Conservatorship vs. Guardianship: Key Differences

Conservatorship and guardianship are legal arrangements designed to protect individuals who can no longer manage their own affairs. A conservatorship is typically used to handle someone’s financial matters, while a guardianship involves making personal decisions about health and well-being. Though they serve similar purposes, the distinctions between conservatorship and guardianship are significant, and understanding these differences can help ensure the appropriate level of care and responsibility is provided for those in need of support.

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What Is a Conservatorship?

A conservatorship is a court-ordered arrangement where an appointed individual or entity, referred to as a conservator, is granted the responsibility of managing the financial affairs of someone who is no longer capable of doing so independently. This person, known as the conservatee, could be an elderly person with dementia, someone with a severe mental health condition or an individual incapacitated by a disability.

The conservator is tasked with handling financial matters, paying bills, and managing assets to ensure that the conservatee’s funds are used effectively to support their care and needs. Depending on the nature of the person’s financial situation and needs, a conservator may be tasked with:

Paying bills
Managing investment accounts
Paying health care-related expenses
Managing debt payments
Handling the receipt of government benefits, such as Social Security or disability benefits

Why Are People Put in Conservatorships?

People are placed in conservatorships when they are no longer able to make informed financial decisions on their own, often due to age-related cognitive decline or medical conditions that impair judgment. The court decides whether a conservatorship is necessary based on evidence of the individual’s incapacity and in an effort to protect them from financial exploitation or neglect. In such cases, a conservator is appointed to safeguard their financial interests and manage their affairs responsibly.

For example, you may ask to be appointed as conservator of your parents’ financial accounts if they’re not able to manage them because of illness or reduced mental faculties due to aging. Or if you have an adult child or sibling with special needs, you may act as their conservator in managing things like government benefits and other financial accounts.

What Is Guardianship?

Guardianship is a legal process in which the court designates an individual, called a guardian, to make personal and, in some cases, financial decisions for someone who is unable to do so independently. This individual, known as the ward, could be a minor whose parents are unavailable or an adult facing incapacitation due to illness, disability or injury.

The guardian is tasked with decisions related to the ward’s health, living situation, and overall welfare to ensure their needs are fulfilled. Guardianship provides the legal authority to make significant life decisions, such as approving medical treatment or choosing appropriate living arrangements, aimed at creating a stable and supportive environment.

For example, say you’re a guardian for your aging parent. As their guardian, you may be responsible for things like:

Deciding where they’ll live
Helping them transition to assisted living or nursing home care if necessary
Making decisions with regard to their health care

Unlike other forms of care, a guardianship grants legal authority to make critical life decisions, such as consenting to medical treatment or determining where the ward should live, with the goal of providing a stable and supportive environment for the individual.

Legal guardianship can also apply in other situations. If you have minor children, for instance, you could draft a will naming one or more individuals to act as their legal guardian in the event that you pass away before they reach adulthood. In that case, a legal guardian might be responsible for making sure their needs are met, overseeing their education and making decisions relating to their health care.

Temporary guardianship may also be necessary in certain situations, such as an ongoing court case where divorcing parents are disputing custody. This type of guardianship usually has a fixed end date and can be replaced by a permanent guardianship order.

Conservatorship vs. Guardianship: Key Differences

While both conservatorship and guardianship involve appointing someone to help an individual who cannot manage their affairs, there are key differences between these two legal arrangements:

Focus of responsibility: A conservator manages financial matters, while a guardian is responsible for personal decisions related to health and well-being.
Terminology: The individual under a conservatorship is called a conservatee, whereas the person under guardianship is known as a ward.
Scope: Conservatorship primarily deals with financial affairs, while guardianship may involve decisions about health, living arrangements and personal welfare.
Application: Conservatorships are often used for adults with cognitive impairments, while guardianships can apply to both minors and adults who need support with personal care decisions.
Court appointment: Both arrangements require court involvement, but the court’s assessment focuses on different aspects – financial incapacity for conservatorships and general incapacity for guardianships.

Which One Do You Need?

Whether it’s necessary to establish a conservatorship, guardianship or both on behalf of someone else really depends on the details of the situation.

If you’re taking care of your parents as they get older, for example, it might make sense for you to act as both guardian and conservator if you’re an only child. On the other hand, if you’re sharing responsibility for their physical and financial care with a sibling, you may prefer for one of you to act as a conservator while the other acts as a guardian.

It’s important to note that how these terms are used can vary from state to state. And different states can have different laws regarding when conservatorship or guardianship can be used and what range of powers and responsibilities are assigned to either one. The process for becoming a conservator or guardian for someone else can also vary.

How to Become a Guardian or Conservator

Becoming a guardian or conservator requires a formal court process, often initiated by filing a petition with the appropriate probate court.

The petitioner, who could be a family member, friend or even a government agency, must provide evidence that the individual in question is incapable of managing their personal or financial affairs. The court then schedules a hearing, during which the petitioner must present proof of the person’s incapacity, often supported by medical evaluations or expert testimony.

If the court finds sufficient evidence, it will appoint a suitable guardian or conservator. In many cases, the court prefers family members, but it can also appoint a professional guardian if no appropriate family member is available. The appointed guardian or conservator must comply with ongoing court oversight, including submitting periodic reports detailing their management of the ward or conservatee’s affairs.

Training or certification may be required in some jurisdictions to ensure guardians and conservators understand their responsibilities and fulfill them appropriately.

You should also be aware that as a conservator or guardian, the fiduciary standard may apply to any activities you carry out on behalf of someone else. Being a fiduciary means that you must act in the best interests of the person whose financial or personal affairs you’re managing. So if you’re overseeing their investment account, for example, you can’t engage in any trading activity that would benefit you personally.

Bottom Line

The difference between conservatorship and guardianship centers primarily on what each is expected to do on behalf of someone else. While conservatorship often entails making financial decisions for someone who cannot make them for themselves, guardianship focuses on the everyday care and well-being of the ward. It’s possible to become both a conservator and a guardian for a parent, child or another family member, although it’s important to understand what that involves since doing both could prove demanding.

Estate Planning Tips

Consider talking to a financial advisor about what would happen to your assets if you became incapacitated and needed a conservator. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
When mapping out your own estate plan, consider what documents you may need. Paperwork like this could help you protect your investments and other financial accounts. For example, a will is important, but it may also be advisable to create a revocable living trust. A trust can offer protection against creditors while potentially minimizing estate taxes for its beneficiaries.