Guide

What Is A Conservatorship?

Wondering about what conservatorship is? When someone is unable to manage their financial, legal, or medical affairs, a conservatorship is established for him or her. Read more to familiarize yourself with how one can get conservatorship and how it works.

Conservatorship is a legal status in which a court appoints someone to handle a minor’s or incompetent person’s financial and personal affairs. A conservator can also act as a guardian, establishing and supervising the individual’s physical care as well as controlling their living circumstances. The appointment of a conservatorship by a court to oversee the financial and personal affairs of an incapacitated or incompetent individual, minor, or older adult with limited competence is known as conservatorship.

A conservator is a person who is appointed by the court. The conservator is in charge of a person who is incapable of a minor’s financial and personal affairs. The court has the power to investigate conservators. They must, for example, frequently document their financial management of the conservatee.

Conservatorship and guardianship are two distinct terms that might be filled by the same person. The appointment of a person to oversee the physical and medical care of a person with limited capacity is known as guardianship.

Conservatorships can be general or limited. A conservatee, the individual who is the subject of the conservatorship, usually has little to no decision-making authority under a general conservatorship. With the exception of what the court requires the conservator to oversee, a limited conservatorship permits the conservatee to retain the majority of control over their financial and personal matters.

Different jurisdictions use different nomenclature for conservatorships. A conservatorship is sometimes referred to as guardianship in some jurisdictions and states, and conservators are sometimes referred to as trustees. Both roles are referred to as conservatorship in California, with the guardian role being referred to as conservator of the person and the financial role being referred to as conservator of the estate.

Types of conservatorships

Depending on the needs of the conservatee, the following are the types of conservatorships:

Probate conservatorships

The laws of California Probate code are used to create these conservatorships. Conservatorships of this category are the most common. Conservatorships in probate can be:

General conservatorships

Adults who are unable to care for themselves or their finances are placed under conservatorship. These conservatives are typically old, but they can also be younger people who have been gravely injured, such as in a car accident.

Limited conservatorships

Adults with developmental disabilities who are unable to care for themselves or their finances are placed under limited conservatorships. Conservatees under restricted conservatorships do not require the same level of attention or assistance as those in general conservatorships.

When an immediate conservatorship is required, the court may designate a temporary conservator until a permanent conservator is designated. The request must be made as part of a general conservatorship case, and it can be made at the same time as or shortly after the case is filed with the court. A temporary conservator’s principal responsibilities include providing for the conservatee’s temporary care, protection, and support, as well as safeguarding the conservatee’s income and property.

Lanterman-Petris-Short (LPS) Conservatorships

Adults with serious mental diseases that require particular care are placed under LPS conservatorships. These conservatorships are typically used for people who require very restrictive living arrangements such as being locked up and substantial mental health treatment like very powerful drugs to control behavior. Conservatees in LPS conservatorships are unable or unwilling to agree on their own to the particular living arrangements or treatment. A local government agency must initiate an LPS conservatorship. It is recommended to contact your country’s public guardian or public conservative if you believe this is the type of assistance the adult needs. This online self-help center’s content does not apply to LPS conservatorships.

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Types of conservators

There are two types of probate conservators depending on whether the conservatorship is for an individual or a corporation.

Individual conservator

A conservatorship is established by court order for a minor or a person with a physical or intellectual disability. Individuals needing conservatorship may include those who are victims of dementia or intellectual deficiencies that render the person unable to make legal, financial, and medical decisions on their own behalf.

Elderly people, particularly those with Alzheimer’s or dementia, are among those who may be placed under conservatorship. Mental capacity must be determined by a psychiatrist, psychologist, or physician with substantial knowledge and training in diagnosing disorders such as dementia for conservatorships of individuals. Before a conservatorship over an individual can be ordered, every diagnosis or determination must be documented and substantiated.

In some situations, the person who is the subject of the conservatorship might sue to have it lifted later if they decide it is no longer needed. The conservatorship of pop diva Britney Spears is a high-profile example. She requested a court in June 2021 to lift a 13-year conservatorship managed by her father and a lawyer, which had been imposed after she had a series of highly publicized mental breakdowns. Britney Spears lost control of her finances and many personal decisions when she was in conservatorship. The conservatorship is concluded in November 2021, according to a judge’s decision.

Corporation conservator

A conservatorship is established for an organization or a company by a statutory or regulatory body. Conservatorship entails temporary authority in the case of government control of private organizations or enterprises.

An example is the conservatorship of Fannie Mae (FNMA) and Freddie Mac. For these two agencies, the Federal Housing Finance Agency (FHFA) serves as a conservator. The conservatorships, which were established after the 2008 financial crisis, authorized the government to intervene in the operation of the agencies in response to financial difficulties caused by the housing market’s decline. Steps have been taken in recent years to get Fannie Mae and Freddie Mac out of conservatorship.

