Conservatorships

We are often asked what the difference is between a guardian and a conservator. Or what is the difference between a fiduciary under a power of attorney and a conservator. Then, once families realize the POA isn't enough and a conservatorship is needed they are worried about the legal process. Let's alleviate some of your stress now.

A guardianship is about appointing a person (the guardian) as the decision maker over medical decisions for the incapacitated person. A conservatorship is about appointing a person (conservator) as the decision maker for financial decisions for the incapacitated person. Both a guardianship and a conservatorship require a court hearing and determination.

A power of attorney is a written document where one has given a certain amount of power to the agent to act on their behalf. The person giving the power has capacity at the time of execution. A court is usually not involved in a POA.

Sometimes a Power of Attorney has left out needed powers for the agent to act, and now the person is incapacitated. In this circumstance a conservator will be needed to act on behalf of the incapacitated person.

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Sample Process for Appointing a Conservator...

APPOINTMENT

First, a petition is filed. A GAL is appointed. This begins the investigative phase.  During the investigative phase the attorneys and the guardian ad litem will conduct interviews with family, friends, physicians, and the alleged incapacitated to determine the best possible choice for a conservator (and whether one is needed) for the alleged incapacitated person. Once a suitable person is found (family, friend, attorney, or other financial fiduciary) the GAL will set forth the reasons for the recommendation in the Guardian ad Litem's report to the court.

BOND

 After the court hearing the party is either deemed incapacitated or the court can find the person has capacity and the case is dismissed.
​If the person is deemed incapacitated, bond is often required for both guardianships and conservatorships. Posting bond is an attempt to minimize the misuse of a incapacitated person's assets. Bond is usually one 1.5-2 times the value of the assets in the estate subject to the conservatorship. This does not include assets managed by other means, such as a trust or power of attorney. Sometimes a certain family member cannot qualify for bond because of bankruptcy or other issues.

RECORD KEEPING

Once a person is appointed as the conservator, s/he should keep detailed records of the money and assets.

A separate bank account should be created.
The conservator should use checks, signing in the name of the conservator's capacity (not as an individual). The conservator should keep copies of all receipts and checks written. 

Often the guardianship documents ask for a list of assets, as well.
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Contact your local commissioner of accounts for help.

REPORT

Most conservators will need to file an annual accounting. This is often reduced to once every 3 years after a period of time. It also depends on what the court documents require. Read your Court Order. Speak with your attorney. Check with your Commissioner of Accounts because rules vary by jurisdiction. 
Many families opt to have their annual conservatorship report written by an attorney. This is a helpful option. To learn more about the Commissioner of Accounts in your area, click below. 
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