In a span of three years, two cars plowed into Danny Reed, leaving him brain-injured and partially paralyzed. But the San Jose man eventually earned a measure of relief — a trust fund created for a lifetime of care.
Then he was hit again, this time in a seldom-watched branch of Santa Clara County Superior Court, when the man appointed by a judge to protect Reed’s assets delivered the six-figure bill for his services.
While Reed’s case stands out among the roughly 1,500 elderly and incapacitated adults whose lives and finances are overseen by Santa Clara County’s probate court, a six-month Mercury News investigation found a small group of the county’s court-appointed personal and estate managers are handing out costly and questionable bills — and charging even more if they are challenged.
Over the next four days, on MercuryNews.com and in the newspaper, you can learn more about the troubling trend that is depleting the life savings of some of Silicon Valley’s most vulnerable adults — and the local practices and state laws that allow it to persist.
Check back on this site at 3 p.m. Saturday and in the pages of the Mercury News on Sunday to read “Loss of Trust,” the story of one San Jose man’s struggle to fight his court-appointed trustee’s bills and to change the system.
And then at 3 p.m. Sunday, learn how other Bay Area courts are holding the line on private estate and care managers’ fees.
At noon Monday, join our online chat on how to avoid probate conservatorships with staff writer Karen de Sá and local experts in trust and probate law.
As always, let us know what you think by sharing your comments below.
Loss of Trust: San Jose man battles trustee, court system to preserve life savings
June 29, 2012
Santa Clara County’s court-appointed personal and estate managers are handing out costly and questionable bills
Karen de Sá
June 30, 2012
In a span of three years, two cars plowed into Danny Reed, leaving him brain-injured and partially paralyzed. But the San Jose man eventually earned a measure of relief — a trust fund created for a lifetime of care.
Then he was hit again, this time in a seldom-watched branch of Santa Clara County Superior Court, when the man appointed by a judge to protect Reed’s assets delivered the bill for 4 1/2 months on the job. With tasks charged at up to $250 an hour, the bill totaled $108,771.07 — a pace of spending that would wipe out the cash in the 37-year-old’s trust in about three years.
“I couldn’t believe it,” Reed said. “After I read through page after page of sickening page, it was just hard to believe that something like this could be permitted in the court system.”
Believe it. While Reed’s case stands out among the roughly 1,500 elderly and incapacitated adults whose lives and finances are overseen by Santa Clara County’s probate court, a six-month investigation by this newspaper found a small group of the county’s court-appointed personal and estate managers are handing out costly and questionable bills — and charging even more if they are challenged. The troubling trend is enriching these private professionals — working as conservators and trustees — and their attorneys, with eye-popping rates that threaten to force their vulnerable clients onto government assistance to survive.
“In theory, they’re looking at a person’s estate and wondering: ‘How much can I make here before they pass away?’” said Denis O’Neal, a former deputy Santa Clara County counsel, who is familiar with the group’s billing practices and drew some sharp conclusions about the worst cases he saw in his 30 years in the field of elder abuse. “Their goal is to tap into that money.”
Despite the culture of excess, O’Neal and others say, there are plenty of Santa Clara County estate and care managers who work hard for modest pay to rescue voiceless people from neglect and tangled finances. They often toil as unwelcome outsiders, battling complex family dynamics.
Still, the abuse persists in a county where, this newspaper found, lavish bills were seldom challenged and routinely approved for years. Unlike other Bay Area courts, Santa Clara County’s has few guidelines for appropriate charges and — many observers say — a history of indifference that encourages some of these conservators to ask for the moon, with hourly rates that are double what other courts typically allow.
In one case reviewed by this newspaper, a conservator charged a Belmont dementia patient $1,062 to help celebrate her birthday. Another billed an incapacitated Sunnyvale couple $26,946, including attorneys’ fees, for the 12 days she spent sorting through mail and orchestrating a cleanup of their roach-infested home. And a third firm billed a San Jose quadriplegic $298,135 for a year’s service, including attorney fees.
Now, court investigators and some attorneys — including the San Jose law firm championing Reed’s cause — are fighting back against these excesses, triggering a series of legal confrontations. They’re also taking aim at troubling local practices and state law that they say have rigged the system against the very people it’s supposed to protect.
