A conservatorship is formed when a court appoints someone to make decisions about another person’s assets and financial affairs. The appointee is typically referred to as the conservator, and the other person is normally called the conservatee or the protected person. The conservator usually performs tasks like paying bills, investing funds, entering into contracts on the conservatee’s behalf, and estate planning. The conservatee does not necessarily have to be declared legally incompetent in order for a conservatorship to be formed. Rather, the conservatee is deemed partly or completely unable to handle his or her finances.
The legal process for forming a conservatorship varies from one jurisdiction to another. In general, however, a petition is filed with a court sitting in a jurisdiction in which the conservatee resides. The person filing the petition is usually a family member or a nursing home administrator who has an interest in the conservatee’s well-being.
Before determining whether to grant a conservatorship, the court usually orders a medical evaluation of the conservatee. The court may also appoint a guardian ad litem, a neutral party who provides the court with an independent assessment of the conservatee. If the conservatee contests the conservatorship, a trial is usually held. During the trial, the court typically listens to testimony and reviews evidence before determining whether a conservator will be appointed.
If the court orders a conservatorship, it will usually issue a letter of authority that allows the conservator to make financial decisions on behalf of the conservatee. Once this letter is issued, the conservatee loses the right to handle his or her financial affairs. A court can end a conservatorship if it determines that the conservatee no longer needs financial assistance.
Ordinarily, a conservator must maintain an accounting of all of the estate's assets and any expenditures made on behalf of the conservatee. The conservator may be required to give an accounting of all financial transactions to the court on an annual basis. In addition, the conservator is often required to inventory all of the conservatee’s assets and provide the court with an inventory report. Conservators are normally compensated for their duties. The fees generally come from the conservatee’s estate and are normally subject to the court’s supervision.
A conservatorship is often distinguished from a guardianship. A guardianship is usually formed when a person needs help managing his or her personal affairs rather than finances. For example, a guardian usually makes decisions about an incapacitated person’s medical care or living arrangements.
