A conservatorship is a proceeding wherein the court gives a person authority over the assets and income of another because that person is unable to manage his or her finances.  The term conservator refers to one who is appointed by the court to protect the property of a disabled person or a minor.  The Social Security Administration does not recognize an order for conservatorship.  Instead, a person must become a representative payee to manage an incapacitated person’s Social Security benefits.

The Appointment of a Conservator

To become a conservator, a person must petition the court at which time a hearing will be set; proper notice of the hearing must be given.  At the hearing, the person allegedly in need of protection is entitled to present evidence and cross-examine witnesses, including any court appointed examiner and investigator.  A petition may be filed by the person in need of protection, any person interested in that person’s estate or affairs (such as a parent, guardian, or custodian), or any person who would be adversely affected by lack of effective management of that person’s estate.  Priority is determined by statute, and where persons have equal priority, the court will select the one it determines is best qualified to serve.  In addition, the court, for good cause, may pass over a person having priority and appoint a person having a lower priority or no priority.  The petition must contain specific information required by statute.

Unless the person for whom a conservatorship is sought has independent counsel, the court will appoint an attorney to represent him or her.  If the person is a minor and the court feels his or her interests are not being protected, the court may appoint an attorney to represent the minor.  The court appointed attorney will meet with the proposed protected person and inform the court of that person’s position regarding the appointment of the proposed conservator.

Under certain circumstances, such as when the alleged disability is mental illness, mental deficiency, mental disorder, physical illness or disability, or chronic use of drugs or chronic intoxication, the court will appoint an investigator to interview the person to be protected.  A medical or physical evaluation of the person may be ordered conducted.  A written report is then submitted to the court prior to the hearing date.

General Duties and Powers of the Conservator

A conservator is a fiduciary, and must observe the standard of care applicable to trustees as required by statute.  A conservator may invest and reinvest funds of the protected person’s estate, as would a trustee, without court oversight.  In addition, a conservator may act without court oversight to collect, hold, and retain assets of the estate until, in the conservator’s judgment, disposition of the assets should be made; receive additions to the protected person’s estate; continue or participate in the operation of any business or other enterprise; deposit the protected person’s funds in a state or federally insured financial institution including one operated by the conservator; and acquire or dispose of an estate asset, among many other powers as provided by statute.

A conservator may distribute income or principal of the protected person’s estate without court oversight for the support, education, care or benefit of the protected person and the protected person’s dependents.  There are a number of factors the conservator must consider when making decisions regarding distribution which include recommendations made by a parent or guardian of the protected person, the size of the protected person’s estate, the probable duration of the conservatorship, and the accustomed standard of living of the protected person, among other factors.  There are also a number of factors the conservator must consider when making decisions regarding distribution with respect to the estate of a minor which include the financial responsibility and financial resources of the parents of the child; the physical and mental condition of the child and the child’s medical and educational needs, and the standard of living the child should reasonably expect to enjoy given the financial resources available to the child, among other factors.

Within ninety days after appointment, a conservator must prepare and file with the court an inventory of the assets of the protected person on the date of the conservator’s appointment, listing it with reasonable detail and indicating the fair market value of each asset as of the date of the appointment.  This initial inventory of the estate is filed with an initial budget.  This initial inventory of assets will be used as the beginning balance for the first annual accounting.  A budget and sustainability report is also required to be filed with the court, and the conservator has a duty to keep adequate records of his or her administration of the protected person’s assets.  Accountings for the administration of the estate are also required.

Termination of the Conservator’s Appointment

A conservator’s appointment terminates upon the court entering an order terminating the appointment.  A conservatorship may be terminated upon a minor reaching the age of eighteen, in the case of a minor conservatorship, or the protected person recovering from disability or passing away.  The conservator may always ask the court to terminate the appointment sooner.  Pursuant to statute, whether the appointment of a conservator was for a minor or an adult, there are a number of tasks that must be completed with the termination of a conservatorship.