Under California law, challenging an excessive bill presents an astounding damned-if-you-do dilemma: A private estate manager can bill the cost to defend his charges right back to the person who protested the bill in the first place. Reed learned that the hard way: When he fought trustee Thomas Thorpe’s original six-figure demand, the Los Gatos professional simply charged Reed for the fight. The total for those bills: $261,878, more than double the amount of the charges he was defending.
That perverse predicament would become central in Reed’s fight.
An imperfect match
Just how Reed and Thorpe ended up in a court-ordered relationship illustrates the trouble that can come when for-profit estate managers are matched with people the court deems in need.
On the one side are adults, most with little voice and little decision-making ability, who surrender their legal rights and all aspects of their care and finances under the state’s probate laws. On the other side are California’s 563 fiduciaries: Licensed to provide personal care and money management, they oversee more than $5 billion in other people’s assets.
Their relationship begins when family members or public servants conclude outside help is needed and petition the court for assistance.
Reed’s life became tied up in probate court when he was 22, after a drunken, drug-addled motorist rammed into his tent at the Burning Man Festival in the Nevada desert, splitting open his skull. He emerged from a coma suffering from a traumatic brain injury and a mostly paralyzed left arm. In 1999, he was awarded $815,000 in a negligence lawsuit.
That same year, he was hit again by a car in a downtown San Jose crosswalk. Again, he ended up in the hospital with brain damage. Again, he successfully sued, receiving an additional $900,000.
At first, the court appointed Reed’s mother, Jolaine Allen, to oversee his finances and care. She bought a modest townhouse for him and deposited the rest in the bank. In the decade that followed, Reed struggled to regain his brain function and independence. He still has virtually no use of his left arm and suffers from chronic pain, but he managed to get his driver’s license and study Web design in community college.
Then, suddenly, after failing to review Reed’s case for years, court officials raised questions about how his mother was managing the $650,000 then remaining in his trust. In her effort to diversify his investments, one account was mislabeled, jeopardizing Reed’s ability to draw disability income vital to his care. County officials convinced Judge Thomas Cain to appoint someone to temporarily oversee Reed’s trust.
A court investigator consulted a binder that lists the county’s licensed fiduciaries and chose Thorpe, a former wealth and trust adviser for several major banks who manages $6.8 million in assets.
From the start, Reed objected, but his mother figured once she cleared up the confusion the judge would remove Thorpe.
“We didn’t know,” she said, “that once they appoint a trustee it’s almost like you need dynamite to blast them out.”
Indeed, in 2010, Thorpe and his attorneys, Diane Brown and Michael Desmarais, asked the court to approve $108,771 in charges to Reed’s trust for 473 hours of tasks by Thorpe and his staff. Thorpe had changed the titles on two bank accounts, paid a handful of bills, increased some insurance and prompted a cleanup of Reed’s townhouse, described in court papers as a “hoarder’s lair.”
So how did the charges climb so high so quickly? A closer review of Thorpe’s task-by-task billing system underscores the way some local private estate managers do business — charging top rates for conversations and consultations with colleagues, on top of charges for emails, calls and faxes.
For example, on a single day in August 2010, Thorpe’s bill came to $2,232 for 16.4 hours of time that he and three colleagues at Dragomir Fiduciary Services of San Jose spent on the case. Thorpe’s services that day included an unannounced visit to Reed’s townhouse with two police officers to inspect the property; inquiries into a neuropsychiatric evaluation of Reed’s mental capacity; and time spent meeting with and emailing his colleague Mircea Dragomir.
Disgusted by what he saw as he flipped through that first bill, Reed said he was determined to fight back. He had no idea, however, just how difficult and costly that fight could be — or that he would be up against a system that for years had allowed conservators and trustees like Thorpe to prosper.
Reed not alone
Most people whose lives are under the control of probate court have no ability to understand their plight like Reed does. But other aspects of his situation are chillingly familiar.
This newspaper’s investigation found that for years private estate managers working under court supervision in Santa Clara County have been handing out detailed six-figure bills — and that in many cases, their clients were ill-prepared to push back or even review them.