Being designated conservator of a person does not imply that they are also conservators of the estate. If someone wants to be a conservator of both the person and the corporation, they must file a petition for both. If a conservator of a person later believes that he or she needs to be appointed as conservator of the corporation, he or she can submit a new conservatorship petition and ask to be designated as conservator of the corporation.

Responsibilities of a conservator

The following are the responsibilities of a person’s conservator:

  • Make arrangements for the conservatee’s care and safety.
  • Choose a location for the conservatee to live.
  • Prepare meals, healthcare, clothing, personal care, housekeeping, transportation, shelter, recreation, and well-being for the conservatees.
  • Obtain judicial approval for specific decisions regarding the conservatee’s health care and living arrangements.
  • The present status of the conservatee should be reported to the court.

A conservator of the corporation’s responsibilities include:

  • Organize the finances of the conservatee.
  • All assets must be located and taken control of.
  • Collect the income of the conservatee.
  • Make a budget to demonstrate to the conservatee what he or she can afford.
  • Pay the bills of the conservatee.
  • Invest the conservatee’s money responsibly.
  • Protect the assets of the conservatee.
  • Account for the conservatee’s assets management to the court and the conservatee.

What is the difference between conservatorship and guardianship?

When a loved one becomes unable to care for themselves, there is a lot of dread. Whether it’s a physical or mental issue, the worry and anxiety it causes will not go away on its own. Physically and financially, your loved one must be cared for and protected. That is why conservatorships and guardianships are so vital; they create a structure that allows you to handle the affairs of someone who is unable to manage their own affairs.

A conservatorship is a court order that designates someone to handle a minor’s or incompetent person’s financial affairs.

A guardianship is when someone is appointed to handle the medical and physical care of a person with limited capacity or a juvenile. Both responsibilities can be undertaken by the same person.

Conservatorships are for those who, for whatever reason, are unable to manage their financial holdings. You can be designated as their conservator if your loved one is unable to manage their own finances. As a conservator, you’ll be awarded trustee status, which means you’ll be able to manage their finances without their permission. While you will have no control over personal care decisions, you will be able to redistribute assets, invest in stocks, and even buy real estate in order to protect the specified individual’s financial situation. This sort of conservatorship can be highly beneficial for persons with mental disabilities or Alzheimer’s disease.

Guardianships, on the other hand, are entirely different. While you are simply accountable for an individual’s financial concerns in a conservatorship, guardianships are for those who are entirely disabled. In other words, individuals not only require financial management but also cannot be accountable for their own overall health and well-being.

How to get conservatorship?

The conservatorship process begins with the filing of papers with the Probate Court and the distribution of copies to the putative conservatee and close relatives. Obviously, for the conservatee, who is compelled to give up rights to manage his or her finances, make his or her own medical decisions, and so on, this can be a difficult procedure. Nonetheless, a conservatorship is occasionally unavoidable.

An investigator from the court must speak with the putative conservatee and others who may have knowledge of the matter. A hearing date is set, and the judge will decide whether or not a conservator will be appointed, and if so, who that conservator will be. Unless the prospective conservatee is unable to attend due to illness, the proposed conservatee should attend the hearing because the judge will frequently interrogate them. Someone else, generally a family member, has the right to oppose the proceeding or suggest a new conservatory.

The conservator must make a report with the court outlining the assets owned by the conservatee within 90 days of the date the judge signs the order appointing probate conservator. The conservator creates an inventory and appraisal form in particular. The conservator must provide the inventory and appraisal to the probate referee, who is appointed by the court if there are assets other than cash. The probate referee will appraise the non-cash assets, fill in the value of those items on the inventory and appraisal, and return it to the conservator, who will submit it with the court. The form is normally returned in four to six weeks by the probate referee.

The appraiser charges the estate a fee, which is usually a tenth of one percent of the total value of the conservatee’s estate, with a maximum fee of $10,000. In addition, the probate referee may be eligible to recover expenditures such as mileage. Following the establishment of a conservatorship, the court conducts periodic investigations to ensure that the conservatorship is still needed and that the conservatee is being treated properly.

Bonds and periodic accounting are two types of accounting. If the conservator is in charge of the conservatee’s money, which is usually the case, he or she must post a bond and submit full reports to the court on a regular basis, detailing all income and expenditures. The size of the bond is determined by the conservatee’s assets and annual income, as well as whether the bond is provided by a professional bonding business rather than relatives or friends.

Companies that provide bonds. Most bonding agencies will not provide a bond unless the conservatorship proceedings are being handled by an attorney.

Reports on the conservatee’s status frequently, the conservator is required to write periodic status reports outlining how the conservatee is doing and what the conservator is doing in terms of his or her responsibilities.

How much does a conservator get paid?

