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Conservatorships are formal probate proceedings brought on behalf of an individual who is unable to properly provide for his or her personal needs, or is unable to manage his or her finances. Contents 1. Overview of Conservatorships There are two forms of conservatorships: conservatorships of the person and conservatorships of the estate. A conservator of the person may be appointed for someone who is unable to provide properly for his or her personal needs for physical health, food, clothing, or shelter. A conservator of the estate may be appointed for someone who is substantially unable to manage his or her own financial resources or resist fraud or undue influence. The court can appoint a conservator of the person or the estate, or both. Once a conservatorship is imposed, the conservator will take the place of the conservatee for most transactions. A conservatee is presumed to lack capacity to contract, to sell property, to make gifts, to incur a debt, and so forth. However, absent a court order to the contrary, a conservatorship does not remove the conservatee’s ability to make a will, to vote, to give informed consent for medical treatment, to marry, or to seek divorce. 2. Alternatives to Conservatorship Because conservatorship proceedings can be relatively expensive, time-consuming and public, many people are interested in alternatives to the conservatorship. With conservatorships of the person, the main alternative is informal assistance provided by relatives or social service providers. If an individual's disability is severe, however, a conservatorship of the person may be necessary. The two main alternatives to a conservatorship of the estate are a durable power of attorney for property management and a living trust. Both of these techniques involve the preparation of documents appointing an agent or trustee to act on one's behalf in the event of future incompetence. However, both techniques require that the incompetent person be legally competent at the time the document is prepared. Thus, a conservatorship proceeding will often be necessary if the proposed conservatee is already legally incompetent. One potential drawback to the durable power of attorney and living trust is that they do not terminate the incompetent person’s ability to enter into binding transactions. This can be problematic if the incompetent person has been prone to making poor financial choices. Also, with durable powers of attorney, third parties (such as financial institutions) may refuse to accept an agent's authority to act for an incompetent person without a court order. In either of these cases, a conservatorship proceeding may be advisable. One significant advantage to the conservatorship is that the conservator’s acts are subject to ongoing court approval and oversight. A conservator is required to seek court approval for significant transactions involving the conservatorship estate, and must also file with the court a formal accounting of the conservatorship estate at least biennially. While court oversight may cause administration of a conservatorship to be more expensive than a living trust or durable power of attorney, it can also minimize the potential for abuse by a conservator. This advantage may be more important in instances where there is family disharmony or a large conservatorship estate. 3. Instituting Conservatorship Proceedings A conservatorship proceeding is instituted by filing a petition for appointment of a conservator. All close relatives of the conservatee (i.e., children, parents, grandchildren, grandparents, and siblings) must be notified of the petition. The petition must explain how the conservatee is unable to provide for his or her personal needs and/or properly manage his or her financial resources. A court investigator must then personally interview a proposed conservatee and to inform the conservatee of his or her legal rights in the proceeding. The proposed conservator must also post a bond before he or she is appointed by the court. 4. Duties of Conservator and Attorney A conservator is responsible for the following duties: managing the conservatee’s finances, protecting the conservatee’s income and assets, making an inventory of the estate’s assets within 90 days of his or her appointment, making sure that the conservatee’s bills are paid, investing the conservatee’s money, ensuring that the conservatee is receiving all income and benefits to which he or she is entitled, filing tax returns for the conservatee, and filing periodic accountings with the court. 5. Compensation of Conservator and Attorney Compensation to the conservator and conservator’s attorney is paid out of the conservatorship estate once court approval of the compensation amount is obtained. Unlike probate proceedings, where a fixed percentage of the estate is used to calculate compensation, compensation in conservatorship proceedings is based upon various criteria, such as the time spent by the fiduciary in performing the services and the fiduciary’s level of skill and experience. The rate will also vary depending upon whether the conservator is a private conservator (e.g., a relative) as opposed to a professional or institutional conservator. |
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