Among some more recent examples:
- In September 2010, during the same period Thorpe was handling Reed’s trust, a judge approved the $257,948 bill that Thorpe and his attorney Steve Yarbrough submitted for just over a year’s work handling the trust and personal affairs for Hans Bakke, a former Portola Valley resident and World War II veteran.
Bakke died in March 2010, with court records showing his trust valued at $854,613, which he planned to leave for his 43-year-old daughter who suffers from mental illness. The trust helped support Bakke’s daughter and buy her a condominium as Thorpe and Yarbrough wound down Bakke’s affairs. Two years later it is nearly empty.
Yarbrough described the case as extraordinarily difficult, including a major cleanup to sell Bakke’s house and the costly care for his daughter. There also were bills to pay, back taxes and funeral expenses.
And there was one last round of Thorpe’s charges. In a letter in April, Yarbrough informed the attorney for the conservator of Bakke’s daughter that once his and Thorpe’s final fees were deducted from the $77,743 left in the trust, there would be just $8,796 left.
The husband-wife team of Sue and Dave Katra, owners of Trusted Solutions Los Gatos, charged $85,505 for their work managing the life and estate of 71-year-old Paige Simpson over 15 months in 2010 and 2011.
Their bill included tens of thousands of dollars for a lengthy but never-completed remodeling project at Simpson’s San Jose home.
In their accountings, Sue Katra charged $1,062 for 8ï»¿ 1/2 hours she spent purchasing a gift and celebrating Simpson’s birthday. She joined Simpson for a Christmas luncheon at a Belmont dementia facility for a $437.50 fee. And when Simpson needed knee surgery, Katra charged $906.25 for helping with travel and pre-op arrangements, and an additional $937.50 the day of surgery — time mostly spent driving and in the waiting room.
Many private care managers bring in lower-paid staff or reduce their rates to perform perfunctory tasks. The Katras, however, say they prefer to be there for their clients, who may wander or have complicated emotional needs.
“Our care philosophy costs more,” Dave Katra said, “but our clients live better and longer.”
- The cost of trustees, conservators and attorneys helped ravage the estate of Anna Garcia, a retired San Jose day care provider who together with her husband had scrimped over a lifetime for a comfortable old age. Now an 80-year-old widow with dementia, Garcia has seen her estate plunge in value under the court’s watch from $2 million in 2008 to less than $300,000 today, according to an attorney appointed by the court to defend her interests, Victoria Tran Sood.Garcia’s last in a succession of money managers, Richard Lambie, charged rates from $165 to $250 an hour. His attorney Yarbrough described the job as exceptionally challenging because of warring siblings, and things got more expensive when Tran Sood protested the fees. The court recently approved Lambie’s and Yarbrough’s last bill for roughly a year of service, totaling $105,590, about one-third of what Garcia has left as she faces the high costs of end-of-life care in a board and care home.
“My mother’s estate is paying for that whole circus,” said Garcia’s daughter, Diana Garcia, who has now taken over as her trustee free of charge. “She was just the golden goose.”
Santa Clara stands out
In many counties, officials say, such bills would be promptly rejected — or private estate managers wouldn’t dare to submit them in the first place. But for years, Santa Clara County has been different.
- Its rules are looser, even though its 38 licensed fiduciaries handle $612.9 million in assets — more than double the total of any other Bay Area county. While other Bay Area counties limit overall fees or hourly rates, Santa Clara County’s court does neither. The court also is alone in allowing conservators to charge additional administrative fees that can total thousands of dollars a year.
“It’s a big circle of friends and no one will take them on,” said O’Neal, the former deputy county counsel.
To its credit the court has sought more resources from the state. In 2008, following the publication of a Los Angeles Times investigation that showed an overwhelmed probate court system failing vulnerable elderly and dependent adults, the state began licensing fiduciaries. It also instructed courts to hire more investigators who could help judges monitor cases and scrutinize fees. Santa Clara County proposed to double the size of its investigative office to 14. But two successive governors have rejected the funding needed for the probate reform, so the county now has just eight investigators to handle more than 180 cases apiece.
