A conservatorship is a legal arrangement where a court appoints an individual or organization (known as the “conservator”) to take charge of someone’s personal and financial affairs. The individual who is under conservatorship is known as the “conservatee.”
What does it mean when someone is under conservatorship, and why might this happen? Read on to deep dive into the topic and answer some commonly asked questions.
Conservatorships are typically established when someone is unable to make decisions for themselves due to incapacity, infirmity, or disability.
Conservatorships are designed for people suffering from a mental, psychological, or emotional disability that prevents them from making important decisions—often financial or health-related—and may suffer harm due to their inability to make those decisions.
Here are some scenarios where this type of legal action might be necessary:
Family members generally request conservatorships if they feel a loved one can no longer make their own decisions and someone else needs legal authority to act on their behalf.
Sometimes family members can’t agree on the care and financial control of an elderly parent. In such cases, the court may determine that a third-party conservatorship would provide more independent management of the individual’s assets.
A guardianship is a similar legal arrangement to a conservatorship in which a court appoints a guardian to make decisions for another person who is unable to do so due to incapacity or disability. Someone who is under guardianship is known as the “ward.” The key difference between conservatorship and guardianship is that the latter typically covers personal and medical decisions rather than financial matters.
Alternatives to using a conservatorship include a trust or power of attorney, both of which come with advantages and disadvantages. Ultimately, it boils down to:
If someone objects to being placed under conservatorship, the court will determine what is best for that person. This may require independent evaluation and testimony by one or more medical professionals, family members, and others familiar with the individual.
There are typically 3 kinds of conservatorships:
In this arrangement, the conservator has only certain powers which are determined by the conservatee’s abilities. For instance, if the conservatee can manage their day-to-day expenses like buying groceries and paying their rent but cannot manage their investments, the conservatorship would apply only to investments.
This can be granted when the conservatee’s needs are temporary, or another conservatorship is pending. Temporary conservatorships usually last about 90 days.
Under this arrangement, the conservator has complete control of the conservatee's finances. This is generally necessary when the conservatee is unable to manage any aspects of their finances.
Once the court has approved a conservatorship, the conservator will begin by gathering details of all the conservatee’s assets, take over the management of those assets, and perform other administrative tasks, including:
Conservatorship appointments are of an indefinite duration. This may become problematic if a younger, physically healthy person is subject to a conservatorship or when someone initially in need of a conservator recovers the ability to manage their affairs independently.
A conservatorship can only be terminated by the court. The process is usually straightforward if the conservator and the conservatee agree to terminate the conservatorship.
A conservatorship can be modified or terminated if it's no longer needed or isn't working out. To do this, the conservatee or someone acting on their behalf needs to file a petition with the court that granted the conservatorship and attend a hearing to present evidence, such as medical reports or financial documents.
The court may remove a conservator that has failed to act in the conservatee's best interests and appoint another.
Upon the death of the person under conservatorship, the management of their estate usually passes to an executor or trustee for probate. Probate, or estate administration, is the legal process of administering a person's property after they have died. It involves validating the deceased's will (or appointing an administrator if they died without leaving a will) and distributing their assets to beneficiaries under the supervision of the court.
A conservator has a fiduciary responsibility, meaning they must act in the conservatee’s best interest. Unfortunately, while conservatorships are designed to protect vulnerable individuals, the opposite can happen. Sometimes, an appointed conservator may misuse their authority for personal gain, neglect the conservatee's needs, or make decisions that aren’t in their best interest.
The court system aims to protect conservatorships from abuse or exploitation by setting the following rules:
In addition, every year, the conservator must submit a report to the court accounting for all the transactions made on behalf of the client and file an inventory of the conservatee’s assets. If the conservator charges any fees for performing these services, the court must pre-approve them as reasonable.
Getting conservatorship is something the courts take seriously, and the process can feel incredibly complex. An estate planning attorney can simplify the process for you, gain a good understanding of your needs, and guide you through the process step by step.
If you’re an estate or trust professional, Estateably is here to help you modernize your practice. Our estate, trust, and incapacity accounting administration software offers powerful document automation, easy-to-use accounting, and comprehensive one-click reporting.
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