What is Guardianship and Conservatorship?
A few weeks ago, a woman called our office in a panic asking if she could set up power of attorney documents to manage her mother’s finances. Her mother was just placed in an assisted living facility due to advanced Alzheimer’s. Unfortunately, her mother had not set up any estate planning documents. We had to explain to the daughter that now that her mother had lost cognitive capacity that it was too late to attain Power of Attorney and that she would need to petition the courts for guardianship and conservatorship to represent her mother’s financial and medical affairs.
What is the Difference Between Guardianship and Conservatorship?
An appointed guardian takes care of the well-being and health of a person, often called a ward in the court system, while a conservator would manage the financial affairs of the person, including income, assets, and property is often called a “protected person” by the court.
The need for guardianship/conservatorship usually arises when a person is mentally ill, has advanced dementia, or lacks capacity. It may also be necessary when a person presents an intellectual disability.
Cognitive capacity will often determine if one or both guardianship and conservatorship are necessary. An individual may have the capacity to make their own healthcare decisions, but not to manage money. Courts determine what constitutes capacity and it varies state by state. Usually, medical examinations will be shown as evidence that a person lacks sufficient capacity, and you will likely need to hire an attorney to help you attain guardianship/conservatorship.
Once a guardian is appointed by the court, the guardian would have the same responsibilities for the ward as a parent would have for their minor child. This can include living arrangements, social activities, and professional care or treatment. The main responsibility of the guardian is to always act in the best interest of the incapacitated person.
The appointed guardian must annually submit a report to the court including information regarding the health and living conditions of the ward and a current physician’s report reflecting the health of the ward.
Guardianship has few advocates because effectively it strips an individual of their civil liberties and the ability to make any decisions pertaining to their health and finances on their own. The court-appointed process can be alienating, demeaning, and costly for a person. However, court-appointed guardianship or conservatorship does play a beneficial role in protecting the property and assets of a vulnerable person as well as giving decision-making authority to an advocate when older adults do not have trusted family members with authority to make decisions on their behalf.
Who can Serve as a Guardian or Conservator?
An individual or a licensed private or public fiduciary can serve as the guardian or conservator of an incapacitated adult or minor. An individual, as long as they are deemed competent by the court and have no criminal background, can serve as the guardian/ conservator. In order to begin the process for the appointment of a guardian, an individual must submit a petition as an “interested person” in an incapacitated adult’s welfare.
The court will then go through a two-step process:
determine incapacity,
determine the suitability of the interested guardian.
In determining the finding of incapacity, the court will appoint a physician and court investigator who will submit reports to the court before the scheduled hearing date.
How Do I Protect Myself?
There is a lot of stigma attached to court-appointed guardianship and conservatorship and is often used as a last resort. Planning for the long term early can go a long way in avoiding the court ever having to get involved. The first step is having an effective estate plan in place, including a living trust, last will and testament, and powers of attorneys for both health and financial purposes.
A living trust helps to avoid conservatorship because in the event the creator of a trust becomes incapacitated, the appointed successor trustee and manager of the trust, will step in and manage the trust assets for the benefit of the trustor. Estate planning attorneys commonly call this the beginning of a living trust administration, which bypasses the need for court-appointed guardianship/conservatorship.
A durable power of attorney, the document that allows an agent to make financial decisions on your behalf, can also accomplish the goal of avoiding the court-appointed conservatorship. The durable power of attorney can grant a chosen person authority once an individual is deemed incapable and bypass the court-appointed process as well.
If you have questions regarding guardianship and conservatorship court proceedings or would like to discuss a living trust or how another estate planning tool can avoid these processes, you can call us at (480) 924-4424 to schedule a free Personal Family Legal Session to discuss protecting yourself and your family for the future and avoid vulnerable adult exploitation.