There are signs, however, that Judge Cain, who took Santa Clara County’s probate post in 2010, is starting to bolster court oversight. He requested a third year and is widely considered to be more critical of fees than his predecessors were, according to at least a dozen observers. As this newspaper has monitored a series of probate cases closely in recent months, the judge has cracked down.
In one instance, Cain lashed out at fiduciary Nancy Norris when she submitted a bill for herself and for her attorney of almost $27,000 even before she had the court’s permission to take on the case of an elderly Sunnyvale couple. Cain told her to eat the costs and return more than $6,000 she received directly from the couple.
Court officials are also now reviewing Dave Katra’s charges and, in a rare move, are urging the judge that he pay back Simpson’s estate more than $40,000 for unlicensed home repairs. A March 21 court investigator report described charges for meetings with contractors ï»¿as “false and misleading” — claims Katra is contesting.
Defenders of private estate managers say while sometimes fees can seem high, their work is demanding and underappreciated. “If we didn’t have them, I don’t know what would happen to these people,” said Sheri Sudweeks, a Los Gatos estate and trust attorney. “They generally are stepping into a very big mess. If it were simple, friends or family would do it.”
In two wide-ranging interviews, Cain agreed that private professionals perform a desperately needed service, given the great number of families locked in bitter disputes or misusing relatives’ funds.
But the judge acknowledges concerns about some prematurely depleting their clients’ life savings.
When high bills catch his attention, Cain said, “the private professionals and the attorneys that represent them are very aware that they better be well prepared to defend themselves.”
‘Being held hostage’
The two had been at odds even before they met, and Reed later begged the judge to remove his trustee while Thorpe asked to be appointed permanently. In one clash in Cain’s court that typifies the leverage estate managers try to use, Thorpe’s attorney Desmarais told the judge that Thorpe would step down “only after his accounting is approved and his fees have been ordered by your honor.”
“So I’m being held hostage?” the judge snapped back.
In October 2010, Thorpe did resign from the case and was replaced by Reed’s sister Jenivee, who works free of charge. But there was still the matter of his bill — and he was far from finished tallying his costs. In fact, court records show, Thorpe and his attorneys charged Reed an additional $44,000 weeks after he resigned, mostly to assemble their fees.
To fight back, Reed has needed a level of resources and resolve that few, if any, of the people who rely on this system have at their disposal.
He has found an advocate in deputy public defender Mark Dames, who was assigned to represent Reed during his journey through the probate court. And he has benefited from critical reports by court investigator Eugene Franco, whose job it is to review bills like the one Thorpe and his attorneys submitted for $108,771.
But what has allowed Reed to take his fight beyond where any has gone before is the pro bono support of the father-son team of Matthew and Michael Crosby. The San Jose attorneys joined the battle early last year, saying they were fed up after years of watching court-appointed professionals take advantage of vulnerable people.
Matthew Crosby had successfully challenged Thorpe and Dragomir in another case. When Thorpe and company charged a blind quadriplegic stabbing victim $298,135 for a year’s work, Crosby fired off a letter of protest and the conservators quickly cut their fees by $99,586.
Thorpe’s supporters call it the art of compromise, and they fault Reed for refusing to consider a settlement in his case — a refusal that could cost him dearly.
But for Reed and his legal team, taking on Thorpe and exposing a system that they say is stacked in favor of private estate managers was worth the risk. Their goal wasn’t just to cut the fees Reed had to pay. It was to send a message to conservators, trustees, judges and California lawmakers that things had to change.
They launched their fight on many fronts, suing Thorpe in civil court for emotional distress, attacking his bill in probate court, claiming he had breached his fiduciary duties — a claim which, if validated in court, could cost Thorpe his license — and challenging the state law that discourages anyone from confronting a private estate manager in the first place.
Little did they know how long the fight would last.
‘The top 1 percent’
What started in December 2010 — heightened by Franco’s confidential report to the judge calling Thorpe’s approach “an overzealous and at all costs mentality” — has traveled to three courtrooms, three branches of the legal system and is still going strong.
In court documents, Dames labeled Thorpe’s bill “an astonishing and shameless example of unrestrained greed … made more deplorable in that it is attempted at the expense of a disabled person who will desperately need the money for his own survival.”
