Eight years ago America’s baby boomers, people born between 1946 and 1964, began to retire. At nearly 75 million, they represent one of America’s largest elder care challenges. Millennials, now in their 30s, will need to begin thinking about how to look after parents as medical, financial and mental health needs arise.
For lucky families this will mean consultations with financial advisors and perhaps even travel agents. For many, however, this will mean talking with doctors and lawyers, and in some cases assuming conservatorships.
What Is a Conservatorship
A conservatorship is a form of legal guardianship of an adult. Under this structure you, the conservator, has legal authority over certain aspects of the ward’s life. This can range from a limited conservatorship, which addresses only specific matters such as health or finances, to a full conservatorship, in which you essentially have the same rights and responsibilities that a parent does over a child.
In all cases, a conservator has full authority over the relevant aspects of their ward’s life. When this structure is applied to a minor it is typically called a guardianship. Some jurisdictions refer to conservatorships as “adult guardianships.”
When Is a Conservatorship Granted?
Conservatorship is granted when the individual in question no longer has the capacity to make decisions on their own behalf. In virtually all cases this is a judgment based on mental incapacity. Physical incapacity will rarely, if ever, create a basis for legal guardianship.
Mental incapacity can be caused by several different circumstances. Some of the most common include:
- Coma or other form of total incapacity. In this case the individual is physically incapable of responding, making a decision or communicating a decision.
- Illness or other form of mental incapacity such as dementia, severe mental illness or Alzheimer’s. In this case the individual is considered mentally incapacitated, even if they can clearly communicate intent.
- Permanent or genetic disability. In this case the individual has a permanent mental disability that prevents them from ever reaching legal maturity or independence.
The general test for a conservatorship is whether the individual is capable of knowing and understanding their actions; whether the individual is capable of providing for their basic needs such as food, sanitation and shelter; and whether the individual might be considered a danger to themselves.
This is a legal proceeding. While the details will vary across jurisdictions, a conservatorship must be granted by an officer or appointee of the court. This matter is typically handled by either a state probate court or a family court with hearings typically held by a judge or a magistrate. With the rare exception of short-term orders during exigent circumstances, a conservatorship can only be granted after a full hearing and could even be part of estate planning.
Most, if not all, jurisdictions require medical paperwork before granting a conservatorship. However, in all circumstances the potential ward must have an opportunity to be heard by the decision maker and present their own case as to why a conservatorship should not be granted. Further, an individual has the right to challenge a conservatorship in court if they disagree with the outcome. This is because a conservatorship involves stripping a free adult of certain aspects of his or her freedom. No court may do that without granting the individual in question the right to be heard.
Forms of Conservatorship
There are several types of conservatorship. While not an exhaustive list, the most common are:
Conservatorships by Duration
- Short Term – Typically lasting no more than 90 days, this is a conservatorship designed to address a specific and immediate need. This is most common when someone is unexpectedly incapacitated. If the jurisdiction allows conservatorships without a formal hearing, it will limit that authority to short-term conservatorships.
- Temporary – This is a conservatorship lasting for either a limited amount of time or under limited conditions. For example, if someone enters a medical coma, a judge might grant a temporary conservatorship until such a time as the individual wakes up.
- Permanent – Barring a change in circumstances, this conservatorship will last for the rest of the individual’s life. The individual may file to have it rescinded but will need to present their case and receive a court order in order to succeed.
Conservatorships by Type
- Financial – The conservator has full authority over the ward’s finances. While the ward still has full physical autonomy, they cannot access their money, investments or most forms of property without the conservator’s signature.
- Physical – The conservator has authority over the ward’s health and life. The conservator can choose where the ward lives, how their healthcare is managed and whether the ward needs to be placed in a living facility of some sort.
- Full – The conservator has full authority over the ward’s finances, physical autonomy, health and all other significant decisions. It is uncommon for a court to grant a physical conservatorship without also granting financial authority as well, so this is more common than a physical conservatorship.
- Limited – The conservator has authority over some specific aspects of the ward’s life. This is often granted in cases of a mentally disabled adult, to allow their guardian to continue caring for them while also allowing the greatest degree of autonomy possible. The conservatorship may be tailored to the specific needs of the ward.
