BILL ANALYSIS Ó
AB 1288
Page 1
Date of Hearing: May 10, 2011
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 1288 (Gordon) - As Amended: May 4, 2011
As Proposed to be Amended
SUBJECT : PUBLIC GUARDIANS: TRUSTS
KEY ISSUE : SHOULD THE PUBLIC GUARDIAN, PRIOR TO APPOINTMENT AS
A GUARDIAN OR CONSERVATOR, BE ABLE TO PROTECT FROM FINANCIAL
ABUSE PROPERTY OF THE PROPOSED WARD OR CONSEVATEE HELD IN TRUST?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill increases the power of the public guardian and public
conservator (Public Guardian) to protect the property of a
proposed ward or conservatee that is subject to loss, injury,
waste, or misappropriation. Currently, a Public Guardian can be
appointed for someone who requires a guardian or conservator if
no one else is available who is qualified and willing to act.
In order to prevent ongoing financial abuse, prior to
appointment the Public Guardian can take control of property of
the proposed ward or conservatee for up to 15 days, if the
property is subject to misuse. This bill extends that time
period to 30 days and allows the Public Guardian to also take
control of property help in trust, if specified conditions are
satisfied. The author states that these changes are necessary
to protect vulnerable individuals from ongoing financial abuse.
This bill is sponsored by San Mateo and Santa Clara Counties and
supported by, among others, the Alzheimer's Association, the
California State Association of Counties, and the County Welfare
Directors Association. There is no known opposition to this
bill.
SUMMARY : Provides new powers to the Public Guardian to protect
the property of a proposed ward or conservatee from loss,
injury, waste or misappropriation. Specifically, this bill :
1)Increases the time, from 15 to 30 days, that a written
certificate issued by the Public Guardian to take control of
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real or personal property of a proposed ward or conservator is
effective.
2)Allows a Public Guardian, if he or she determines that the
requirements for appointment are satisfied and intends to
apply to the court for appointment as a conservator or
guardian, to restrain any person from transferring,
encumbering, or disposing of real or personal property held in
trust if all of the following requirements are met:
a) The property held in trust is subject to loss, injury,
waste or misappropriation;
b) The proposed ward or conservatee is the settlor of the
trust;
c) The proposed ward or conservatee has a current right to
receive income or principal from the trust; and
d) The proposed ward or conservatee has the power to revoke
the trust.
3)Allows any settlor, trustee or beneficiary of a trust to
petition a court for relief from any action taken by the
Public Guardian under #2 above.
4)Establishes a written certificate of authority that the Public
Guardian may issue, which is effective for 30 days after
issuance and authorizes the Public Guardian to restrain any
person from transferring, encumbering or disposing of property
held in a trust. Allows the Public Guardian to record a copy
of the certificate in any county where real property held in
the trust is located. Provides that a financial institution
or other person provided with the written certificate may rely
on that certificate, and fully discharges the institution or
person from any liability for any act or omission of the
Public Guardian with respect to the property.
EXISTING LAW :
1)Allows the court to appoint a guardian of the person, estate
or both, taking into consideration the best interest of the
proposed ward. (Probate Code Section 1500 et seq. Unless
otherwise stated, all further references are to that code.)
2)Allows the court to appoint a conservator to act on behalf of
a person who is unable to adequately provide for his or her
personal needs or incapable of managing his or her property or
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other financial assets. (Section 1800 et seq.)
3)Allows the Public Guardian to be appointed for any person who
requires a guardian or conservator and there is no one else
who is qualified and willing to act. (Section 2900.)
4)Allows a Public Guardian, if he or she determines that the
requirements for appointment are satisfied and intends to
apply to the court for appointment as a conservator or
guardian, to take possession or control of real or personal
property that is subject to loss, injury, waste or
misappropriation. Allows the Public Guardian to issue a
written certification of that fact that is effective for 15
days after issuance. Allows the Public Guardian to record a
copy of the certificate in any county where real property held
in the trust is located. Provides that a financial
institution or other person provided with the written
certificate may rely on that certificate, and fully discharges
the institution or person from any liability for any act or
omission of the Public Guardian with respect to the property.
(Section 2901.)
COMMENTS : This bill increases the power of the Public Guardian
to protect the property of proposed wards and conservatees.
Under existing law, a Public Guardian can be appointed for
someone who requires a guardian or conservator if no one else is
available who is qualified and willing to act. In order to
prevent ongoing financial abuse, prior to appointment, the
Public Guardian can take control of property of the proposed
ward or conservatee, for up to 15 days after issuance of a
Certificate of Authority, if the property is subject to misuse.
This bill extends that time period to 30 days and allows the
Public Guardian to also take control of property held in trust,
if specified conditions are satisfied.
In support of the bill, the author writes:
Currently, while compiling information to support a
petition of conservatorship, the Public Guardian's office
has the authority to take possession or control of the
property for up to 15 days. This bill would extend the
Public Guardian's authority for up to 30 days. A frequent
example is when the Public Guardian's office investigates
claims of elder abuse. . . .