Thorpe, who has declined repeated requests to be interviewed, has defended his fees in court documents as “eminently reasonable,” depicting Reed as hostile and meddlesome and his attorneys as the greedy ones using Reed to drum up future business.
At one hearing, Thorpe’s attorney Desmarais — a past president of the Silicon Valley Bar Association charging $475 an hour — argued that Reed deserves no special treatment. “Danny Reed,” he said, is now among “the top 1 percent” with his townhouse and his $650,000 in cash.
“My goodness,” Desmarais exclaimed. “I want to be this kind of victim.”
In April 2011, after settlement talks broke down, the battle for Thorpe’s still-unpaid bill spilled into a rare six-day trial on another floor in the downtown San Jose courthouse.
In a July 2011 ruling, Judge Franklin Bondonno reduced the $108,771 bill by more than half, rejecting $57,485. The judge found no evidence Thorpe violated his court-appointed duties. But he found most of his fees unreasonable, rejecting charges for consulting with colleagues, and numerous phone calls and emails related to Thorpe’s legal defense that Bondonno stated did nothing to advance “the interests of the Danny Reed Trust.”
But months later, in a second ruling, a clearly pained Bondonno found that while Thorpe was not entitled to any money for his legal defense, Reed’s trust must pay Thorpe’s attorney $146,556 for the costs of defending the original bill. Together, the two rulings awarded nearly one-third of the money Reed has remaining.
“Unfortunately, for Danny Reed,” the judge wrote of the California law that made Reed responsible for his own legal costs and those of his adversary, “this is a social policy issue better raised in the Legislature or the Court of Appeal.”
For Thorpe, the outcome was a resounding victory, even though the judge rejected more than $106,000 he billed Reed for his role in the case. In his only direct response to this newspaper, Thorpe emphasized in an email that Bondonno “ruled that I DID NOT breach my fiduciary duties, nor violate my code of ethics in any way.”
When Reed made that charge, the judge ruled, he raised the stakes to a “life and death level for Thomas Thorpe,” a position Reed took “at his peril, and he lost.”
But Reed’s team isn’t giving up and has taken its case to the Sixth District Court of Appeal.
“There’s a flaw in the system that’s being exploited,” attorney Michael Crosby said. “And for Danny Reed to take the steps to fix that flaw — or at least bring awareness to that flaw — I think has a much more lasting impact than the pure dollar amount.
“What he is doing could hopefully prevent this from happening to a number of other people.”
The two years of battle to get back control of his life have left Reed angry, mystified and agonized over his predicament. Still, the power of his example persists: In a system whose victims rarely have the ability to defend themselves, Reed is speaking up.
“Oftentimes you don’t have that voice because the person doesn’t understand what’s going on,” Matthew Crosby said. “He was able to step up and say: ‘Help me do something about this.’”
- Santa Clara County’s court-appointed personal and estate managers are handing out costly and questionable bills
- Online discussion: How to avoid conservatorships, July 2 at noon
- Mercury News editorial: County judges must impose tighter rules for managing vulnerable residents’ estates
Santa Clara County court-appointed estate manager quits case after questions about fees, judgment
Karen de Sá
June 30, 2012
Two years after a Los Gatos Jesuit center settled an explosive sex-abuse lawsuit, a Santa Clara County judge entrusted Russ Marshall to oversee the $2.5 million awarded to one of two mentally disabled dishwashers molested for decades by clergy.
Such a delicate and high-profile assignment seemed a natural fit for Marshall, one of Silicon Valley’s premier estate and elder-care managers, overseeing $76 million in assets.
But late last year, with questions mounting over his billing practices, Marshall resigned from the case as court officials made a troubling discovery: The $50-an-hour personal companion he had hired to take his long-abused client on outings turned out to be a former priest.
“Appalled” that a former priest had been anywhere near the traumatized man, Judge Thomas Cain blocked Marshall from charging his client’s estate $19,406 for the companion’s trips to ice rinks, ballgames and other events during a 22-month period. Cain said hiring the companion “shows all kinds of problems with regard to not only background checks but judgment and everything else. He never should have been there to begin with.”
A deeper look into Marshall’s background shows this wasn’t the first red flag.
