We know the thought of creating an estate plan might make your head spin. But failing to do so can cause way more mind-numbing, stressful, and time-consuming efforts later.
Creating power of attorney (POA) documents as part of an estate plan assigns an individual the authority to make decisions in financial or medical matters for another person. But POAs must be created by a competent individual prior to any incapacitation.
When power of attorney documents do not exist, and an adult individual becomes physically or mentally incapacitated or is otherwise unable to make their own decisions in health-care or financial matters, legal proceedings are necessary to give someone else the authority to manage the individual’s affairs.
During a guardianship proceeding – sometimes known as a conservatorship of the person – a person’s legal ability to manage their health and welfare is challenged.
During the proceeding, if proven incapacitated, the rights of the individual – the protected person – are taken away. A guardian is then appointed as decision-maker in those health and welfare matters.
A conservatorship – or guardian of the estate – is the legal proceeding to establish a person’s inability to take care of their estate (financial assets and property). When incapacitation is proven, a conservator is assigned to manage and protect the estate of the protected person.
Both roles – conservator and guardian – may be assigned to one person or two different individuals or entities. Further, two individuals may be appointed to one position as co-conservators or co-guardians.
Read on to understand more about when and why a conservator or guardian is assigned. And the responsibilities of each role once legally ordered. Keep in mind that every state has its own laws on conservatorships and guardianships.
Petitioning for a Conservatorship or Guardianship
As mentioned above, guardianships/conservatorships are requested when power of attorney documents do not exist.
However, someone may also challenge an existing POA by filing for guardianship/conservatorship if they feel the POA agent is not acting in the best interest of the individual (the principal or grantor).
Someone concerned about the welfare of another may file a petition for conservatorship/guardianship with the probate court of the county where the proposed “protected person” lives.
This might occur when:
- A chronic illness such as Alzheimer’s becomes incapacitating for an older parent or relative
- A sibling is in an accident or a sudden illness results in their incapacitation
- A disabled child becomes an adult and remains in need of full or partial ongoing care
The required forms and filing instructions can be found on state or county probate court’s websites. They may also be obtained from the office of the probate court. While an attorney is not necessary, one is strongly suggested to help you understand and navigate all the legal requirements and rules.
A physician’s report that details the individual’s current physical and mental conditions and their opinion on whether they are mentally or physically incapacitated is often required at the time of filing.
Judges may also order a doctor’s visit and report in cases where the petition is contested.
Once a petition is filed, the court will schedule a hearing to hear evidence as to whether the individual is incapacitated and incapable of making health and/or financial decisions for themself.
All interested parties – the individual, their spouse, children, heirs, etc. – must be promptly informed in writing of the hearing date and time.
If found incapacitated, the court may order either a guardianship, conservatorship, or both, dependent on the individual’s level of need.
For example, if the protected person can handle most of their daily care, but needs help managing their finances, the court may grant a limited conservatorship, assigning specific financial duties only.
The guardian and conservator roles for a protected person are deemed fiduciary.
Fiduciary – a person or entity who has the power and obligation to act for another under circumstances which require total trust, good faith, and honesty. They must avoid “self-dealing” or “conflicts of interests” in which the potential benefit to the fiduciary conflicts with what is best for the person under their trust.
Becoming a guardian and/or conservator is a considerable responsibility and should not be taken lightly.
There are numerous court-assigned duties each role must perform to ensure the needs of the protected person are seen to and remain the focus of care.
Additionally, guardians and conservators are responsible for filing reports with the court and obtaining the court’s permission before performing specific actions, such as moving an individual or investing or selling their assets.
Can a Guardianship or Conservatorship be Contested?
The proposed “protected person”, their spouse or unmarried partner, or other family and friends may object to the need for a conservatorship itself, or to the specific individual filing to become the conservator.
Someone objecting to the guardianship/conservatorship at the minimum would need to attend the hearing to raise their concerns.
If they want to contest or block a conservatorship, they would need to file papers with the court, inform all interested parties, and attend the legal proceedings.