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AB 1288 would address problems that regularly arise in
Adult Protective Services and/or Financial Abuse Specialist
Team investigations, which can lead to the loss of assets
belonging to a vulnerable person. AB 1288 would allow the
Public Guardian's office to maintain possession and control
of all of the property, including trust assets, for up to
30 days with the intent to petition for an appointment of
conservatorship and successor trustee.
This action would safeguard the vulnerable person's assets
from misuse and/or fraud while the conservatorship petition
is pending in court.
Background on Conservatorships and Guardianships in California :
Prior to 1967, the court appointed a "guardian" for any person,
child or adult, who was deemed "incompetent" to manage his or
her daily affairs. After 1957, the law distinguished between a
"guardianship," created for a minor, and a "conservatorship,"
created for an adult. There are also specific types of
conservatorships for persons who are considered "gravely
disabled" by reason of mental illness or chronic alcoholism and
subject to confinement in a locked psychiatric facility under
the Lanterman-Petris-Short Act (Welf. & Inst. Code sections 5330
et seq.) and for "developmentally disabled adults" (Sections
1801(d), 1828.5, and 1830).
This Bill Increases the Time Period for the Public Guardian to
Protect Property Prior to Appointment : Current law allows the
Public Guardian, if he or she intends to apply to the court for
appointment as a conservator or guardian, to take possession and
control of the proposed ward or conservatee's real or personal
property that is subject to loss, injury, waste or
misappropriation, for up to 15 days after the Public Guardian
issues a Certificate of Authority. This allows the Public
Guardian to protect the proposed ward or conservatee from
financial abuse even before appointment by a court.
However, supporters of the bill have found that 15 days is not
long enough for the court to adjudicate the petition for
appointment, leaving potential victims of abuse unprotected.
This bill remedies that problem by extending the time the Public
Guardian is authorized to protect property from 15 days to 30
days. This should help ensure that, once the Public Guardian
begins his or her investigation and seeks court action, the
child or vulnerable adult can be protected from further
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financial abuse.
This Bill Adds Property Held in Trust to the Property that the
Public Guardian May Protect Prior to Appointment : More and more
Californians transfer their property into revocable trusts
during their lifetime in order to avoid probate. Unfortunately,
this strategy may increase the risk of financial abuse since
under current law the Public Guardian can only protect property
held in trust by a proposed ward or conservatee after court
appointment. Thus property held in trust today can continue to
be misused and abused even after the Public Guardian is notified
of the abuse up until the Public Guardian is appointed by the
court. To correct this problem, the bill adds property held in
trust to the property that the Public Guardian can protect for
the 30-day period prior to appoint as guardian or conservator.
In particular, this should help protect vulnerable seniors from
further financial abuse.
In order to help ensure that the Public Guardian's power to
protect property held in trust only applies to property that
belongs to the proposed ward or conservatee, the bill requires
that several conditions must be satisfied. First, the proposed
ward or conservatee must be the settlor of the trust. Second,
he or she must have a current right to receive income or
principal from the trust. Finally, he or she must have the
power to revoke the trust. These conditions help ensure that
the trust property protected belongs to, and is under the
control of, the proposed ward or conservatee.
However, if the action of the Public Guardian to protect
property held in trust for this 30-day period is inappropriate
or causes harm, the bill specifically allows any settlor,
trustee or beneficiary of the trust to petition the court for
relief. This should help prevent unintended consequences.
Author's Amendments : The author proposes two amendments to
further the bill's objectives. The first is a technical
amendment to properly define the creator of the trust. This is
accomplished with the following change:
On page 3, line 12, delete "trust was created by the proposed
ward or conservatee" and insert: proposed ward or conservatee
is the settlor of the trust
The second amendment seeks to ensure that any person who may be
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adversely affected by the Public Guardian's seizure of the
property held in trust can seek relief. This is accomplished
with the following change:
On page 3, on lines 25-27, delete "This paragraph shall not
prevent any trustee from requesting judicial relief from any
restraint authorized by this paragraph" and insert: Any
settlor, trustee or beneficiary may petition the court for
relief from any action taken by the public guardian or public
conservator under this paragraph
ARGUMENTS IN SUPPORT : In support of the bill the California
State Association of Public Administrators, Public Guardians and
Public Conservators writes: "These cases often involve senior
citizens where someone is suspected of financially abusing them.
In these cases, the Public Guardian/Conservator must act
quickly to protect the assets of the senior citizen from further
misuse or fraud. The additional 15 days and the inclusion of
trust assets would allow the Public Guardians/Conservators to
better protect vulnerable senior citizens and dependent adults
from exploitation."
REGISTERED SUPPORT / OPPOSITION :
Support
County of San Mateo (co-sponsor)
County of Santa Clara (co-sponsor)
Alzheimer's Association
California State Association of Counties
California State Association of Public Administrators, Public
Guardians and Public Conservators
Consumer Attorneys of California
County of San Benito
County Welfare Directors Association
Del Oro Caregiver Resource Center
Regional Council of Rural Counties
Urban Counties Caucus
Ventura County Board of Supervisors
Opposition
None on file
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Analysis Prepared by : Leora Gershenzon / JUD. / (916)
319-2334