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GUARDIANS FOR PROFIT

When a Family Matter Turns Into a Business

Conservators are supposed to protect the elderly and infirm. But some neglect their clients, isolate them -- even plunder their assets.

November 13, 2005|Robin Fields, Evelyn Larrubia and Jack Leonard | Times Staff Writers

Thomas had a complex family, with children from several marriages. He picked an outsider -- Labow -- to be conservator of his estate.

She was appointed in September 1998. Just over a year later, Thomas told his court-appointed counsel that he "wanted Frumeh Labow out of my life."

Labow refused to go, saying Thomas had chosen her before his illness clouded his judgment.

After five years, Labow remained in charge. Thomas had paid $1.1 million in fees to her, the lawyers his relatives had hired to oust her, and the six attorneys Labow had hired to fend them off and manage his holdings.

Suffering from aphasia, Thomas, 70, is no longer able to speak for himself. His family has come to accept that Labow will be a permanent presence in their lives.

"You can't fight them if they're using his money to fight you," said his son, Michael.

'Sarah Could Be Trusted'

Court-sanctioned fees are the only compensation to which conservators are entitled for managing the affairs of their clients.

The Times found at least 50 instances in which conservators used their authority over seniors' assets to benefit themselves or their friends, relatives or employers in other ways. Courts approved many of their actions, though often with incomplete information.

A Sacramento conservator hired his live-in girlfriend's firm to auction off his wards' possessions and sell their houses. A San Francisco conservator decorated his apartment with a client's valuable Chinese paintings.

Melodie Scott acknowledges that she let another professional conservator, Sarah Kerley, live rent-free in a client's house in Glendale for months. Kerley was married to Scott's brother at the time.

Scott did not disclose their relationship in her reports to the court. In an interview, she said the three-bedroom, Spanish-style house was in poor condition and that Kerley made repairs in lieu of paying rent and, later on, in exchange for reduced rent.

Scott said she did what she thought was best for the client, Jeanne Ledingham.

"There was no intention ever to take advantage of Ms. Ledingham to the benefit of Sarah Kerley or myself," Scott said. "I thought I was being a hero.... This charming little house, this beautiful garden -- Sarah could be trusted."

While Kerley was living there, Ledingham paid the utility bills, as well as thousands of dollars to a gardener and a property manager hired by Scott.

Ledingham, who suffered from bipolar disorder, was 51 when Scott took control of her affairs. Scott moved her into a board-and-care and, later, an apartment while Kerley lived in her house.

Ledingham's daughter, a sophomore at a Louisiana college when the conservatorship began, said she was appalled by what happened.

"There were all these people -- conservators, attorneys, judges," said Candace Ledingham-Ramos. "No one was looking out for my mother."

Marin Support Services for Elders, a nonprofit group for seniors, was supposed to look out for Florry Fairfield.

Fairfield, a retired real estate agent who had never married, lived with her miniature schnauzer, Daisy, in the quiet Bay Area suburb of Fairfax.

Anne Smith, then director of Marin Support Services, became Fairfield's conservator in March 2001 after telling a court that Alzheimer's-type dementia had left her "clearly unable to handle her affairs or resist undue influence."

Less than a month later, Fairfield, then 82, signed a new will. It was drafted by the lawyer representing Marin Support Services in the conservatorship case.

The will made the organization the main beneficiary of Fairfield's $1.1-million estate and named Smith co-executor.

California law bars professional conservators from inheriting from their wards in such circumstances unless the will was reviewed by an independent attorney or a court. There is no evidence that either step was taken in Fairfield's case.

The law clearly applies to individual conservators. It is unclear whether it applies in this instance because the beneficiary of the will was Marin Support Services, not Smith. Still, experts said, neither conservators nor their employers should become their clients' heirs because it creates a conflict of interest.

"What incentive do they have then to keep the client alive?" said Mitchell Karasov, the elder-law attorney. Every penny spent on the ward's care would reduce the conservator's bequest, he said.

William Kuhns, the lawyer for Marin Support Services, said he drew up the will at Fairfield's request. She decided on her own how to divide her wealth, he said.

"Maybe it gives you the appearance of a conflict of interest, but I've been an attorney for many years, and I'm very comfortable that this was in accordance with her wishes," said Kuhns.

Kuhns collected more than $36,000 for his work on Fairfield's conservatorship and estate.

Four weeks after Fairfield signed the will, a judge deemed her dementia severe enough to disqualify her from voting.

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