Conservatorship: Helping to Take Care of Family Members in Need

Douglas R. Clough, Wealth Advisor, First Republic Investment Management

September 7, 2016

Some families have an adult member who is unable to take care of themselves. This could be an adult child with a physical or mental disability, or an elderly parent or grandparent with dementia or another serious health issue.

The legal system offers a straightforward way for families to designate someone to manage the affairs and care of these individuals, called conservatorship. A conservator is a legally appointed guardian authorized to make decisions on behalf of a conservatee — the individual who is unable to handle such tasks independently — which may include anything from making healthcare and housing decisions to managing finances.

Appointing a conservator gives families peace of mind that the person in need is being well taken care of and that they have authority to help them make important life decisions.

Types of conservatorships

Different types of conservatorships can be designated by a state’s probate court depending on the needs of the incapacitated person and his or her family:

Conservator of the person vs. conservator of the estate

A conservator of the person is authorized to handle the daily care of the conservatee. Depending on the court order, this may include, among other things, deciding where the conservatee lives, reading his or her mail, accessing medical records and other confidential records and even consenting to the conservatee’s social relationships. A conservator of the estate is authorized to manage the conservatee’s assets and financial affairs. Sometimes one conservator fills both roles; sometimes two separate people are appointed.

General vs. limited conservatorship

Another common distinction is how broad of authority a conservator receives, which depends on the conservatee’s situation.

A general conservatorship is usually sought by a family when an elderly person is unable to grant a power of attorney due to incapacity, or refuses to do so as the person believes themselves to be perfectly able-minded. This general conservatorship gives the conservator broader powers to handle both daily care and financial decisions on behalf of the conservatee. The court will require an inventory and accounting of the conservatee’s assets. A probate referee is usually then named to oversee the process and place value on the conservatee’s estate.

A limited conservatorship is typically only used for adults who are developmentally disabled and rely on government assistance. Due to limits set by government benefits programs, these individuals have few financial assets. For this reason, the conservator does not need the same level of financial oversight as is needed with a general conservatorship.

A limited conservatorship can provide the conservator with the authority to make daily care and living decisions with less oversight by the court. Families who want to support a developmentally disabled person financially should consider setting up a special needs trust to supplement any government benefits the person may be receiving.

Navigating the process

A family typically seeks conservatorship through the probate court of the state in which the disabled person resides. Because it may be a lengthy process that can include filing forms and being interviewed by a court investigator, it’s usually a good idea to start the process as early as possible.

Designating a conservator is a powerful and useful way for families to take care of members who are unable to care for themselves. But before doing so, it’s important for families to work with an experienced attorney who can counsel a family about the type of conservatorship to seek from the probate court. Most courts give conservator preference to spouses, parents and children of the incapacitated person, though other blood relatives and trusted friends may be eligible to serve as the conservator. If the now-incapacitated person set up durable power of attorney before becoming incapacitated, then conservatorship may be unnecessary. 

The strategies mentioned in this article will often have tax and legal consequences; therefore, it is important to bear in mind that First Republic does not provide tax or legal advice. This information is provided to you “AS IS,”, does not constitute legal advice, is governed by our Terms and Conditions of Use, and we are not acting as your attorney. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained here. Clients’ tax and legal affairs are their own responsibility.Clients should consult their own attorneys or other tax advisors in order to understand the tax and legal consequences of any strategies mentioned in this article.

©First Republic Investment Management 2016