A California lawmaker on Tuesday joined a chorus of outrage over exorbitant fees depleting the life savings of elderly and disabled adults in Santa Clara County, calling for new state rules to cap what court-appointed estate managers can charge for their service.
Assemblyman Jim Beall, D-San Jose, said "immediate" action is also needed to stop conservators and trustees from billing an incapacitated adult's estate thousands of dollars more to defend their own fees in court.
Beall's call for statewide change comes a day after Santa Clara County's top judges vowed reforms to rein in fees following an investigation by this newspaper. "Loss of Trust" uncovered how some court-appointed conservators are charging hourly rates up to $250, double what most courts allow. The newspaper's series this week found six-figure annual bills eating into the trusts of elderly and disabled adults who have no family or friends to care for their finances and daily needs.
Reading of the cases "just made me sick," said Beall, who has a developmentally disabled adult with a special-needs trust in his family. "We need to limit these rates and set up some parameters so we don't have people's life savings or their family's life savings drained away."
"Loss of Trust'' highlighted conservators and their attorneys charging extraordinary fees: A Portola Valley man's estate was billed $258,000 in a year, money he hoped to leave his mentally ill daughter; a Belmont
Beall's office on Tuesday contacted the state's Judicial Council in his efforts to adopt statewide rules to cap court-overseen professionals' hourly rates. He said he will also pursue legislation in the fall to change a state law that holds the estates of dependent adults responsible for paying both sides of any legal fight arising from fee disputes.
That predicament was clear when a San Jose man with disabilities tried to challenge a $108,000 bill after 4 1/2 months of work by his court-appointed trustee. Even though a judge threw out the majority of trustee Thomas Thorpe's bill, he awarded Thorpe's attorney more than $150,000 from Reed's trust for defending Thorpe and the original bill. The judge said he had no choice, ruling it was a matter for the Legislature or appeals court.
State law, as defined by a 1989 California Supreme Court ruling, allows so-called "fees on fees," but noted concerns that such awards could lead to a "Kafkaesque judicial nightmare."
"If I had my way,'' Beall said, "that law would not exist after tomorrow."
The Democrat, who is now running for the Senate, is particularly close to the issue, because of his own family situation.
"The worst nightmare of a parent is if they pass on and set up a trust for their disabled children, that someone's going to creep in and steal all their money and leave their child uncared for and vulnerable," Beall said.
Curtis Child, director of governmental affairs for the state's Judicial Council, said Tuesday that he had been in touch with Beall's office and expressed openness to reforming state rules.
"Certainly the Judicial Council would be committed to looking at any rule of court that may be necessary," Child said. "We would work with the legislature on any solutions that they may be interested in proposing."
Insurance Commissioner Dave Jones said Tuesday he does not believe new state laws are necessary. He cited the newspaper's report on how courts in other counties have been able to more effectively rein in fees with their own guidelines.
"The system relies on the courts to police the fees," Jones said.
When he was a state lawmaker, Jones authored a package of reform bills that overhauled the probate system, which oversees the lives and estates of the elderly. But while those changes led to new licensing requirements, it was left up to the courts to approve appropriate fees.
"For whatever reason, that does not appear to be happening in Santa Clara County,'' Jones said.
Santa Clara County Superior Court judges have responded swiftly to the newspaper's exposé. The day after the two-part series, the presiding judges vowed new local guidelines "within weeks" to rein in estate managers' fees.
Now those efforts may reach beyond Silicon Valley.
After reading "Loss of Trust," Russ Heimrich, spokesman for the state agency that licenses California fiduciaries, encouraged residents to contact his bureau with reports of any excessive fees.
"When it looks like people are taking advantage of the people who are being overseen by the conservators, then we can and we will initiate investigations," Heimrich said.
Private trustees have reacted angrily to details of the cases in the newspaper. Thorpe, Reed's former trustee, on Tuesday described the reports as "incredibly unfair," but said he could not discuss details because of the ongoing legal battle. Thorpe told a reporter: "The truth is still out, and you haven't written about it. For goodness sake, print something positive."
Trustee Russ Marshall reacted with dismay to the newspaper's exposure of his role as conservator for a developmentally disabled man who had been abused years earlier by clergy. A judge chided Marshall for hiring a former priest to be the man's daily companion. Although the paper did not name the man, Marshall said in an email that the story had "caused him harm" nonetheless.
Contact Karen de Sá at 408-920-5781.