A conservator is a person or entity appointed by a court to manage the financial affairs and property of an incapacitated adult who is incapable of making responsible decisions regarding their assets.
Conservators often have an assortment of powers related to different parts of the conservatee’s life. At a minimum, a conservator usually needs to provide an annual report to the court. Financially, the conservator has the power to collect all the conservatee’s assets, pay bills, make investments, etc. The conservator must seek court supervision for major transactions (purchases, sales, loans, and gifts).
The title of a conservator often depends on what role the court appoints them to take. Financial conservators are often called “conservator of the estate”, while guardians are “of the person”. An incapacitated person may need just one or multiple types of conservatorships. The same person can be appointed to take both jobs. Both types of conservators are supervised by and held accountable to a court.
Conservators and Guardians can also dictate personal choices of the incapacitated person – where they live, what activities they may participate in, and so on. Conservators and Guardians are supposed to consult with the conservatee and account for their wishes while making the best decision for them – but that doesn’t always happen.
A conservatorship might not be necessary if someone has previously planned for the situation. For example, a revocable living trust can appoint a trustee to manage financial affairs, but the individual must be competent at the time the trust is established. The trust spells out the conditions necessary for a trustee to take over. Alternatively one could create a Durable Power of Attorney for Asset Management, which delegates to an agent the power to make financial transactions on behalf of an individual if he/she is unable to do so himself. These transactions are not subject to court review.
By the time someone needs a conservatorship, they usually cannot make these decisions by themselves. A conservatorship provides a higher degree of protection for the conservatee than other alternatives due to court oversight of the conservatee. The general process for establishing a conservatorship is below:
The first step is to file a petition with the court. The petition must contain information on why the individual cannot manage his or her financial affairs or make appropriate decisions concerning his or her personal care. Then, a court investigator (referred to as a guardian ad litem) is appointed to interview the proposed conservatee and to determine if the individual is truly incapacitated and whether appointment of a conservator is justified. The investigator reports back to the court with an opinion.
The petition is then set for a hearing. Family and interested parties are notified of the proceedings and may testify in court. Unless excused for medical reasons, the conservatee needs to appear in court. At the hearing, the judge determines the outcome based on the petition, report, testimony, and other evidence in the hearing. If the judge rules in favor of a conservatorship, the judge also outlines the powers granted to the conservator. A court investigator visits the conservatee regularly to determine whether a conservatorship is still necessary.
Conservatorships can be extremely expensive. Even if the petitioners don’t have an attorney, the potential conservatee is entitled to an attorney. The costs of paying the guardian ad litem, court fees, lawyers on both “sides”, and the conservator itself quickly mount.
The expenses of a conservatorship aren’t limited to the initial startup fees, either. Returning to the court for approval of transactions requires additional attorney’s fees and can create delays in completing transactions. Another potential recurring cost is compensation of the conservator – regardless if they are a professional or a family member paid by the hour. For those without funds, in some cases, the court can appoint a public guardian who is an employee of the jurisdiction in which the individual lives and is paid for by that jurisdiction.
Despite the costs, conservatorships are useful due to their higher levels of protection and oversight. The conservator must file an inventory that lists all the property of the conservatee and must file accountings with the court that reflect all transactions involving the conservatee’s assets. When a family is having trouble agreeing on what should be done, a conservator can be the neutral party whose only concern is the best interest of the individual. Another advantage to a conservatorship proceeding is that it provides a structured method to assist an incapacitated individual who may be reluctant to accept such assistance.
Yet monetary expenses aren’t the only costs associated with conservatorship. The process is often lengthy to initiate (or to terminate). Details of a conservatorship hearing can become part of a public record, which is accessible by anyone. This loss of privacy can be hard for the individual conserved. The individual also loses independence and power to make his/her own decisions.
Conservatorships can be terminated under certain circumstances upon a court order. If the conservatee dies, improves in condition, or if their assets run out, the conservatorship may end.
Occasionally, however, a conservator will mismanage a conservatee’s assets or make poor choices about the conservatee’s health care. Although each state has rules and procedures designed to prevent such abuses, few have the resources to keep an eye on conservators and follow through if they spot trouble. Many cases of incompetence or mistreatment go unnoticed.
The best way to avoid a conservatorship being necessary is to create a Durable Power of Attorney.
(We have some articles on Durable Power of Attorney that we could link to.)