When more than one family member or friend petitions for the guardian/conservator role, the judge would follow preferences established by their state laws.
Typically preference is given to a spouse, registered domestic partner, adult children, adult siblings, or other blood relatives. Though the judge will select who they think is best suited for the job.
Conservatorship proceedings can cause much grief and heartache, straining relationships among family members and friendships. Especially when a protected person is unable to make their desires known or followed.
In cases where no suitable family member or friend is available to serve as a conservator, the judge may appoint a public or professional conservator.
The Role of a Guardian or Conservator of the Person
A legally appointed guardian makes decisions about the welfare of a protected person.
This typically includes living arrangements, healthcare needs, medical decisions, and other safety and long-term care decisions. In some states or cases, there may be limits on the choices a guardian can make without court approval.
Guardians assume responsibility for the supply of food, clothing, and personal necessities. And for ensuring protected individuals are receiving the proper care, maintenance, and support.
As a conservator of the person, they become the healthcare contact for the protected person. They will manage and authorize their medical, dental, optical, audiological, psychiatric, and psychological appointments and care.
Depending on state laws and the size of the person’s estate, a guardian may or may not have financial responsibilities.
The Role of a Conservator or Guardian of the Estate
A conservator is assigned when a protected person has substantial financial assets that need to be managed, bought, or sold.
This typically includes paying their bills, selling or buying vehicles, and real estate, managing investment accounts, preparing and filing income tax returns, and making other financial decisions on the protected person’s behalf.
Conservators are tasked with several duties and much responsibility. Some states may limit responsibilities or require court approval before some duties – such as selling off assets – can be carried out.
Depending on the size of the estate, a conservator may be required to secure a bond to protect the person’s estate. Or the court may restrict the amount of money a conservator has access to at one time.
For example, you may have access to only $10,000 of a $50,000 account in which to pay the person’s expenses.
Guardians of the estate will be required to account for all the financial transactions they perform on the protected person’s behalf.
Many states require a conservator to file a beginning financial inventory with the court. This is then followed by an annual updating of the person’s assets, including an accounting of all income, expenses, gains, losses, and any disposition of assets.
When Does a Conservatorship or Guardianship Role End?
The duties of a conservator and guardian end automatically upon the death of a protected person. However, an accounting of assets and a final hearing are typically required to close the case formally.
When a protected person is no longer incapacitated, a conservator and/or guardian may be removed. This typically requires filing a petition, attending a court case, and providing reports from one or more doctors attesting to the person’s competence.
Anyone can ask for the removal of an appointed guardian or conservator if the guardian/conservator:
- Is not performing their required duties
- Has been dishonest
- Is not acting in good faith
Or for some other reason appears incapable of continuing to serve in their assigned role.
In these cases, a new petition would also need to be filed by someone willing to perform the role going forward. Should there not be someone available to become the new guardian or conservator, the judge may appoint a professional to act on the protected person’s behalf.
Final Thoughts on Conservatorships and Guardianships
The best way to prevent the need for a conservator or guardian is to prepare the correct power of attorney documents as part of a sound estate plan.
A living trust may also prove beneficial to protect and manage your or a loved one’s financial assets should you or then be unable to do so.
Ensure your estate plan includes the proper power of attorney documents and speak with your parents and other family members to ensure theirs do too.
When an estate plan is not prepared a conservatorship, guardianship, or both is necessary to legally manage the care or finances of an adult who is incapacitated and unable to do so for themselves.
Guardians and conservators appointed by the court, are fiduciaries who ensure the protected person is properly cared for during their temporary or permanent incapacitation.
Taking on the role of a guardian or conservator should be carefully considered. These roles can be demanding, time-consuming, costly, and stressful. But they are also vital to ensuring a loved one is protected and cared for when they need it most.
Because each state has laws pertaining to guardianships and conservatorships, look to the state where the individual “protected person” lives for the specific rights and responsibilities of the protected person, conservator, and guardian.