What is a Conservatorship?

Conservatorship refers to a United States' legal concept where a court judge gives an individual the authority to manage the financial and personal affairs of an incapacitated person. The conservators establish and monitor the physical care of the disabled person, manage his or her living arrangements, and taking care of the person's finances. In other words, conservators are expected to act in the best interest of their conservatees and or wards.

How Does a Conservatorship Work?

A Judge upon hearing the case usually appoints a responsible organization or a person to become a conservatorship for the adult who is incapacitated. The adult may need a conservator as a result of him or her being psychotic, mentally ill, suicidal, unable to make financial, legal, or medical decisions on his or her own. An individual who is under a conservatorship is called a conservatee, a term that can refer to an adult. There is also what we call the ward. The term can refer to a minor who is under guardianship. It is important to note that conservatorship can also apply to organizations and corporations. Note that where the incapacitated person has already appointed a person and signed durable powers of attorney for health care and finance, then selecting a custodian won't be necessary. The person mentioned in those documents will automatically assume the conservator's duties. However, in case there were no prior plans as far as conservatorship is concerned, then family members will seek the court's assistance to appoint one person to become a guardian or a conservator. The legal appointment of this process is called probate conservatorship, and the law(s) governing it varies from one state to the other.

How a Court Determine Mental Incapacity

There are various procedures that a court uses to determine the mental incapacitation of a person. However, the process varies from one state to the other. The following are typical steps used in many courts across the American's states: 

Step one: Any interested person can file a petition questioning a person's mental capacity. The petitioner can be a friend, professional advisors, or family member of the conservatee. 

Step two: The court appoints a group of professionals, including physicians, social workers, nurses, to examine the incapacitated person. A court may approach the petitioner's attorney to select the professionals to do the examination. 

Step three: The court appoints an attorney who will represent the incapacitated person during the hearing of the case. 

Step four: The committee meets and examines the person in question. Each member of the committee selected to investigate the person will personally meet with the person in question. 

Step five: The committee compiles the information they have collected from their observations and comes with a written report about the physical and mental status of that person. 

Step six: The incapacitated individual's attorney will also have to meet with him or her individually and inform the person about the proceedings of the court by reading for him or her petition. 

Step Seven: The attorney prepares a detailed report about the person in question and files it in court. The report should consist of a statement stating whether the attorney believes that the incapacitated individual understood the meeting's purpose, including the petition's content. 

Step Eight: The judge will assess the petition, attorney's report, and the findings of the committee. He will also consider the expert's committee report as well as the attorney's observation. 

Step Nine: A hearing is held where the parties involved in the case make their arguments either for or against the alleged incapacitated person. The court usually appoints an attorney for the person in question. Also, all the interested parties are required to appoint their attorneys who must attend the hearing. To be able to make the right decision, a judge usually has questions for some or all of the attorneys to clarify some statements in the report. If the incapacitated person is too ill, he or she can skip the hearing since the attorney will be there to represent him or her. 

Step Ten: After the hearing, the judge gives a final judgment on the case. The judge will state whether the person in question is totally or partially incapacitated, or is competent. After combining the written findings of all the parties' testimony and the medical committee's conclusions, they reach a final decision regarding the person's overall mental capacities or disabilities. 

The Goal of the Court 

What the judge typically looks out for is the least restrictive way of assisting the person in question. If the status of incapacitation is partial, then a judge may appoint a conservator limiting this persons purpose to payment of bills and or overseeing that person's investments. Where a person is completely incapacitated, the appointed conservator becomes the legal custodianship of this person's finances and care. The conservator can be an institution or a person depending on the situation on the ground.

Types of Conservatorship

A conservatorship may involve an individual's care or his or her finances. There are several of them, and they are as follows:

• Estate's conservatorship: This is where another person is given the authority to manage the finances of an incapacitated person.
• Person's Conservatorship: This is where the court appoints a person to handle the lifestyle decisions and personal health of an incapacitated person. For instance, if an older adult can no longer live on his or her own, another person may be given the right to care and make decisions on his or her behalf. In this case, the conservator reserves the right to take this person to a nursing home where he or she can receive much-needed care.
• Limited Conservatorship: This is where a court grants an individual the authority to make decisions for an adult who is disabled or is unwell to make sound decisions. The adult can be parents or other relatives. Limited means that the conservators do not make all the decisions. The adult disabled person still retains some authority to make decisions. For example, he or she can decide where to live but cannot be left to handle financial matters. Decisions on the issue to do with funds will remain with the conservator.
• Joint Conservatorship: This is where a court appoints two individuals as conservators. For example, a court may appoint a daughter and a son to be a parent's conservator.

Though conservators are mostly family members, we also have organizations that can handle all the incapacitated person's decisions and finances at a fee. This type of arrangement applies mainly where an incapacitated person has no family. This type of conservatorship is called sole managing conservatorship, and it applies to cases involving child custody. This type of conservatorship is not relevant to adults' conservatorship.

When is a Conservatorship Granted?

For a court to grant a conservatorship, the adult in question should be, to a reasonable extent, not able to make his or her own decisions. It might occur in the following situations:

• An abrupt illness resulting in legal incapacities like going into a coma
• A person who has become an adult and needs continuous care that they can't manage themselves e.g., a person's cerebral palsy condition
• A chronic illness that results in incapacity like when a person's diagnosis shows he or she is suffering from dementia

Conservatorship vs. Guardianship

Generally, guardianship and conservatorship happen to be interchangeable. However, when it comes to the law, the two terms are quite different. The term guardianship refers to the appointment of an entity or a person to take charge of the medical and physical care of an incapacitated person. On the other hand, a conservatorship is where a court grants a conservator the authority to manage the incapacitated person's financial affairs. A person with limited capacity may be a minor or an adult who can't take care of oneself or make sound decisions.

Why is Conservatorship is Important?

The conservatorship has the following benefits: It provides one with an avenue where he or she can legally manage another person's finances as well as taking care should that person become incapacitated. The named conservator ensures that the person receives care and protection. When a person establishes a living trust, it can help to protect his or her finances. It means that the funds will be under the custodianship of a trusted person, should the owner of the funds be unable to manage them personally.

Related Topics

• Succession Planning
• Chartered Trust and Estate Planner
• Conservatorship
• Probate
• Cy Pres Doctrine
• Exordium Clause
• Non-Contestability (No Contest) Clause
• Bequest
• Per Stirpes
• Ademption
• Abeyance
• Elective Share
• Escheat
• Qualified Domestic Relations Order (QDRO) 
  
• Declaration of Trust
• Uniform Gifts for Minors Act
• Acceptance of Office by Trustee
• Beneficial Interest
• Asset Protection Trust
• Bare Trust
• Blind Trust
• Charitable Lead Trust
• Charitable Remainder Trust
• Charitable Remainder Annuity Trust
• Charitable Gift Annuity
• Credit Shelter Trust
• Discretionary Trust
• Generation Skipping Trust
• Grantor Trust Rules
• Living Trust
• Inter Vivos Trust
• Revocable Trust
• Irrevocable Trust
• Irrevocable Income-Only Trust
• Qualified Domestic Trust (QDOT)
• Qualified Terminal Interest Protection Trust (QTIP)
• ABLE Account
• Accumulated Income Payments (Canada)
• Charitable Split-Dollar Insurance Plan
• Coverdell Education Savings Account