Although some states use the terms guardian and conservator interchangeably, traditionally there has been a slight distinction between the responsibilities of the guardian and conservator. Here we will discuss information specifically related to a conservatorship.

A conservator is an individual appointed by a probate court who is given power and financial responsibility to care for another individual or “ward,” who is determined incapacitated either mentally or physically, and cannot financially manage their own affairs. A conservator may also be assigned to manage the financial affairs of a minor until they reach 18 years of age.

Often individuals who need a conservator may also need a guardian assigned and these proceedings may be simultaneously.

Whether you are attempting to establish a conservatorship in New York or California or in any state between, the process can be complicated and time-consuming. A conservatorship can be requested by a variety of interested parties including relatives, friends, local agencies or a public officer. Below is a general description of the process, but a lawyer, who is familiar with your state’s laws, should be contacted if needed.

  1. File all necessary forms
    To initiate the conservatorship all necessary paperwork must be filed with the appropriate court. Forms vary by state but can include inventory forms, acceptance of appointment forms, notice, affidavit of personal service forms, notice of hearing and notice of rights, physician’s statement in support of conservatorship, order appointing conservator, confidential information form, etc.
  2. Complete and file the conservator petition
    The petition must be filed with the necessary court, describing why this arrangement is required and why other financial alternatives are not viable. After the fees are paid the court will schedule a hearing. Under some conditions the filer may petition to have the fee waived.After the petition has been filed a notice is delivered to the proposed conservatee or “ward,” and a copy of the petition and information about the hearing is sent to the spouse and relatives of the proposed ward. After the information is sent to the relatives, a court investigator will review the request.
  3. Attend a hearing for the conservatorship
    A hearing will be scheduled for the court to review the conservatorship request. The ward of the conservatee or ward should attend the hearing if possible. The court may either grant or deny the request for conservatorship. Generally, if the request is granted, the court will require a bond to be purchased to protect the estate.If the petition is approved the conservator has the ability to exercise their legal powers as defined by the conservatorship agreement. Many states require conservators to attend special training programs and file annual reports to the court.

The conservator must act prudently to manage the estate of the protected person. Failure to use careful and sound judgment may result in liability for damage to the estate.

  1. Inventory the assets
    The conservator must inventory all of the financial assets or estate of the protected person (property, furniture, cash, C.Ds, stocks and bonds, houses, land, cars, retirement accounts, furs, jewelry and art).Generally, the inventory must be filed with the court within 90 days after the conservatorship appointment. If mistakes are made in the initial filing of asset inventory an amendment may be filed.
  2. Prudently manage the assets of the estate.
    Care must be taken to safely manage the estate of the protected person. A Letter of Conservatorship must be filed in the County Recorder’s Office to protect real property. Other financial institutions should also be notified of the conservatorship including the Social Security Administration (if applicable), pension administrators, and banks.All other assets should be stored and insured properly. Consider whether, for instance, a car should be sold to avoid depreciation or if a home should be sold or rented. Always consider how best to maintain property and assets for the greatest benefit of the protected individual.Consult with an attorney if there are legal issues which may increase liability or if there appears to be a conflict of interest in financial decisions. As mentioned above, the court generally requires the conservator to get a bond to insure the estate against the conservator’s performance, unless the assets have been frozen.
  3. Ensure all personal assets are separate from the protected person’s estate.
    Conservators have a fiduciary responsibility. If they believe there is a conflict of interest in managing the estate it is time to talk to a lawyer. Conservators should request permission from the court to borrow or spend the assets in their care.
  4. Managing the bills and taxes of the estate.The conservator is responsible for paying all necessary bills and taxes. This can include employment taxes, and state and federal taxes. If necessary, consult with a tax lawyer.
  5. Maintain records of all expenditures related to the estate.
    The conservator should open a checking account in the name of the conservatorship and ensure that all financial records are property filed. All written letters, bills, tax bills, and legal documents should be kept. Keep important documents safely stored in a safe or safe deposit box. Funds not needed for tax and bill expenditures can be prudently invested. Under some conditions, the protected person may have the mental or physical ability to participate in routine financial management.The conservator must provide to the court an annual record and necessary support material for all of their financial decisions and expenditures. Failure to produce accurate accounting records can increase a conservator’s potential liability, especially if the court questions the management of the estate. If a conservator cannot justify expenses they may be required to repay the estate.

The conservator can be compensated for expenses related to the estate as well as “reasonable compensation.” Good record keeping of the services provided is essential and can justify compensation. Reasonable compensation may vary based on the skill and services of the conservator. The court has the legal right to audit the amount paid to the conservator each year to ensure they are not overpaying for their services.

Whether the protected person dies or the minor becomes of age, at some point the conservatorship will need to be terminated. First, talk to a lawyer about the proper steps, which generally include asking the court to stop the conservatorship and filing an accounting for the final year.

Other financial papers may need to be filed with banks (where the protected person had accounts), the county recorder (if they owned real property) or retirement accounts. If the conservatorship was for a minor (who is now of age), the conservator can ask the court to terminate the agreement and distribute the assets directly to them.

Given the many responsibilities of individuals, it is not uncommon for some conservators to ask the court to remove them from their position. Whether the conservator resigns from their position or is deemed unfit to perform their duties, it is possible to have that relationship terminated by making a request to the court.

Some individuals dread the idea of another person making their financial decisions for them without having the ability to influence or control the conservator’s decisions.

A Durable Power of Attorney may help individuals avoid a financial conservatorship by allowing them to appoint or name someone to manage their financial affairs if they become too incapacitated in the future. This legal arrangement gives the assigned individual many of the same rights as a conservator such as making investment decisions, paying bills, paying taxes and applying for governmental assistance.

The provisions of the Durable Power of Attorney are enforced after a doctor declares the individual incompetent, but prior to this, they can be revoked or amended. Judges do not have to review this agreement and the powers of the assigned individual can be limited per the Durable Power of Attorney agreement.

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