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Conservator Services




LeaAnne Williams, CPA offers conservatorships to their clients.  You may ask what is the difference between a conservator and a guardian.

Guardians and Conservators

The traditional distinction between guardians and conservators is as follows:

  • Guardians - A guardianship is a legal right given to a person to be responsible for the food, health care, housing, and other necessities of a person deemed fully or partially incapable of providing these necessities for himself or herself.

  • Conservators - A conservatorship is a legal right given to a person to be responsible for the assets and finances of a person deemed fully or partially incapable of providing these necessities for himself or herself.

In some jurisdictions, a conservatorship may be referred to as a "guardianship of the estate", or by some similar alternative name.

When Is A Conservatorship Required

It may be necessary to petition a court to appoint a legal guardian for persons:

  • Who have physical or mental problems that prevent them from managing their own financial affairs;

  • Who have no person already legally authorized to assume responsibility for them; and

  • Where other kinds of assistance with financial management will not adequately protect them.

How is a Conservator Appointed?

The precise procedure will vary to some degree from jurisdiction to jurisdiction. The typical steps are as follows:

  1. The person seeking the appointment of a conservator files a petition with the probate court for the jurisdiction where the allegedly legally incapacitated person resides. This petitioner is often a relative or can be a trusted financial professionl, like a CPA.  Sometimes it can be better to pay an outside professional to avoid any conflicts within a family.  A petition is ordinarily accompanied by medical affidavits or other sworn statements which evidence the person's incapacity, and either identifies the person or persons who desire to be named conservator or requests the appointment of a conservator.

  2. If a conservator is appointed, the judge will issue the conservator legal documents (often called "letters of authority") permitting the conservator to act on behalf of the legally incapacitated person.

A conservator will ordinarily receive compensation, subject to court oversight, for performing duties for the estate. This is charged on an hourly basis, and is ordinarily paid from the estate of the legally incapacitated person.  The main benefit is your loved one's financial affairs has a competent professional responsible for their affairs with the court overseeing the conservator.

What Are a Conservator's Duties?

The first duty a conservator has is to take an inventory of the legally incapacitated person's assets, and to report those assets to the court.

If the conservator will be paying money on behalf of the legally incapacitated person, it will be necessary to open a special checking account reflecting the conservatorship (e.g., in the name of "John Doe, as Conservator for the Estate of Jane Smith"). Courts often require that the checking account return the actual physical checks after they are processed, and that those cancelled checks be maintained as part of the conservator's records.

The conservator will be responsible to account for all expenditures, and for the assets of the estate, typically on an annual basis or more frequently if ordered by the court.

If the legally incapacitated person has assets that must be maintained, or which are not in use, the conservator may seek court permission to rent or sell those assets. For example, if the legally incapacitated person has a home but will never be able to return home due to illness or disability, it may be wise to sell the home. If the legally incapacitated person is expected to return home, but not for an extended period of time, it will be necessary to maintain the home, and in some circumstances may be appropriate to rent the home during the period when the legally incapacitated person is absent. Similarly, rather than leaving a motor vehicle parked in a garage for years, it may be in the best interest of the legally incapacitated person to sell the vehicle before further depreciation or deterioration from non-use.

If the legally incapacitated person is capable of participating in financial decisions, the conservator is ordinarily required to permit the legally incapacitated person to participate to the extent he or she is able. In some circumstances, a court may appoint a conservator to perform a certain set of tasks which are beyond the ability of the legally incapacitated person, while permitting that person to manage his or her own affairs for other financial tasks which remain within his or her ability.

A conservator is typically required to post a bond, unless the requirement is waived by the court. In most jurisdictions where bond is required, waivers are common.

The Purpose of Court Supervision

The court supervises the conservator's actions by requiring that permission be obtained in advance of certain major transactions (such as the sale of a legally incapacitated person's home), and through annual accountings, in order to ensure that the legally incapacitated person's assets are being properly managed, bills are being paid, nobody is misappropriating funds, and the estate is not being wasted.

How Can a Conservatorship Be Ended?

A conservatorship can be terminated by the court which created it. This ordinarily happens if the legally incapacitated person recovers from the incapacity that necessitated the conservatorship. A particular conservator's role may be terminated by the court or by resignation, in which case the court will ordinarily appoint a successor conservator to take over management of the legally incapacitated person's assets. A conservatorship also ends upon the death of the legally incapacitated person.

 

 

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