A conservatorship is created to let one person manage another’s finances. The conservator is court- appointed and may be responsible for financial decisions, such as retirement planning, the purchase or sale of property and the transfer of other financial assets.
The laws for conservatorships and guardianships can vary widely in different states. A conservatorship or guardianship is typically necessitated by a disability or injury that prevents a person from caring for themselves.
US News & World Report’s recent article entitled “How Conservatorships Can Prop Up or Tear Down a Loved One” explains that once you have a conservator in place, the burden is on you to prove you no longer need it. The biggest issue in most cases is abuse of power or neglect. Either (the conservator) is doing something self-serving, such as spending money on something other than the senior’s care, or they’re not helping the conservatee, or providing the care they need.
Estate planning attorneys may recommend a conservator or guardian be named in standard estate planning documents, like a power of attorney. A conservator can be any adult, possibly a family member, who is tasked with the responsibility of managing the person’s finances.
Because a conservator would be in charge of a person’s assets, it’s common for the same person to be named to serve as attorney-in-fact or agent with a power of attorney. However, because a guardian is in charge of the person themselves, it’s wise to nominate the same people who are named to serve as health care agents in the client’s health care proxy. Sometimes, these are the same, but if they’re different, it is important for that difference to be stated.
A guardianship is created in cases when a person can’t take care of themselves and requires another person to make some or all of their personal decisions. This might include decisions about his or her medical care, support services, housing, or finances. While a court appoints both a conservator and a guardian, a conservatorship is generally limited to financial decisions. In contrast, a guardianship deals with personal decisions, like medical care, and may, in some instances, also cover financial decisions.
Just about every state has laws designed to protect those placed in a conservatorship or guardianship. For example, in California, individuals must satisfy medical requirements to be determined unable to care for oneself. The burden of proof to meet such restrictions is high.
In addition, individuals can seek professional help in preparing for future circumstances that may prevent them from managing their finances and personal affairs. This includes estate planning documents, such as wills, powers of attorney, beneficiary forms and health care proxies.
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Reference: US News & World Report (Aug. 19, 2021) “How Conservatorships Can Prop Up or Tear Down a Loved One”