What is... a conservatorship?

This is part of an on-going series of blog posts titled the "What Is..." series, where we attempt to explain, in simple terms, common estate planning terms and concepts. To read other posts in this series, click here.    

When we started contemplating this blog post, the world was a vastly different place. Now, in the time of COVID-19, we have unfortunately seen this issue come up many times. This is how it happens: George is 42 years old. He had a high fever and difficulty breathing, and was rushed to the hospital. He was intubated and suddenly isn’t conscious anymore. He didn’t create an estate plan in advance, and did not execute any powers of attorney. 

Who can pay his bills? Who can make medical decisions for him? 

In the absence of powers of attorney, a loved one would need to petition the probate court to become George’s conservator. A conservatorship proceeding protects a person who cannot care for himself or his property. The person making the request is asking the court to appoint him or her as the conservator to make those decisions on behalf of George. The conservator may only make decisions on George’s behalf that are in George’s best interest. 

What does the conservator actually do? 

There are three types of conservatorships: 

1) of the person - in which the conservator manages one’s personal needs (physical, medical, food, clothing, shelter)

2) of the estate - in which the conservator manages one’s financial affairs 

3) of both the person and the estate - in which the conservator does both #1 and #2.

Can conservatorships end? 

Yes. If George gets better, and can manage his own finances and healthcare decisions, the conservatorship is no longer necessary and it terminates. If George passes away, then the obligations of the conservator terminate as well. 

Why do you want to avoid a conservatorship? 

1. It is a court proceeding. This means it takes place in a public forum and it can take a long time to complete. 

2. It is time that your loved one is away from you. You and your loved one want to be together, not in court. 

3. The person who is appointed the conservator may not be the person you want to be making those decisions. 

4. It can be expensive. A court maintains oversight over a conservatorship to ensure that the person is being cared for and that the conservator is meeting fiduciary obligations. Court oversight means paying an attorney an hourly rate, and paying an accountant every year to prepare “accountings” to demonstrate to the court that the conservator is appropriately using George’s funds on George.

Typically, conservatorships occur when someone loses capacity suddenly and is unable to make decisions for him or herself unexpectedly. (See our previous post on incapacity). For example, George was 42 years old and didn’t anticipate being hospitalized. He was generally healthy, and hadn’t yet executed powers of attorney. 

What can I do to avoid a conservatorship? 

It’s actually fairly straightforward. We strongly recommend creating financial and healthcare powers of attorney so that your loved ones can avoid a court proceeding and you can name who YOU want to make these decisions for you. And if it’s appropriate, a living trust can also help in times of incapacity. Contact us today for a free consultation.

Everyone Needs an Estate Plan (Example 4)

Estate planning is much more than just death planning and giving away your stuff after you die. It’s also about planning for circumstances that you may not have anticipated. 

This post is the third installment in our "Everyone Needs and Estate Plan" series. If you missed Examples 2 & 3, click here to read it.

Example 4: You’re young (but over 18), single, and healthy. You decide that since you don’t have kids, and you haven’t made your first million--yet--that you don’t need an estate plan. On your way to work, someone is texting while driving, doesn't see you, and rams right into you. You're severely injured, and the paramedics are called to the scene. You’re taken to the hospital, and you lay there incapacitated. You're still alive, but you lack the ability to make your own decisions or to handle your own affairs. We’re essentially in Example 1, except that you don’t have a spouse here. Your parents and siblings fly in from out of town, and they want to be involved with your care, they want to alert your boss as to what happened, and they also want to sue the negligent driver who caused your injuries. Unfortunately, all they are given is the bad news that they have to go to court to obtain the appropriate legal authority to handle any of your affairs on your behalf.

You're an adult. No one can make decisions for you... except you. Even though your relatives are here--your parents, at that--and they likely have your best interests in mind, no one has the legal authority to handle your affairs for you absent your permission (power of attorney) or court order (conservatorship).

Hyperbole aside, estate planning is about crisis planning before there is a crisis. Once a crisis occurs--be it a bad reaction to medication, or plain bad luck--it’s often too late to have the proper tools in place to face that crisis head-on. In all likelihood you’ll need to spend a great deal of time and money acquiring the right tools to deal with the crisis. It means more stress on top of an already stressful situation for your loved ones.

As you can see, estate planning has little to do with your net worth or your age. It is important for everyone at any age. If you’re over 18 years of age, you absolutely need an estate plan. If you have a family, especially minor children, that need for an estate plan merely increases. To determine what kind of estate plan you and your family needs, please contact us for a free initial consultation.