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Conservatorship

WHAT HAPPENS WHEN SOMEONE BELIEVES YOU ARE NOT ABLE TO MANAGE YOUR OWN AFFAIRS?

If someone believes you are not able to manage your own affairs, they have the right to petition the court and ask the court appoint someone referred to as a conservator to manage your legal and personal affairs.

  • If you have set up a living trust, a co trustee or successor trustee has the inherent right to manage your property on your behalf with no intervention of the court.   If you haven’t set up a living trust, a spouse may learn they do not have the legal authority legal authority to buy or sell property without you designating that he or she is your attorney-in-fact.
  • If your children need to act as a caregiver, your children may not be able to manage your money without you designating them as your attorney-in-fact.
  • If you are not married, your partner will generally not have the legal right to manage your financial affairs unless you have completed a power of attorney naming your partner as your attorney-in-fact.

In the absence of any such advance directive from you giving someone the power to manage your money and property for you, a spouse, child, attorney, other relative or loved one must begin a legal process known as a Conservatorship with the probate court.

Q. What happens when a conservatorship case is filed?

A. Conservatorship is a judicial process whereby the probate court appoints a person, referred to as a conservator, to hold and protect your personal and financial rights.

The purpose of the conservatorship process is to have the probate court appoint someone and give them legal authority to make financial decisions and/or personal care decisions on your behalf.  Some states call this process a Guardianship, as the person appointed to take care of a mentally incompetent adult has duties similar to those of a guardian for a minor or disabled child.

Attorneys often refer to the conservatorship process as living probate, because the probate courts become involved in managing your affairs while you are living.

The conservatorship process is a two-part procedure.

Step 1: Someone, usually a spouse or an adult child, must file documents with the courts requesting you be declared incapable of managing your personal or business affairs.

When a conservatorship action is filed, it must be served on all interested parties.  The court will set a time for an evidentiary hearing.  At the hearing, testimony will be given by friends and medical professionals regarding your physical and mental health.  You may be present at the hearing and the judge may ask you questions to establish your incompetence.

After hearing the evidence, the court may deem you mentally incompetent and/or unable to care for your own basic personal and financial protection.

Step 2: After the court agrees you are incapable of managing your own affairs, your spouse or some other third party will request that they be appointed as conservator.

More than one party may apply to serve as your conservator.  If there is more than one person who seeks to be appointed conservator, state preference laws give higher priority to the appointment based on their relation to you. For example, if you are married, the preference is for your spouse.  If you are not married, the next priority is usually your parents.  Other interested parties, including members of your family, have the right to contest a request to act as your conservator.

The person appointed to act on your behalf, referred to as the conservator, is required by law to provide to the court an accounting of how they manage and spend your money.  The conservator can charge a fee for performing these duties.  All legal, accounting and court fees are paid for from assets owned by you, the conservatee.

A Family Story: Living Probate: Contested Conservatorship.

Matt and Emma, a married couple, owned a restaurant together.  Matt had been married before; he had one daughter from that marriage, Jessica, age 28.

Matt, at the age of 57, suffered a stroke, from which he suffered major brain damage rendering him incapable to walk, talk or think rationally.  Matt’s doctors concluded his condition was permanent. Emma decided to sell his business and take care of Matt.

Matt had not prepared a durable power of attorney.  No one had the legal authority to sign any documents authorizing the sale of the business.

Emma met with her lawyer.  The lawyer explained the need to file for a conservatorship over Matt.

Emma filed documents requesting the court declare Matt incompetent and for her to be appointed as the conservator.  The court scheduled a time to hear testimony from Matt’s doctors. Emma and Jessica attended the hearings.  The judge agreed Matt was incompetent and needed someone to make decisions on his behalf.

Jessica contested the appointment of Emma as the conservator and filed documents alleging such a choice would put Jessica’s inheritance at risk.

After a lengthy, expensive, public legal procedure, the court appointed a financial institution as the conservator of the estate for Matt.  This financial institution will receive a fee for managing Matt’s affairs, money which will come from Matt’s income. The court appointed Emma the conservator of the person for Matt.

All of the documents filed with the courts regarding Matt’s physical condition and his finances are public information.

Just when Matt needs the support of both Emma and Jessica, they are not talking to each other.  Matt could have executed a power of attorney naming Jessica and Emma as co-attorneys-in-fact, requiring both signatures on financial decisions.  This simple document would have likely eliminated costly legal proceedings and the management of Matt’s financial affairs by someone Jessica and Emma have never met.

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Q. Can you prevent your financial or health care information filed with the courts from being public?

A. Documents filed with the courts as part of a Conservatorship procedure are generally public records.  Anyone can visit a probate court or go on line and review most of these documents.

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Q. Why should you complete a Pre-Need Conservator form?

A. Sometimes, whether you like it or not, someone may file documents with the probate court requesting the courts appoint a conservator to act on your behalf.  Anyone is entitled to seek to have you conserved or to have a guardian appointed for you.

If the court decides that you do, in fact, need to be conserved and if you have previously completed a pre-need guardian form which designated a person who you trust to serve as your conservator or guardian, the court will give first priority to that person in its appointment.  If you have not prepared a pre-need guardian form, the courts may appoint someone you would not want making financial and health care choices for you.

FACT: Pre-Need Guardian for minor children.

If you have minor children, you should also complete a Pre-Need Guardian form designating someone you want to become your children’s guardian, in case you ever become incapacitated.  This document may not deny a natural parent their right to be a custodian, but single parents should definitely complete this form.

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