As the average life expectancy is increasing, it is becoming more frequent that our loved ones will need more care beyond their own abilities to do so. While most of us have heard of conservatorships, not everyone is familiar with how they work and how they can be used to benefit those you care about.
What is a conservatorship?
Simply put, it is a legal document that appoints or designates someone through the local probate court to supervise and protect that person from harming themselves or mis-managing their assets when they are no longer capable of doing so themselves.
What is its purpose?
Without a conservatorship the individual may not make good decisions regarding their day to day care or financial management. An elderly person or someone with Alzheimer’s for example may not receive the proper daily nutrition, manage their hygiene or medical issues or understand their financial responsibilities, such as paying their bills. A court appointed conservator can ensure that these issues are addressed properly.
There are 2 types of Conservators:
1) Conservator of Person, a designated individual who supervises the daily activities and living needs, and
2) Conservator of Estate, a designated individual who manages monetary and financial matters.
And yes—the same person can manage both.
What are the types of Conservatorships?
A voluntary conservatorship is requested by an individual who may want to designate someone to manage his personal or financial matters for a specific reason and for a specific limited time. The Probate Court will determine that the person making the request is capable of understanding what he is asking for and its implications. A voluntary conservatorship can be terminated by that ward when they want to regain authority to manage their own personal and/or financial affairs.
An involuntary conservatorship addresses those cases where someone no longer is capable or willing to appoint a voluntary supervisor but still needs assistance. Medical reasons or advanced age are often the basis for this type of action.
How is one created?
An application is filed in the Probate court, with jurisdiction being based on the court where the ward is living (at home) or currently residing in a facility. Included with the application is a physician’s evaluation and an inventory of the ward’s assets. Once court ordered, a conservatorship will last until the ward’s condition improves to the degree they can once again manage their personal care and/or finances, or with the death of the ward. During the length of the conservatorship, the Court will over see the activities with yearly accountings and current physician reports.
Designation of a Future Conservator
Because a probate court has great latitude in who they appoint as conservator, sometimes against the wishes of the family, a very good estate planning tool is for people to prepare and execute a form Appointing a Future Conservator. It requires the court to abide by the wishes of the person no longer able to speak for themselves.
WHAT IS THE DIFFERENCE BETWEEN A POWER OF ATTORNEY and a CONSERVATORSHIP?
Control—a person acting under a POA can act for someone but cannot overrule them so the individual can continue to make poor decisions whereas a Conservator takes over the decision-making ability and cannot be over ruled.
Supervision–Probate Courts oversee Conservatorships and can require a Conservator to post a bond to protect the ward from any loss regarding his assets. A person acting under a Power of Attorney does not have this detailed supervision. They do not have to report to anyone-including their ward or their family members. There can be a much greater chance of a ward’s interests being abused both as to care and finances.
Simply put a POA is a better tool for someone still capable of watching over their own care and finances but who for some reason wants a third party to manage their lives. However, once they lose this ability to check on themselves, a POA can become dangerous. For this reason a court can invalidate the POA and appoint a conservator instead.