It is important to understand that a conservatorship is built around the needs of the ward, not the interests of the conservator. The decision maker will typically consult with doctors and social workers and will appoint a conservatorship based on what they believe will best keep the ward healthy and safe.
Conservatorship vs. Power of Attorney
Power of attorney can accomplish many of the same things as a conservatorship. It gives someone the authority to make legally binding decisions on your behalf and the scope can be as narrow or as broad as you choose.
Unlike a conservatorship, however, it is exercised at the discretion of the individual. This means that someone can grant power of attorney to whomever they wish and can revoke it whenever they wish.
This is often an option exercised by individuals who want to prepare for their own incapacitation. They may draft a power of attorney form empowering someone to make financial, healthcare or other decisions on their behalf. Provided that this was drafted when the individual was of sound mind, this will supersede any conservatorship.
Responsibilities of a Conservator
As a conservator you must make decisions on behalf of your ward. You are considered a fiduciary, meaning that you have a legal obligation to make decisions in the ward’s best interest to the best of your knowledge, belief and ability. The court can enforce this on its own authority. So can relatives or other interested parties who can sue you personally if they have reason to believe you did not act in the ward’s best interests.
In the case of a financial conservatorship this means ensuring that the ward’s bills are paid, taxes filed and investments overseen, among other duties. You must make sure that they have money to pay for daily necessities and, if necessary, make those purchases yourself. In the case of a physical conservatorship, this means making sure that the ward receives any necessary health care and is in a living situation safe for them.
Above all else, the conservator must not use the ward’s resources for their personal gain. If a conservator places their ward in a living facility, for example, the conservator may not move into the ward’s former home. A financial conservator absolutely cannot use the ward’s money for their personal benefit.
To ensure this, conservators answer to the court which appointed them. While the details will vary, they are required to keep full records of every decision they make on behalf of their ward and must periodically present this information to the court. For a financial conservator, this means keeping receipts and other financial records along with an accounting of the purpose behind each transaction.
For a physical conservator, this means keeping all health records and medical recommendations that support any decisions. Often the state will require that the conservator have a doctor’s recommendation before making any health-related decisions.
Depending on the state, larger or more permanent decisions may require a court order. For example, some states require approval from the court before the conservator can sell land, securities or other major property. Others will require a court order before allowing the conservator to commit the ward to a long-term care or assisted-living facility.
Rights of a Conservator
As a conservator it is generally wise to receive a court order for any significant decisions even if you are not required to do so. As long as you presented the court with all the information you had, it will provide your actions with legitimacy.
Finally, conservators are entitled to receive pay. Even as a family member or friend you may get paid for the time that you spend managing the ward’s affairs. While this can range widely based on circumstances, most conservators claim between $40 and $100 per hour for their work. You will want to make sure to fully document your hours, not just the time that you spent but what you did during that time, as you must present your hours to the court in order to receive compensation.
In most, if not all, cases the money will be taken from the ward’s finances. As a result, many individuals who hold conservatorships over friends or loved ones choose not to accept pay, as they don’t want to take money from someone already in a difficult situation.
A conservatorship can ensure that a loved one’s personal finances and healthcare issues are properly handled after that person is no longer able to make good decisions about such matters. It’s best to discuss that option with the potential ward before a conservatorship becomes necessary. Likewise, if you want to make sure that your affairs are prudently and sensitively handled should a disability or disease compromise your abilities to make good decisions, it’s best to discuss that with the person or persons you have confidence would make good conservators.
- Many financial advisors have training in and experience with conservatorships and can be an invaluable resource for your family. Consider talking to a financial advisor about adult guardianships. Finding the right financial advisor who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors who will help you achieve your financial goals, get started now.
- Conservatorships are based on state laws and, in some cases, may even be modified by city laws. That means it’s essential you should consult an attorney; this article should not be construed as legal advice. An attorney who specializes in this field can advise you whether a conservatorship or power of attorney – or some other option – is the best way to go.
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