A conservatorship may not be required if the incapacitated individual has in place one or more of the following:
Revocable living trust. With a revocable living trust, the individual can appoint a trustee to manage his or her financial affairs and thus can avoid the need to appoint a conservator of his or her estate. If he or she is still competent, he or she may still be able to establish a living trust.
Durable Power of Attorney for Asset Management. A durable power of attorney allows an individual to delegate to another the power to make financial transactions on her behalf if she is unable to do so herself. Again, the individual must be competent to establish a durable power of attorney.
Durable Power of Attorney for Health Care. An individual can name an agent to make health care decisions on his behalf in the even he can no longer do so for himself, including the decision to withdraw or continue life support. As with a living trust and durable power of attorney for asset management, a person must be competent to execute a durable power of attorney for health care.
Joint tenancy property. While any joint tenant may make decisions regarding property held in joint tenancy, significant risks make this form of ownership a poor choice for the purposes of asset management. In particular, a joint tenancy allows any joint tenant access to the funds, so any of them can withdraw all the funds. In addition, there can be adverse tax and estate planning consequences as a result of creating a joint tenancy.
Management of community property by a spouse. A spouse who is competent may manage the community property on behalf of the spouse who is incompetent without the need of a conservatorship. Still, the well spouse must seek court approval in order to conduct some transactions on behalf of the incapacitated spouse, such as sales, borrowing money, leases, and gifts of property.
Establishment of representative payee. It is possible to have a substitute payee appointed for an incapacitated person who receives only governmental benefits, i.e., Social Security or SSI. The substituted payee, a trustworthy relative or friend, can manage that person’s funds without the need of obtaining a conservatorship.
Do I need a conservatorship to place my relative in a nursing home?
It depends—if a person does not object to going into a nursing home, a relative may sign the admission agreement as an agent or as a “responsible party” to place a person in a nursing home. That person may not make medical care decisions on behalf of the individual unless he or she has authority to do so as an agent under a durable power of attorney for health care or as a court-appointed conservator. However, if a person objects or is unwilling to go to a nursing home, a conservatorship is required.
How is a conservatorship established?
A relative, friend or a public official may file a petition to ask the court to appoint a conservator of an individual. The petition must contain facts explaining why the individual cannot manage his financial affairs and/or make decisions concerning his personal care.
Once a petition is filed with the court, a court investigator is appointed to interview the proposed conservatee. The investigator reports back to the court with an opinion on whether or not the appointment of a conservator is justified.
The petition is set for hearing before a judge and the conservatee must appear in court unless medically unable to do so. The judge will decide, based on the petition, the investigator’s report, and any evidence taken during the hearing, whether or not the conservatorship is required and what types of special powers should be granted to the conservator.
When is a conservatorship needed?
A conservatorship may be needed when someone is not able to manage his or her own financial affairs and/or personal care, and there is no alternative method of delegating these duties to another (either through a durable power of attorney, living trust or other means).
Frequently Asked Questions About Conservatorships
What are the advantages of a conservatorship?
A conservatorship allows for the management of an incapacitated person’s affairs when he or she does not have an alternative mechanism in place to do so.
While the court supervision makes conservatorship more costly and time consuming than other methods of management, it offers more protection to the conservatee because the conservator must file an inventory which lists all the property of the conservatee and must file periodic accountings with the court reporting all transactions involving the conservatee’s assets.
Another advantage to a conservatorship proceeding is that it provides a structured method to assist an incapacitated individual who may be reluctant to accept such assistance.
What are the disadvantages of a conservatorship?
As with many court supervised proceedings, there may be substantial costs in establishing it, such as court filing fees, legal fees, investigator’s fees and conservator’s fees. In addition, it is a public proceeding and information on the conservatee's assets, income and expenses become a public record.
Also, it can be a cumbersome to manage a person’s financial affairs since the conservator must return to court for approval of certain transactions, such as the sale of real property, borrowing money, setting up a trust, etc. These formal court procedures require additional attorney’s fees and can create delays in completing these transactions.
What is a conservator of the estate?
A conservator of the estate is responsible for handling the financial affairs of the conservatee, with the power to collect all the conservatee’s assets, pay bills, make investments, etc. Even so, court authorization is required before the conservator can conduct major transactions, such as the purchase or sale of real property, borrowing money and gifting of assets.
What is a conservator of the person?
A conservator of the person is responsible for making decisions about personal matters for the conservatee, including decisions about medical care, food, clothing, and residence. Unless specifically authorized by the court, the conservator may not place the conservatee into a locked mental institution against his or her will.
What is a probate conservatorship?
A court proceeding in which a judge appoints someone (called a conservator) to manage another person’s (called the conservatee’s) financial and/or personal affairs. Once a conservator is appointed, the conservatee generally has limited power over his or her own financial and personal care decisions.
What is an LPS (Lanterman-Petris-Short Act) conservatorship?
An LPS conservatorship is a court proceeding designed for persons with serious mental disorders, or who are impaired by chronic addictions, such as drugs or alcohol. If the judge determines an individual is “gravely disabled” he or she may be involuntarily committed to a mental institution.
Unlike a probate conservatorship, an LPS conservatorship must be initiated by the county government—a spouse or other relative cannot petition for an LPS conservatorship.
How can a conservatorship be used to plan for Medi-Cal benefits for a person who is incapacitated?
A conservator can petition the court for approval of appropriate Medi-Cal planning transactions such as purchasing a home or other real property, or transferring the family home or other assets to the conservatee’s spouse or child, where appropriate.