provide actual numbers, if possible. If they are not available, check the box under “Information is not available.”)

Does your court keep counts of the number of people with active or continuing guardians appointed by your court who are elderly (aged 65 and over)? (Check one.)

If “Yes,” currently, how many elderly have guardians?

Currently, about what percentage of the people with guardians appointed by your court are elderly (aged 65 and over)? (Check one.)

In the last 12 months, about what percentage of petitions for guardianship of elderly people resulted in the appointment of a guardian? (Check one.)

Does your court keep counts of the types of guardians (e.g., family members, attorneys, or other guardians who receive payment from either public sources or the income and assets of the incapacitated person) appointed for elderly persons?

How frequently does your court appoint each of the following types of guardians for elderly persons? (Check one for each type.)

A. Guardians who are family members or friends C. Guardians, other than family members, friends, or attorneys, who receive payment for services from public sources (e.g., social service agencies, etc.)

D. Guardians, other than family members, friends, or attorneys, who receive payment for services from the income or assets of the incapacitated person A. Guardians who are family members or friends C. Guardians, other than family members, friends, or attorneys, who receive payment for services from public sources (e.g., social service agencies, etc.)

D. Guardians, other than family members, friends, or attorneys, who receive payment for services from the income or assets of the incapacitated person A. Guardians who are family members or friends C. Guardians, other than family members, friends, or attorneys, who receive payment for services from public sources (e.g., social service agencies, etc.)

About what percentage of the guardians appointed by your court are on the state registry? (Check one.)

In the last 12 months, which actions has your court taken to enforce requirements for guardians for the elderly? (Check one for each action.)

Over the last 3 years, about how often has your court imposed the following penalties on guardians for the elderly for failure to fulfill their responsibilities? (Check one estimate for each penalty.)

Appendix IV: Comments from the Office of Personnel Management

Appendix V: Comments from the Department of Veterans Affairs

Appendix VI: Comments from the Department of Health and Human Services

Appendix VII: Comments from the Social Security Administration

Appendix VIII: GAO Contacts and Staff Acknowledgments

GAO Contacts

Staff Acknowledgments

Carolyn M. Boyce, Nicole E. Gore, Jill M. Johnson, Corinna A. Nicolaou, Daniel A. Schwimer, Derald Seid, and John E. Trubey also contributed to this report.