A conservatorship is the legal appointment of an agent over another’s finances. Unlike a guardianship, a conservatorship only oversees money and financial management, not physical or medical control. A conservatorship, like a guardianship is necessary to remove powers from an individual. For example, to prevent mom or dad from signing up for a credit card or entering into a contract, a conservatorship is required.
The process for a conservatorship is much like the petition for guardianship. However, there are key differences for conservatorship of a minor and of an adult. While uncontested guardianships are a matter of procedure, time, and independent evaluation; conservatorships require among other things: gathering information about all assets, determining a budget for use of the funds, submitting an inventory and asset management plan, and opening accounts are all parts of the conservatorship process. Conservatorships do not require a hearing if they are uncontested. A conservatorship has a much more intensive annual reporting and accounting to the court. Additionally, under a conservatorship, the court must accept where you invest the money. Courts are most likely to approve conservative investments (CDs, bonds, savings accounts, etc.). The court is less concerned about growth in the account and more concerned with the security of the funds.
Sometimes a conservatorship is necessary; however, if a power of attorney was previously created the agent generally has the powers granted in a conservatorship (depending on what powers were granted under the power of attorney). An agent can usually manage bank accounts, tax returns, investment accounts, mortgage payments, signing contracts for assisted living facilities, signing contracts for medical billing, sell a car or personal property, and other necessary finances transactions. An agent may even be granted the power to make estate planning documents, change beneficiary designations, and manage digital assets. A power of attorney may be used to sell real estate, but sometimes a specific power of attorney is required, and the sale of real property may trigger the need for a conservatorship.
A trust is another way in which conservatorships can be avoided. If you create a revocable living trust, you control and have access to the assets exclusively while you are living, but if you become incapacitated, your successor trustee (whom you name in the document), will take over and manage the assets in the trust for your benefit, but will not require any court interference and can invest the money with more discretion.
The time to plan for the future is now. Once dementia sets in, or if an accident happens, many options are lost and the only solution is a conservatorship. While sometimes a conservatorship is the right answer and is necessary, it can be costly, time consuming, and it requires ongoing management. Even if a conservatorship does become necessary, the proper documents can assure that you have named the person you want to serve in the role, prevent conflict over who should serve as conservator, and give your family options.
If you do not have an estate plan, contact Grissom Law, LLC, today to help you create a will, advance directive, trust, powers of attorney, and other estate documents to instruct your family should you become incapacitated or die. An attorney at Grissom Law can review which documents are best for your needs and guide you through the questions and concerns that arise. We will work with you to explain each role, who is the best person to be an agent, and what powers an agent should have.
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