In 1983, long before Marshall served as president of the Professional Fiduciary Association of California, his real estate license was revoked and then restricted for 18 years after state officials found him partially responsible for $155,000 that went missing from a trust account. Marshall blamed the impropriety on the president of his real estate brokerage firm.
And a decade ago, he was accused by the Santa Clara County Counsel and Public Defender’s offices of violating his professional duties after he moved an incapacitated San Jose couple from their home against their wishes and without court approval. The accusation unfolded into an extraordinarily rare 13-day trial that ended with a judge finding that Marshall violated some of his legal responsibilities but caused no harm. He was fined a dollar.
This newspaper’s examination of court-appointed private estate managers’ fees showed Marshall as a standard-bearer for charging hourly rates that are far higher than what most Bay Area courts allow — and for layering many staff charges into his bills.
Marshall declined repeated requests to be interviewed. But in a brief courthouse conversation with a reporter, he emphasized that a judge has never cut his fee requests.
Yet, in confidential reports referenced in public documents, two court investigators have questioned the bills Marshall submitted for caring for the 61-year-old Los Gatos man, a sex-abuse victim referred to in civil court filings as James Doe.
They wanted to know, for instance, why James should have to pay for Marshall’s $105-an-hour caseworker, Sarah Benson, to meet him at the bank when he was already being accompanied by a caretaker from a local nonprofit agency. From 2009 to 2011, Marshall charged $4,755 for Benson to meet James at the bank 96 times.
And elsewhere in the reports, a court investigator described as “excessive” Marshall’s charges for Brian Leipzig, a former priest who was hired to provide male companionship after James’ sister, who had managed his care and finances, died. What’s more, in court filings Leipzig is described as “a Licensed Vocational Nurse” and “a licensed social worker and nurse.” However, there’s no evidence in state records that he holds licenses to work in those professions.
Leipzig declined interview requests.
Questions about Leipzig’s past led to more bills for James Doe. Marshall charged $702 for two July staff meetings to discuss “responding to the court investigator.” And in January, he charged $97.50 for a half-hour discussion with Benson and Leipzig to instruct the companion to have “no future contact” with James.
Most of Marshall’s services last year were performed at $195 an hour, although the rate climbed at times to $240 an hour.
In contrast, Patricia Bye, who replaced Marshall in October, bills at a maximum $125 hourly rate. Among her first moves was to raise James’ monthly allowance for groceries and miscellaneous expenses by $800 to $3,000, his first increase in two years.
While Bye works on her own, as many as six Marshall Fiduciary Services employees worked on everything from James’ pet hamster to his tankless water heater, often on every day of the business week.
In court documents, Marshall defended his work on James’ case, arguing that his fees are similar to “the compensation customarily allowed” in Santa Clara County’s probate court. He maintained he has managed the estate “frugally and without waste.”
And to many, Marshall is an industry leader. A former manager of estate administration in the county Public Guardian’s Office, he helped craft statewide probate reforms. “He’s someone I’d rely on for myself or my family,” said Douglas Miller, a staff attorney for the state Administrative Office of the Courts.
But Los Gatos shopkeeper Holly Ilse, who first reported the priest abuse in 1997, laments how Marshall was managing James’ painfully earned estate.
“Somebody who was supposed to be the best in the field,” she said, “took advantage of him again.”
Santa Clara County lacks rules to rein in fees of court-appointed conservators
Karen de Sá
July 1, 2012
In California, elderly and disabled adults, blessed with some savings but incapable of caring for themselves, foot the bill when judges appoint private business people to manage their finances or daily affairs.
But when it comes to racking up those charges, no place in the Bay Area stands out like Santa Clara County.
An examination by this newspaper found that in Contra Costa, Alameda and Marin counties, court-appointed conservators wouldn’t get very far if they tried to charge the $330 maximum hourly rate that turns up on one San Jose professional estate manager’s rate schedule, or the $295 an hour described on a well-known Campbell conservator’s fee list. That’s more than double what other courts allow.
And if estate managers burned through the life savings of a dependent adult in San Francisco or San Mateo counties, they would be expected to stay on the job the rest of their client’s life — for free.
