One of the most egregious cases in Arizona of fiduciary betrayal was the case of lawyer Wayne Legg who was once known as the “King of Probate.” Legg was accused of skimming and plundering his clients’ estates. In 1994, he was convicted on 13 counts of felony theft and fraud. See Phoenix News – Barrister Behind Bars – page 1.
Interestingly, Wayne Legg wasn’t the first lawyer I heard about who took advantage of elderly clients. No, there’s still a prominent place in the Hall of Shame for Laguna Hills, California estate planning lawyer, James Gunderson.
Coincidentally, around the same time as Legg was up to no good in Arizona, The Los Angeles Times ran a series of stories about Gunderson and how he set himself as a beneficiary in the wills and trusts his law firm prepared for his clients. Lawyer Inherited Millions in Stock, Cash From Clients – Ethics .
Gunderson eluded disbarment by resigning. And talk about chutzpah, he was a guy who with a straight face would brazenly assert that making himself a beneficiary of his elderly client’s largess was nothing more than him dutifully fulfilling their instructions. No doubt, he missed the section on conflict-of-interest in the lawyer’s ethical rulebook. One example that still stands out for me is how Gunderson had a 98 year old client bequeath him $3.5 million! Lawyer Defends Bequest to Him by Client : Courts: 98-year-old wanted him to have $3.5-million dollar gift, James Gunderson says in trial of civil suit brought by man’s relatives. Ex-partner backs testimony.
At the feeding trough.
But while the Legg and Gunderson cases are among the most egregious of my recent recollection, what about more recent instances of law firms as well as guardians who think nothing of gorging at the trough running up astronomically questionable fees at the expense of a vulnerable elderly client?
So its not just private and public fiduciaries as well as family members and friends that need monitoring. Lawyers can also engage in predation. The reforms must be comprehensive.
Prescription for reform.
There are no shortage of stakeholders among elder advocates who have ideas on how to improve the system. One is, The National Association to Stop Guardianship Abuse, (NASGA), which recommends the following steps to improved reform.
Licensing, Certification and Background Checks
In order to assure recovery against defalcation, bonding of professional fiduciaries must be mandated, with discretion regarding bonding of family-member guardians, so as not to discourage their participation. Criminal background checks must be done on all guardians, including family members. Professional guardians must be licensed and certified!
End the Money Lure
Since “conservation” is a stated purpose for the promulgation of protective statutes, the money lure must be removed from the system. Tight annual fee and commission caps on earnings by attorneys and other fiduciaries must be put in place. Guardian caseloads must be cut to a more manageable level.