A conservatorship is a legal arrangement in which a court appoints a person or organization — called a conservator — to manage the financial affairs or personal care of another person who is unable to manage their own affairs due to incapacity. It is a serious legal proceeding that involves court oversight and can significantly affect the rights and independence of the person subject to it.
How a conservatorship works
When a person becomes incapacitated due to illness, injury, dementia, or other conditions and does not have legal documents such as a power of attorney or healthcare directive in place family members or other interested parties may need to petition a court to appoint a conservator to manage their affairs.
The court evaluates the evidence of incapacity and if it determines that the person — called the conservatee or protected person — is unable to manage their own affairs it appoints a conservator to act on their behalf. The conservator is then legally responsible for managing the conservatee’s finances, assets, and in some cases personal and medical decisions subject to ongoing court supervision.
Types of conservatorship
There are two main types of conservatorship:
- Conservatorship of the estate — also called a financial conservatorship, this type gives the conservator authority to manage the conservatee’s financial affairs including bank accounts, investments, real estate, bills, and taxes
- Conservatorship of the person — this type gives the conservator authority to make personal decisions on behalf of the conservatee including decisions about housing, medical care, and daily activities
A court may appoint the same person as conservator of both the estate and the person or may appoint different people for each role depending on the circumstances.
Conservatorship vs guardianship
The terms conservatorship and guardianship are often used interchangeably but they have different meanings in many states:
- Guardianship — typically refers to authority over personal and medical decisions for an incapacitated adult or a minor child
- Conservatorship — typically refers to authority over financial affairs and assets
In some states the term guardianship is used for both types of authority. In others conservatorship and guardianship are separate legal proceedings. The terminology varies by state so it is important to understand how your state defines and distinguishes these terms.
How a conservatorship is established
Establishing a conservatorship involves a formal court process that typically includes the following steps:
- Filing a petition — a family member, friend, or other interested party files a petition with the court requesting that a conservator be appointed. The petition describes the person’s incapacity and explains why a conservatorship is necessary.
- Notifying interested parties — the court requires that the proposed conservatee and other interested parties such as close family members be notified of the petition and given the opportunity to respond
- Appointing a guardian ad litem or investigator — in many states the court appoints an independent person to investigate the situation and report back to the court on whether a conservatorship is appropriate
- Medical evaluation — a physician or other qualified professional typically submits a report to the court documenting the person’s incapacity
- Court hearing — the court holds a hearing at which evidence is presented and the proposed conservatee has the right to appear and object
- Court order — if the court determines that a conservatorship is warranted it issues an order appointing the conservator and defining the scope of their authority
The conservator’s responsibilities
A conservator has significant legal responsibilities and is subject to ongoing court oversight. Typical responsibilities include:
- Managing the conservatee’s finances prudently and in their best interest
- Keeping detailed records of all financial transactions
- Filing regular accountings with the court showing all income, expenses, and asset changes
- Obtaining court approval for certain significant transactions such as selling real estate or making large investments
- Acting in the conservatee’s best interest at all times
- Avoiding conflicts of interest
Conservators who mismanage funds or fail to fulfill their duties can be held personally liable and may be removed by the court.
Who can be appointed as conservator
Courts generally prefer to appoint a family member or trusted person who knows the conservatee well. Common choices include:
- A spouse or domestic partner
- An adult child
- A sibling or other close relative
- A close friend
If no suitable family member or friend is available the court may appoint a professional conservator — an individual or organization that provides conservatorship services for a fee. In some cases a public guardian — a government agency or official — may be appointed when no private conservator is available.
The cost of conservatorship
Conservatorship can be expensive. Costs include:
- Court filing fees
- Attorney fees for the petitioner and in some cases for the proposed conservatee
- Fees for the guardian ad litem or court investigator
- Ongoing attorney fees for court accountings and other required filings
- Professional conservator fees if a professional is appointed
Total costs for establishing a conservatorship can range from several thousand dollars to tens of thousands depending on the complexity of the case and whether it is contested. Ongoing costs for court accountings and supervision add to the expense over time.
How to avoid the need for conservatorship
The most effective way to avoid the need for a court-supervised conservatorship is to put legal documents in place while you are still mentally competent including:
- Durable power of attorney — names a trusted person to manage your financial affairs if you become incapacitated without court involvement
- Healthcare power of attorney — names a trusted person to make medical decisions on your behalf if you are unable to do so
- Revocable living trust — allows a successor trustee to manage trust assets without court involvement if you become incapacitated
These documents allow your chosen representatives to step in and manage your affairs immediately without the expense, delay, and public nature of a court proceeding. This is one of the most compelling reasons to complete estate planning documents while you are still healthy and able to do so.
Conservatorship and cognitive decline
Conservatorship is most commonly needed when a person develops dementia or another form of cognitive decline and has not put legal documents in place. As the population ages conservatorship proceedings are becoming increasingly common.
If a loved one is showing signs of cognitive decline it is important to act quickly to put legal documents in place while they still have the mental capacity to sign them. Once a person lacks the mental capacity to understand and execute legal documents conservatorship may be the only option.
Limited conservatorship
In some states courts can establish a limited conservatorship that grants the conservator authority only over specific areas where the person needs assistance while preserving their independence in areas where they are still capable of managing their own affairs. Limited conservatorship is considered less restrictive than a full conservatorship and is preferred by courts when appropriate.
Key terms to know
- Conservatorship — a court-supervised arrangement in which a conservator manages the financial or personal affairs of an incapacitated person
- Conservator — the person or organization appointed by the court to manage the affairs of the conservatee
- Conservatee — the person whose affairs are being managed under a conservatorship
- Guardianship — in many states a court arrangement that gives authority over personal and medical decisions for an incapacitated person
- Guardian ad litem — an independent person appointed by the court to investigate and report on the appropriateness of a conservatorship
- Limited conservatorship — a conservatorship that grants authority only over specific areas where assistance is needed
- Durable power of attorney — a legal document that allows a trusted person to manage financial affairs without court involvement
- Public guardian — a government agency or official appointed as conservator when no private conservator is available
Sources
- American Bar Association — Public Resources
- National Guardianship Association — guardianship.org
- USA.gov — Estate Planning
- National Institute on Aging
This article is for general informational purposes only and does not constitute legal advice. Conservatorship laws vary significantly by state. Consult a licensed attorney for guidance specific to your situation.