 |
| The conservator is court appointed and may be responsible for financial decisions such as retirement planning, the purchase or sale of property and the movement of any other financial assets. (Getty Images) |
A conservatorship can be a welcomed safety net or a tool of abuse and neglect.
In the now-famous case of pop star Britney Spears, experts agree the conservatorship arrangement created around Spears is far from typical. But conservatorships and guardianships aren't just a reality of life in the spotlight. These arrangements are common among average citizens, are often a standard element included in the larger estate planning process and can lead to similarly contentious and painful situations for those subjected to them.
"Once you have a conservator in place, the burden is on you to prove you no longer need a conservatorship," says Russel Morgan, estate planning attorney and principal of Morgan Legal Group P.C. in New York. "I've seen all sides of it. The biggest issue in most cases is abuse of power or neglect. Either (the conservator) is doing something self-serving like spending money on something they shouldn't be or spending on themselves, or the alternative, where they're doing absolutely nothing – not helping the conservatee or providing the care they need."
Conservatorships and guardianships can be entered into when an individual is 18 years old or as an individual ages and loved ones find that other estate planning documents have fallen short. The laws guiding these arrangements can vary significantly across states. A conservatorship or guardianship is typically necessitated by a disability or injury that prevents an individual from caring for themselves.
Before creating one or naming one in your estate planning documents, learn more about these legal arrangements and how to protect yourself.
What Is a Conservatorship?
A conservatorship is created to allow one individual to manage another's finances.
The conservator is court appointed and may be responsible for financial decisions such as retirement planning, the purchase or sale of property and the movement of any other financial assets.
Estate planning attorneys may recommend a conservator or guardian be named in standard estate planning documents, such as the power of attorney. A conservator can be any adult, possibly a family member, who can be trusted with the responsibility of managing one's finances.
"Since a Conservator would be in charge of a person's assets, we nominate the same people who we nominate to serve as attorney-in-fact," Jennifer D. Taddeo, estate planning attorney and partner at Conn Kavanaugh in Boston, wrote in an email. "However, since a Guardian is in charge of the person themselves, we nominate the same people who are nominated to serve as health care agents in the client's health care proxy. Sometimes, these are the same, but if they're different, it is important for that difference to be reflected."
What Is a Guardianship?
A guardianship is created in cases where an individual cannot take care of themselves and requires another person to make some or all of their personal decisions. These might include decisions about one's medical care, support services, housing or finances, according to Scott Sparks, founder and CEO of Sparks Financial, a Northwestern Mutual Private Client Group in Colorado.
"Although a court appoints both a conservator and a guardian, a conservatorship is generally limited to financial decisions, while a guardianship covers personal decisions, such as medical care, and may, in some cases, also cover financial decisions," Scott Sparks wrote in an email.
A guardianship can be thought of as similar to a parent-child relationship.
Avoiding a Conservatorship or Guardianship
Most states also have laws in place meant to protect those placed in a conservatorship or guardianship. Guardianships in New York, for example, require that the individual meet certain medical requirements to be determined unable to care for oneself and the burden of proof to meet such restrictions is high, Morgan says.
Beyond such legal protections, individuals can seek professional help in preparing for future circumstances that may prevent them from managing their finances and personal affairs. Common estate planning documents such as wills, powers of attorney, beneficiary forms and health care proxies can help individuals avoid being placed into a conservatorship or guardianship as well as protect themselves and their loved ones.
"Without prior financial and estate planning, if you become unable to handle your financial affairs or make healthcare decisions, a court may need to appoint someone (a conservator or guardian) to act on your behalf," Taven Sparks, principal and private wealth advisor for Sparks Financial, wrote in an email. "With some planning, you can help ensure your wishes are followed, and your loved ones may be able to avoid the need for a court to intervene (and the cost and stress of such proceedings during an already trying time)."
A financial advisor and attorney can work together to determine whether a particular situation merits a conservatorship or guardianship and put plans in place to avoid these legal arrangements.
No comments:
Post a Comment