Estate Planning Practice Blog

More on Conservatorships.

A conservatorship is often a poor substitute for estate planning. With a proper estate plan in place including powers of attorneys, assets funded into a trust and so on -- the hassles of a court oversight for a conservatorship can largely be avoided in most circumstances.  Moreover, the courts and the legislature are enacting more stringent requirements for conservatorships in general.

Here is a quick run down of some of the new requirements:

CARE PLANS
For conservatorships established as of July 2007, a Care Plan must be filed at least within 60 days of issuance of the Letters of Conservatorship. This Care Plan must be updated annually thereafter from the date it was first filed. Note that for conservatorships established before July 2007, a Care Plan may not be required unless specifically ordered by the court. INVENTORY
For every conservatorship, the court requires an inventory of the conservatorship assets be filed with the court within a specified number of days from the establishment of the conservatorship.

CHANGE OF ADDRESS
For every conservatorship, the court requires that the conservator notify the court immediately if they have moved.

ACCOUNTINGS
One of the most important aspects of the court oversight of all conservatorships is the accounting requirements. Each conservator is required to provide to the court an accounting of the conservatorship estate for approval. This includes tracking all financial and medical expenses borne by the conservatorship estate for care of the conservatee. It includes preparing an accounting in the required court format and having bank statements and other documentation available for the court's review.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

WSJ: Adult Guardianship Cases Rise

The Wall Street Journal recently published some really good tips for avoiding or preventing conflict in adult guardianship proceedings. This came out in their Personal Journal section on August 17, 2006, for those of you who have online subscriptions to view the article on site.

Adult guardianship proceedings are called conservatorships in legal terminology.

Some of the WSJ tips, paraphrased below, include:

• Create a financial Durable Power of Attorney document to name a trusted loved one to manage your financial affairs if you are unable to make them.
• Create an Advance Health Care Directive designating an agent to make medical decisions for you and document your medical wishes in the same document or a living will.
• Create a Living Trust and transfer your assets into it and designate a trustee to manage trust property if you become incapacitated.
• Talk about your wishes with your agents and trustees as well as other family members.

Can I Be Barred From Handling My Own Affairs?

The law requires that you have sufficient mental capacity to handle your own affairs. This includes making medical decisions for yourself and to entering into contracts for example.

To ensure that your affairs will be handled the way you want if you lose capacity, whether permanently or temporarily, you can prepare a power of attorney for finances. A durable power of attorney can be effective immediately and continue through your incapacity. You can also prepare a power of attorney that is effective upon your incapacity as determined by two medical doctors or the court.

You can also prepare a power of attorney for healthcare, which is now called an advance health care directive. This document allows you to appoint someone to make medical decisions for you in the event you are unable to do so.

If you prepare a revocable Living Trust, you can name a successor trustee to manage your trust assets in the event of your incapacity. Most people transfer title of their home into their trust so your successor trustee would be able to manage all aspects of your home for you.

If you have not made any arrangements such as I have described above, the court may appoint a conservator to act on your behalf. Nearly anyone can petition the court to become your conservator if they can show that you no longer have capacity to manage your affairs.  I hope I don't have to say that this is the worst case scenario.

A Living Trust May Avoid a Conservatorship.

A Living Trust can be used to hold title to your real property. Also, in a Living Trust, you appoint a Successor Trustee to manage your Living Trust in the event you are unable to do so by reason of death, incapacity or personal choice.

If you become incapacitated, your Successor Trustee will be able to privately manage your assets in your Living Trust in accordance with your instructions you have provided in the Living Trust.

Thus, a properly prepared and funded Trust can enable you to avoid a conservatorship proceeding over your estate. Compared with the cost of a conservatorship proceeding, a Trust can be very attractive.

Sounds so simple, you know.

A conservatorship is a guardian over an adult. It is very costly and time-consuming. It can also be very scary to the individual placed in the conservatorship. You become a conservatee and lose control over your assets.

But if you have the your largest asset, your home, in your Living Trust then it can be managed by your chosen loved one. Also, if you have a Durable Power of Attorney in Place and Advance Health Care Directive -- all potential reasons to obtain a conservatorship will have been addressed.

Estate planning is truly important.

Cross References:

For more information about conservatorships, read the Guardians for Profit series reported by the Los Angeles Times.

Conservatorship in California...Getting Started.

A Conservatorship is a court proceeding where a judge appoints a person called a Conservator to care for another adult who cannot care for him or herself or his or her finances.

The adult needing such care is called a Conservatee.

There are 2 types of Conservators:

1. A Conservator of the Person cares for and protects the proposed conservatee when the conservatee is unable to do so.
2. A Conservator of the Estate handles the conservatee’s financial matters.

An Appointment of a Conservator can be made for either or both types. A Conservator can be a loved one like a grown son or daughter, another relative or a close family friend. It can also be a private person not related to you or a public agency.

In California, there are 8 forms that need to be completed and filed for obtaining a conservatorship. This does not include any specific forms that may also be required by each California county or court. The forms are quite lengthy and require additional documentation if you are seeking Conservatorship of the person. Here's a list to get you started:

1. Petition for Appointment of Conservator
2. Notice of Hearing
3. Confidential Supplemental Information
4. Citation for Conservatorship
5. Duties of Conservator
6. Confidential Conservator Screening
7. Order Appointing Conservator
8. Letters of Conservatorship

Petitioning the court for a Conservatorship should really be a last resort as it is very costly in both time and money. It can also spur a family fight. There are ways to avoid a Conservatorship. You guessed it, proper estate planning can make a difference for most individuals.

Read the Los Angeles Times series on Conservatorships discussed in this post.

Los Angeles Times Probe into Conservatorships.

Last November, the Los Angeles Times wrote a compelling, must read series delving into the ugly world of conservatorships involving private conservators. The series was titled Guardians for Profit. [A conservatorship is when someone seeks guardianship over an adult.]

Robin Fields was the lead reporter for this series. Today, I had the honor of listening to Ms. Fields at the Estate Planning and Trust Council of Long Beach. She spoke briefly about her three year experience working on this series and what she uncovered. Then she opened the floor for the members of the Estate Planning and Trust Council of Long Beach to talk about their observations and ask questions. It was a very interesting luncheon indeed.

If you have not read the series, please do so. The reporting is excellent, the writing is compelling and the analysis in subsequent articles begs for future action by California legislators.