But in Santa Clara County, this newspaper found, these court-overseen services can come at exorbitant costs in a probate court system with few specific rules to rein them in. When families can’t care for elderly and incapacitated adults, these private professionals can be assigned as conservators or trustees to arrange everything from complex money management to rides to the grocery store.
In Santa Clara County, some work alone, charging top rates for their services. Others employ staff members, whose multiple tasks layered on top of fiduciary fees can also add up to astounding six-figure bills for a single year.
“The buck stops at the court, and we should have more guidelines and more factors to determine reasonable fees,” said Victoria Tran Sood, a South Bay probate and trust attorney who represents the elderly and their families. “Here we don’t have that, so people take their chances. The young fiduciaries charge according to what they’re taught, and the older guys charge double and layer their bills because they can get away with it.”
A survey by this newspaper of five Bay Area superior courts found that the Santa Clara County probate division lacks guidelines routinely enforced elsewhere.
While Contra Costa, San Francisco and Marin counties all provide guidelines for fees based on hourly rates or the percentage of assets, Santa Clara County has no defined limit on what a private estate manager can charge.
For example, this newspaper on Sunday published the story of one San Jose man’s costly attempt to fight a $108,771 bill he received from a court-appointed trustee after just 4 1/2 months on the job. While state law says fees must be “just and reasonable,” the Danny Reed case and others featured Sunday show how broadly that code is interpreted.
Presented with this newspaper’s findings, Santa Clara County Superior Court Presiding Judge Richard Loftus expressed concern, saying the court had started its own review when this newspaper started raising questions months ago.
“We really need to begin to address this, and that’s what we are trying to do,” Loftus said in an interview last week. “We are looking at how they do this in other places,” making sure people are adequately cared for in a cost-effective way.
“If there are ways to do this better or smarter,” he said, “we’re going to look at those.”
Private estate managers and the attorneys who represent them argue that their fees can seem high at first glance — such as the six-figure annual bills this newspaper uncovered — but supporters say they are fully justified in this high-cost region.
Like other local attorneys who defend fiduciaries, Los Gatos trust and estate attorney Janis Carney said judges here understand the special skill set required to handle complex elder care and manage messy estates. Carney, past president of the Silicon Valley Bar Association, described the probate court in Santa Clara County as “more fair” because judges have not limited conservator compensation as routinely as they do in the surrounding region.
“I hear horror stories in other places,” Carney said, but she noted that “the culture here is not to cut fees.”
Judges in Marin County, for example, have become so critical of fees that private estate managers are leaving the business, said longtime Corte Madera elder law attorney Patricia Tobin.
Indeed, Santa Clara County’s court — which oversees more than twice as many assets as any other Bay Area court does — stands out for its relatively loose guidelines:
The CEO of Santa Clara County Superior Court, David Yamasaki, said judges follow state-mandated guidelines — such as weighing the size of an estate, the complexity of a case and typical local rates — and then ultimately decide what a private estate manager should be paid.
Establishing whether fees are reasonable is no simple task, said the county’s lead probate judge, Thomas Cain. He said he does not approve fees unless he receives explanations that satisfy him. And when he needs to raise objections to fees, he does.
But often his questions are met with surprise, Cain noted: “I can’t tell you the number of times conservators presenting their fees in court say: ‘Well, no one’s objecting.’ ”
Cain is now in a rare third year on the Santa Clara County probate bench. In other Bay Area counties, judges tend to stay in probate longer — some for a decade or more — rather than cycling on and off the bench as they do in Santa Clara County, typically within two years or less. Elder law experts say the constant rotation can lead to lower levels of scrutiny.
“Certainly a new judge is more inclined to just approve what had been approved before — and after they’ve been there for a while … they’d be more likely to recognize a fee that is out of line,” said recently retired Contra Costa County Probate Judge Pro Tem Don Green, who served for 11 years. “The fact that I was more experienced meant people were less inclined to think they could get away with it.”
TIPS TO AVOID COSTLY CARE
Conservatorships can become extremely costly to elderly and incapacitated adults when private estate managers are named by the local probate court. But good planning and asking questions can reduce the likelihood of such a scenario.
Elder law experts recommend: