The Perils Of Guardianship Abuse: Corporate Direct's LLC Strategies To Protect The Elderly

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Guardianship abuse in the United States is an urgent yet underrepresented problem. However, Nevada has taken legal action, and families can protect themselves through LLC strategies.

Guardianship Abuse

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It is clear that more judicial and legislative changes are needed.

When your parents reach the age when they require a paid nurse or regular visits from you, it’s common for representatives within the legal system to assume responsibility over their well-being. This unwarranted assumption has led to some horrific stories about older couples being ripped from their independence and forced to pay significantly more for a lower quality of life.

Guardianship abuse is an underrepresented problem throughout the United States. In the face of negative publicity, some state governments have taken steps to deter guardianship abuse. Specifically, Nevada has become more aware of problems and has acted quickly.

James Hardesty, a Justice on the Nevada Supreme Court and chair of the Nevada Supreme Court Permanent Guardianship Commission, is pleased with the results of the reforms. “Over the past year”, said Justice Hardesty, “we have seen dramatic improvements with how guardianship abuse cases are handled.” Reforms include giving potential wards the right to an attorney, creating a new set of more productive statutes for both child and adult guardianships, and staffing the Guardianship Compliance Office with an accountant to review each estate.

However, it is clear that more judicial and legislative changes are needed. In some cases, basic estate planning whereby a living trust appoints a guardian when needed can be used to limit state intrusions. Absent such foresight, given the actions already taken and the actions yet to come, there is hope that Americans can come together and make changes in order to protect our elder family members and friends from these types of guardianship abuses.

Families Can Use This LLC Strategy Tip for Protecting Against Guardianship Abuse:
Consider holding your parents’ assets (brokerage accounts, real estate and/or personal residence) in one or more LLC’s. Your parents will serve as managers of these LLC’s. However, if a guardianship is later imposed, a specially drafted Operating Agreement can provide that the children or a trusted advisor (and not the state or any of their appointees) become the managers. From this position your successor manager will be better able to fight the guardian’s attempts to improperly sell assets.

Theodore Z. Sutton is a recent graduate of the University of Utah and will be attending the University of Wyoming Law School in the Fall of 2019. He is currently involved with legal research in Reno, Nevada.

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Garrett Sutton

Taylor Riedeman
Corporate Direct
since: 02/2015
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