What happens if you become mentally or physically incapacitated? Who will manage your financial affairs, including paying your bills, running your business, sign your tax return and pay your income taxes? Who will confer with your doctors on your medical care and treatment? Who will make medical decisions on your behalf when you are unable to express your wishes with regard to medical care? These are all questions which are covered in a comprehensive, well-prepared estate plan, but what happens if incapacity strikes you before you’ve executed your estate planning documents?

Unfortunately, this is a question we have had to confront on more than one occasion. When tragedy strikes and a person becomes incapacitated, whether it be due to an accident, a stroke, or even as the result of a criminal act by another person, the incapacitated person may lack the legal capacity or ability to create a valid estate plan. If the person lacks the capacity to create a legal document, the only alternative may be to seek a conservatorship over the person and/or the person’s estate to ensure the well-being of the incapacitated person and to properly manage the person’s finances.

Conservatorships Defined

A conservatorship is established after a judge determines that a person (called the “conservatee”) can no longer oversee their finances or are unable to take care of themselves. The judge will then appoint another person or an organization (called the “conservator”) to handle the conservatee’s care or finances, or both. There are two types of conservatorships: 1) of the person; and 2) of the estate.

A conservator of the person arranges for the conservatee’s care and protection, decides where the conservatee will live and make decisions regarding the conservatee’s health care, food, clothing, housekeeping, transportation and recreation. A conservator of the estate is in charge of handling the conservatee’s finances. The conservator of the estate takes an inventory of all of the conservatee’s assets, ensures that the conservatee’s bills are paid, taxes are filed and paid, makes a plan to make certain the conservatee’s financial needs are met, invests assets, and maintains financial records. It is permissible and often common for the conservator of the estate to be the same individual or organization as the conservator of the person.

Conservatorships can be limited or permanent. A temporary conservatorship may be appropriate for a limited period of time, usually 30 - 90 days to handle a temporary or emergency situation. As a example, an individual may develop a mental or physical condition which renders him unable to take care of himself at home and is in an unsafe environment. A temporary conservator may be appointed to make arrangements for caregivers, in home health care, or movement to a care facility. If the conservatee recovers sufficiently, the temporary conservatorship can be terminated or on the other hand, a permanent conservator may have to be appointed.

Conservatee’s Rights

It is a common misconception that the conservatee loses all rights upon the court appointing a conservatorship over the conservatee. The conservatee actually retains the following rights:

  • To make or change their will or estate plan (unless the judge grants this right to your conservator)
  • Be represented by a lawyer
  • Receive notice of all hearings related to the conservatorship and attend such hearings
  • Get married
  • Receive mail
  • Control their own spending money (if the judge allows for an allowance)
  • Ask the judge to change conservators
  • Ask the judge to end the conservatorship
  • Vote (unless the judge determines they are unable to do so)
  • Make their own health-care decisions (unless the judge determines they are not able to do so)
Establishing a Conservatorship

The first step in establishing a conservatorship involves filing a Petition for Conservatorship. A Petition for Conservatorship can be filed by a friend or relative, professional conservator, nonprofit agency, or public official. The proposed Conservator must be bondable, meaning that this person or organization should be trustworthy such that a surety company is willing to vouch for their behavior. Throughout the entire process of conservatorship for an individual, the conservator needs to have an attorney represent them.

California Probate Code Section 1801(a) stipulates that it must be demonstrated that the individual who would be the conservatee is no longer able to care for themselves, specifically decision making that involves food, clothing, residence, and maintaining their own physical and mental health.

Furthermore, California Probate Code Section 1801(b) declares that it must be demonstrated that the proposed conservatee is no longer able to oversee her or his finances and is at risk of falling prey to those willing to defraud or otherwise negatively influence him or her.

The person or entity filing the petition for conservatorship must also state alternative methods for achieving the equivalent of a conservatorship and why these other methods do not measure up or are otherwise unsuitable. Alternate remedies include assistance of some sort accepted voluntarily by the individual, other legal remedies such as limited, special, or general power of attorney, creation of a trust, or drawing up of an advance health care directive.

Once the petition is filed with the court, the court will appoint a court investigator to interview the proposed conservatee and report the investigator’s findings back to the court. The court will then set a hearing on the petition where the judge will determine whether or not to grant the petition for conservatorship and if a conservatorship is warranted, what powers to grant to the conservator.

A conservator of the estate must file an Inventory and Appraisal within 90 days of becoming conservator and an annual accounting one year after becoming conservator, then every two years thereafter.

Conservatorship Terminates on Death of Conservatee

A conservatorship terminates on the death of the conservatee, when a judge terminates it because it is no longer needed, or if a judge appoints a different conservator. If the conservatorship is being terminated because of death, the conservator will pay any expenses of the conservatee’s last illness and is responsible for the preservation of the conservatee’s estate until it is delivered to the personal representative of the estate or otherwise lawfully distributed

Disadvantages of a Conservatorship

Conservatorship proceedings are often criticized as being costly, time-consuming and inflexible. The costs associated with a conservatorship include court costs and filing fees, court investigator costs, premiums for the conservator’s surety bond, compensation for the conservator and attorney’s fees. California law requires court approval before a conservator takes certain actions; if you are unsure of whether you are authorized to act, consult your attorney.

Conservatorships are public proceedings, therefore the conservatee’s assets, income and expenses are public record. The conservatee’s personal information, detailing why the conservatorship is warranted and including the conservatee’s medical information supporting the need for the conservatorship, is listed on a form entitled “Confidential Supplementary Information” and is not part of the file available for public viewing.

Avoiding Conservatorship

The need for a conservatorship can be avoided with advance planning. If your estate planning documents in order, your documents will provide a thorough and effective plan for incapacity. A comprehensive estate plan generally consists of more than just a trust and/or a will; you will also have a General Durable Financial Power of Attorney and an Advance Health Care Directive. These two documents provide a plan for incapacity and are discussed in further detail below.

General Durable Financial Power of Attorney: Even if you have a living trust, and hold all or most of your assets in your trust, you should also have a financial power of attorney which is durable, meaning it is still valid even if you subsequently lose capacity. The power of attorney will authorize the agent named in the document to manage your financial affairs, including transferring assets into your living trust, signing your tax return, negotiating with insurance companies and financial institutions on your behalf, and making other important financial decisions on your behalf.

Advance Health Care Directive: This document allows you to appoint an agent or agents who will make medical decisions on your behalf, effectively eliminating the need for a conservatorship of the person. This document will also allow you to specify in advance your preferences regarding medical treatment. For example, you could specify that your primary care physician is to be consulted regarding your treatment, or you could specify that you do not want to be kept permanently dependent on life support if you are in a persistent vegetative state.

Seek Experienced Legal Counsel

Conservators are fiduciaries and can be held personally liable if they fail to meet required standards of conduct and care. If you need assistance in establishing a conservatorship over an incapacitated loved one, seek experienced legal counsel. The attorneys at the San Diego estate planning firm of Law Offices of Scott C. Soady, APC have extensive experience in California conservatorship matters. We welcome your inquiry and invite you to contact us by e-mail, or call us toll-free at (877) 435-7411 within California, or (858) 618-5510 outside of California to schedule a free in-house consultation.

San Diego Estate Planning Lawyer Blog: Conservatorship
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