What Is Conservatorship?
A conservatorship is a court order appointing someone to manage the affairs of another person. An incapacitated person may be under a conservatorship, but a conservatorship can also be established for a person with a developmental disability.
The court order describes what authority the conservator has over the affairs of the incapacitated person. They are legally bound to make decisions with the best interest of others in mind, not their own interests.
They are not, however, responsible for the individual’s personal needs (hygiene, clothing, etc.). The extent of authority given to the conservator is determined by the court order.
Difference Between Conservatorship and Guardianship
A conservator will typically manage the person’s finances and medical decisions.
While a guardian is appointed for a minor who does not have the legal capacity to contract. They typically manage the person’s living arrangements and day-to-day schedules.
Individual vs Organization Conservatorship
A conservatorship can be established for an individual or for a business. This distinction is very important because different laws apply to each situation.
An individual conservatorship requires that the petitioning party have no history of mismanagement, abuse, neglect, etc.
An individual conservatorship is normally limited to a specific list of tasks and responsibilities that will be monitored regularly by the court.
For example, an individual may only be responsible for handling medical decisions while another person manages all financial aspects.
A business conservatorship must show that the company is not likely to be a target for embezzlement or other financial mismanagement by the proposed conservator.
A business conservatorship is usually permanent and has a wide range of authority to oversee all aspects of the business.
In most cases, it is established for a corporation rather than an LLC or sole proprietorship. The court will monitor the business closely to ensure that it is properly managed.
Types of Conservatorships
There are three main types of conservatorships:
A limited conservator has authority over specific aspects of an individual’s life only.
For example, they may be responsible for medical decisions but not financial ones. Limited conservatorships are usually temporary and end when the court order expires unless further extended through a hearing with a judge.
A temporary conservatorship is usually valid for a period of one year and can be extended or converted into a permanent conservator.
For example, if a person is hospitalized for an acute condition that may cause them to become incapacitated in the future, a temporary conservator can be appointed to manage their affairs.
A full conservatorship gives the appointed individual complete authority over all aspects of the incapacitated person’s life.
What this means is that they may legally make any and all decisions for them such as where to live, what to eat, how their money is spent, etc. A full conservatorship can be temporary or permanent depending on the circumstances.
A full conservatorship may be necessary for someone with a developmental disability who is unable to make decisions for themselves and does not have a guardian.
If the incapacitated individual has a living parent or spouse, they can serve as their legal guardian and handle all of their affairs even if the court does not establish full conservatorship authority.
Duties and Responsibilities as a Conservator
The following are the duties and responsibilities of a conservator:
- Make financial decisions that are in the best interest of the individual who has been deemed incapacitated. That means staying away from risky investments or spending large sums on unnecessary things.
- Make medical decisions if the incapacitated person cannot do so because of illness, injury, coma, or other similar conditions.
- Sell real estate and other property that is not needed by the incapacitated person and distribute the money as they see fit to benefit that individual’s well-being.
- Maintain the individual’s financial records so that they are accessible to others.
- File regular reports with the court about how things are going financially and provide documentation if anything goes wrong financially.
- Be responsible for all aspects of the incapacitated person’s life, not just finances. That means making sure their living conditions are safe and they have proper medical care.
- Another important duty is to protect the incapacitated person from exploitation or other forms of abuse if they cannot handle things themselves.
Who Is Eligible to Become a Conservator?
If someone has not been convicted of a crime that would make them ineligible to be a conservator, anyone is eligible to petition the court for this status. This can be an individual, family member, spouse, friend, or even another business.
The most important thing is that they are willing and able to handle this responsibility. There is no age requirement, but the conservator must be able to show that they are financially solvent.
Advantages and Disadvantages Of Being a Conservator
- Being a conservator comes with little responsibility other than following the wishes of the court and doing what is in the best interest of the incapacitated person.
- It comes with a large amount of legal protection from lawsuits or being charged with financial mismanagement, neglect, etc. This is because the conservatorship is monitored very closely by the court.
- It can be emotionally draining to deal with an incapacitated person who cannot communicate well, especially if it is a family member or spouse.
- The amount of work that has to be done on behalf of the incapacitated person may be overwhelming at times.
- It can be difficult to deal with the court system and its strict rules if there are problems that arise.
- The money made is taxed as income, so it will reduce the amount of money the conservatory is able to keep after paying taxes on it.
- If someone is not financially solvent, they may not be able to afford the legal fees associated with this process.
Problems That May Arise During a Conservatorship and How to Fix Them
The conservator has the power to prevent this by following all legal guidelines imposed on them by the court and being aware of any red flags that would indicate it is happening.
This can be fixed by immediately filing a petition with the court to have another person appointed conservator until the original conservator is able to handle things again.
Not Following Court Orders or Neglecting Their Duty as a Conservator
If they do not follow all of the guidelines and rules set in place by the state, they will be charged with a crime and possibly face incarceration.
Falling Out With Family Members Because of This Responsibility
This is a very real possibility, but there is no obligation for someone to become a conservator. They should only do it if they are willing and able to handle all of the responsibility that comes with this position.
In addition, they may be compensated financially, though the amount varies from state to state.
Conservatorship is a legal status that gives someone the power to make decisions on behalf of another person who is unable to handle certain aspects of their daily life.
However, this does not mean they become an object or possession of the conservator; they still maintain all rights as human beings and cannot be controlled by the conservator.
About the Author
True Tamplin, BSc, CEPF®
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.