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Estate Planning Essentials: June 2017

Chambliss Estate Planning Essentials brings you legal developments and other trends of vital interest in the world of estate planning. This post is brought to you by Rebecca Miller and other members of the Estate Planning Practice Group of Chambliss Law Firm.

Does My Family Need a Conservatorship?

When it comes to estate planning, many individuals develop estate plans with the intent to protect their assets throughout life, determine who will receive different parts of their inheritance, as well as specify financial and medical preferences for situations that may occur, such as illness, incapacitation, and death. So, good estate plans typically include incapacity documents like a durable general power of attorney, which appoints someone to act on your behalf with regard to your financial affairs, and a health care directive, which designates an agent to make your health care decisions. Unfortunately, not everyone has these documents when they need them the most. For example, what happens if Grandma develops dementia and cannot make reasonable decisions but has not appointed anyone to act on her behalf? What happens when a family member with special needs comes of age and is legally considered competent but really lacks capacity to make financial and health care decisions and lacks an estate plan? In these instances, it is often necessary to establish a conservatorship in order to care for and protect the person who cannot make reasonable financial, health, and life decisions. 
What exactly is a conservatorship?
A conservatorship is created when the court removes rights and decision-making powers from a person with a disability and appoints a conservator to exercise the person's rights and make personal, health care, and financial decisions. A person with a disability who has been appointed a conservator is called a ward. The conservator must act in the best interest of the ward and wisely use the ward's assets to provide for his or her care. The court is required to implement the least restrictive means to protect the ward, so the ward may be able to retain some rights, for example, the right to vote or apply for a driver's license.        
Note: The term "guardianship" is used in the case of a minor.
When is a conservatorship needed?

A person may need a conservator if he or she is unable to make decisions or explain reasoning, does not understand finances or legal documents, lacks insight regarding personal safety, engages in high-risk behaviors without understanding the consequences, or lacks awareness of medical needs. 
What are the benefits of a conservatorship?

  • Provides peace of mind for family members 
  • Grants someone authority to obtain the ward's records and consent to medical treatment
  • Protects the vulnerable from exploitation and ensures that the ward's funds are used for his or her benefit 
  • Provides oversight for decisions and actions on behalf of the ward    

It's never easy to see loved ones give up their rights and decision-making powers, but sometimes it is in their best interest. If you or someone you know are looking into options for protecting a loved one with a disability, please contact us.

How do you obtain a conservatorship?
The first step is to ask the court to appoint a conservator by filing a petition which states that a person has a disability and needs protection. A medical report from the person's physician is usually attached to the petition. Immediately following, the court will notify the proposed ward and his or her closest relatives that the petition has been filed. The court may also appoint a guardian ad litem, an attorney who will investigate the facts and submit a report and recommendation to the court. The proposed ward can request an attorney to represent him or her in the court proceeding. 
The court will then schedule a hearing to determine whether the individual is a "person with a disability" in need of the court's assistance and whether appointing a conservator is the least restrictive alternative for protecting the person. The judge usually reviews medical evidence and may hear testimonies in order to determine. If a conservatorship is necessary, the judge will decide who is best suited to serve as the conservator. 
What are the drawbacks of a conservatorship?

  • Attorney's fees and other costs of the court proceeding
  • Court proceeding may be upsetting for proposed ward or family members
  • Reporting requirements: A conservator is required to report regularly to the court regarding the ward's personal circumstances and to submit detailed accountings showing how the ward's money is spent. Court approval may be required for certain expenditures and for selling the ward's property.