When a loved one becomes unable to manage their financial affairs due to age, illness, or disability, it can be a stressful and uncertain time. Conservatorship is one legal tool families can use to help protect the person’s financial interests and assets.
What Is a Conservatorship?
In a conservatorship, the court appoints a fiduciary to make financial decisions and manage the assets of a person under a disability. Unlike, for example, a trust, a conservatorship requires periodic reporting and court oversight of how the assets of the protected person are being utilized for his/her benefit.
A conservatorship differs from guardianship, which deals more broadly with personal, medical, and lifestyle decisions. A person may have both a guardian and a conservator, depending on their needs.
Who Needs a Conservator?
A conservatorship may be appropriate when someone:
- Is experiencing cognitive decline (e.g., Alzheimer’s or dementia)
- Has a mental illness that affects their ability to manage money
- Is developmentally disabled and entering adulthood
- Has suffered a brain injury or other incapacitating event
- Is being financially exploited
Whether a person needs a conservator in addition to a guardian often depends on the nature of his/her assets and income. Many elders have limited income that is used exclusively to pay for nursing home care, which generally does not require a conservator.
Frequently, a conservator is appointed temporarily to allow for a specific action – such as a Medicaid application – and terminated once the action is complete.
An attorney can help you decide whether a conservator is needed in your particular situation.
When does a Minor Need a Conservator?
Many parents incorrectly believe that they are legally permitted to manage assets on behalf of their children. Unfortunately, this is not always the case, and parents find themselves needing to petition to be appointed conservators for their own child. For example, we’ve helped families where:
- A minor is receiving an inheritance;
- A minor is the beneficiary of a life insurance policy; and
- A minor is on the deed to the property, and the parents decide they want to sell the property.
Fortunately, these types of cases are often resolved (relatively) expeditiously through a limited process that provides oversight of a transaction and movement of funds to a protected vehicle, such as a trust.
Who Can Be a Conservator
A conservator is a fiduciary, meaning they must act in the protected person’s best financial interest. Duties include:
- Paying bills and managing bank accounts
- Protecting and investing assets
- Filing taxes
- Applying for public benefits (if applicable)
- Keeping thorough records
Often, the role of conservator is filled by the same person as the guardian, but it is not required. Depending on the complexity of the estate to be managed, some families choose to have more than one person in the role, or even engage a professional to act as conservator or co-conservator.
It is prudent to consider having counsel in any conservatorship. If you are appointed conservator, as fiduciary, you are personally responsible for the sound management of the protected person’s assets.
Petitioning for Appointment of a Conservator
The process of appointing a conservator requires filing a Petition for Appointment of a Conservator with the court. Often, such petitions are not contested. However, even in an uncontested case, the petitioner still must establish that the person to be protected requires a conservatorship. This is generally done by filing a Medical Certificate or a Clinical Team Report (depending on the nature of the disability), completed by the protected person’s medical providers, setting forth the person’s limitations specifically as they relate to the ability to manage their own assets.
Conservatorships may be contested, either because an interested party or the proposed person to be protected doesn’t believe a conservatorship is warranted; because there is a dispute about who should be appointed conservator, or; both! Contested conservatorships are complex, and where a large estate is involved, can seem like a lifetime will contest. The Probate and Family Court offers a specialized forum – the Fiduciary Litigation Session – where some contested conservatorships are heard.
Ending a Conservatorship
A conservatorship ends when:
- The protected person regains capacity and petitions for removal
- The protected person no longer has income and/or assets requiring management
- The protected person dies
- The conservator resigns or is removed (with court approval)
As part of the closing process, the conservator will file a final accounting that must be approved by the court.