The conservatorship is usually paid for out of the conservatee’s income or other assets.

In general, the conservator is entitled to repayment for reasonable expenses incurred on behalf of the conservatee, such as costs associated with establishing the conservatorship and money spent supporting the conservatee prior to the conservatorship.

The conservator must get court approval before obtaining reimbursements from the conservatee’s estate, with the exception of court filing fees and bond premiums. All receipts and records of all expenses must be kept by the conservator (and reimbursements). The conservator may hire assistance as needed, such as an accountant, as long as the cost is acceptable in contrast to the size of the conservatee’s inheritance.

In most cases, the conservator will not be reimbursed for mail, photocopying, transportation, or court fee. It is critical for a conservator who intends to be paid for his or her to keep a full written record of the time spent on the conservatorship, including the date, amount of time spent, and work completed on a case-by-case basis. Courts normally only allow a family member to be compensated for time spent handling the estate’s finances, not for time spent acting as a family member (such as visiting the conservatee) or acting as the person’s conservator.

Courts may refuse to provide time compensation if the conservator has spent little time on financial problems or has failed to follow court rules, such as filing accounts on time.

Some courts have schedules that specify how much a conservator may be paid for his or her work, which is usually a percentage of the conservatee’s inheritance. The conservator may only ask for compensation for time spent after the latter of the following two events has occurred

  • When the inventory and appraisal are filed.
  • 90 days after the letters of conservatorship were issued.

Conservatorship celebrities

For the past 13 years, Britney Spears’ financial and personal life has been under the jurisdiction of her father and others through a type of legal guardianship known as conservatorship.

After her divorce from Kevin Federline was finalized in 2007, and she lost custody of their two children, the singer began acting erratically.

A series of public outbursts aroused concerns about her mental health, with the actress shaving her head and slamming an umbrella into a photographer’s car. She was twice hospitalized in 2008 under a temporary psychiatric assessment order, including following an incident in which she allegedly refused to surrender her sons in a police standoff.

Around this time, a temporary conservatorship was established, which was later made permanent later that year. Her father Jamie’s lawyers argued the conservatorship was essential to protect Britney in every meaning of the term in recent court files. The conservatorship over Spears was divided into two parts: one for her estate and financial issues, and the other for her as a person. Jamie Spears was in charge of both portions, but in 2019 he stepped down as his daughter’s personal conservator, citing health reasons, and was replaced by a court-appointed care professional.

In September 2021, Mr. Spears was removed as conservator of Britney’s financial estate and replaced by an accountant chosen by Britney and her counsel. Spears released three albums, had a successful Las Vegas residency and made numerous television appearances during her time as a conservator. Her finances and professional decisions are within the conservatorship’s control, as are significant personal considerations like her visits with her teenage sons and whether she can remarry.

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The singer’s phone and bedroom were allegedly monitored by security staff working for her father, according to a documentary.

Pros and cons of conservatorship

Pros

The requirement of court monitoring and control over the conservatory is an advantage of court-appointed conservatorships. This supervision forbids the conservator from making any critical decisions without the approval of the court. If a conservator needs to decide whether or not to withhold life-saving medical treatment, he or she must file a petition with the court and acquire written authority. This inspection ensures the conservatee’s safety as well as the peace of mind of the family.

Another benefit of judicial oversight is that it protects against breaches of fiduciary duty or financial mismanagement. In California, the conservator is required to file an inventory with the court listing all of the conservatee’s assets. The conservator must thereafter continue to present accountancy to the court detailing any transactions involving the conservatee’s assets.

Furthermore, because a conservator is appointed by the court, the conservator will be given a level of authority that will be valuable when dealing with third parties on the estate.

Cons

The cost of the conservatorship process is a significant disadvantage. The fees might be significant because the court is still involved in the process after the conservatorship has been formed. The fact that the conservatorship proceedings are open to the public is also a drawback. This means that the conservatee’s assets, as well as the nature of his or her incapacity, will be made public, perhaps causing hesitation.

The most major downside is that a conservator’s appointment effectively removes the conservatee’s power to make decisions about most of their affairs. This can be extremely humiliating for most people. However, there are several less restrictive options to explore. Advance healthcare directives, durable powers of attorney for finances and healthcare, and revocable living trusts are examples of these documents. The appointment of a conservator may not be necessary if sufficient previous planning is done.

Conclusion

A conservator can make the appropriate judgments when a person is no longer capable of handling his or her own affairs and is unable to assign this responsibility to someone else. Due to court control of the conservatee, a conservatorship provides a better level of protection for the conservatee than other options. While court supervision makes a conservatorship more expensive and time-consuming than other management systems, it provides the conservatee with more protection than other management mechanisms. The conservator is required to file an inventory of the conservatee’s property as well as accountancy with the court that details any transactions involving the conservatee’s assets.