Increasingly, attorneys encounter the following situations:
- Seniors come to us, often brought by their children or children-in-law, when mental incapacity has set in, and although they have family members who are willing and able to take care of them, the seniors do not have the necessary delegation documents in place to empower these helpers as their agents.
- Seniors have documents in place, but the people named are dead or no longer available, willing or appropriate to serve.
- The people who the senior trusted and anticipated would be appropriate have become exploitive and abusive to them.
- Seniors have been conned into paying for, or agreeing to pay for, fraudulent products and/or services.
- Seniors may have excellent delegation documents in place, but themselves are uncooperative or noncompliant in taking the steps needed to ensure their own safety and care.
The solution for each of the above scenarios may be to establish a guardianship and/or conservatorship over the senior, if he or she meets the applicable standard of incapacity.
Terminology varies from state to state, but in general, guardianship (sometimes called “guardianship of the person”) applies to probate court appointment of a fiduciary (“guardian”) to make decisions in regard to the protected person’s personal care. The protected person may be called a “ward” under some state laws, but that term is being phased out as unfavorable. A guardian generally does not have control of the protected person’s finances, although state law or the specific terms of the guardianship may authorize the guardian to hold small amounts of the protected person’s funds if no conservator has been appointed and the protected person does not have a durable power of attorney.
Conservatorship refers to probate court appointment of a fiduciary (“conservator”) to administer the finances and assets of the protected person. In some states, conservatorship may be called “guardianship of the estate.” Conservatorship is much like trusteeship, although the powers of and restrictions on the conservator are defined by statute and regulation, rather than a voluntary trust agreement or trust declaration, and are typically are much less flexible than the powers authorized for trustees.
Conservatorships are also analogous to durable powers of attorney. However, one of the key differences between conservatorships, trusts and durable powers of attorney is that conservatorships are court-supervised. The conservator must annually present for court approval a plan showing the anticipated expenditures to be made on behalf of the protected person. Additionally, conservators must submit an annual report to the Court showing how the protected person’s money was spent during the preceding year. The courts strictly scrutinize these reports to ensure that the protected person’s funds are being spent solely for their use and benefit. Further, the courts require the conservator to obtain a bond to insure his or her fidelity to properly administer the protected person’s assets and income.
Seniors Can Keep Some Decision-Making Power
There is a growing movement nationwide to maximize decision-making by adults who are under guardianship and/or conservatorship. Consequently, the probate code generally imposes a standard that the protected person’s rights are to be removed only to the minimum degree necessary to protect him or her. As a result, when a protected person is capable of making some decisions safely and prudently regarding his or her living conditions, care, or finances, his or her decision- making authority in these areas will be preserved as long as possible. Keeping seniors involved in their care and financial decisions also helps to keep them engaged and active.
Although attorneys correctly advise clients to engage in estate planning to avoid unnecessary guardianships and/or conservatorships, there are many situations where these court-supervised procedures are appropriate and beneficial. In difficult or challenging cases, court supervision may be necessary to impose financial accountability and to bring about sound decisions for the care of a protected person.
If you have any questions or would like to discuss guardianships or conservatorships further, please feel free to contact us at 678-319-0100.