What is guardianship and conservatorship?
Guardianship and conservatorship typically result from Court proceedings in which the court appoints someone (a “guardian,” “conservator,”) to manage another person’s personal care decisions and financial affairs respectively.
Generally those proceedings are permitted only when a person becomes so incapacitated that he or she is unable to make financial or personal decisions, and has no other viable option for delegating these duties to another (e.g. through a durable power of attorney, living trust, or some other means). Using these standards, for instance, conservatorships might be established for people who are in a coma, suffering from advanced stages of Alzheimer’s disease, or have other serious injuries or illnesses.
Under Minnesota law, guardianships and conservatorships are used to appoint a person when an individual is unable to make personal decisions and is also unable to meet his or her personal and financial needs, even with appropriate technological assistance. The Court orders the appointment of a person (a conservator or guardian) to act as a decision maker for another person (the protected person or ward). A court must base this decision on clear and convincing evidence that the protected person or ward has been found to be unable to make necessary decisions on his or her own behalf and the Court makes a finding of incapacity. Once a court makes a finding of incapacity, the person no longer has the right to manage his or her affairs until proven capable.
What is the difference between a conservatorship and a guardianship?
A conservator is appointed to make financial decisions for the protected person (conservatee). The conservator typically has the power to collect all the conservatee's assets, pay bills, make investments and perform other financial functions, as well as engaging in estate planning, including the right, with permission of the court, to amend or revoke the protected person’s will. However, the conservator must seek court approval for transactions such as the purchase or sale of real property, gifting of assets, or revoking the protected person’s will. A guardian is appointed to perform duties related to personal care, custody and control. The guardian has the authority to make decisions such as where the ward will live and what medical treatment he or she will receive.
What are the duties of a guardian?
Many duties are required of guardians. The guardian has the duty to ensure that provisions have been made for the ward’s care and comfort, including food, health care, and social requirements. Whenever possible, the guardian should meet these needs through governmental benefits or services for which the ward is entitled, rather than from the ward’s estate.
The guardian also shall take reasonable care of the ward’s clothing, furniture, and other personal effects. The guardian must file a notice of intent to dispose prior to the disposition or sale of the ward’s personal effects. The guardian must also know the religious faith of the ward.
The guardian must file an annual report of personal well being, signed under oath, within thirty (30) days of the anniversary date of the appointment as guardian. The report must contain the current mental, physical, and social condition of the ward; the living arrangements for all addresses of the ward during the past years; the medical, educational, vocational, and other services provided to the ward; and a recommendation as to the need for continued guardianship.
What are the duties of a conservator?
Many duties are required of conservators. Within 60 days after being appointed, a conservator must inventory the protected person’s estate, noting the fair market value of any real estate, furniture, clothing, mortgages, bonds, notes or debts, and any other personal property. Thereafter, the conservator must file an annual accounting with the court showing in detail all property received and disbursed, and listing all property on hand.
The conservator must pay for the support, maintenance, and education of a protected person, using government benefits when available, paying the protected person’s debts, and managing the protected person’s estate. Often the conservator must also post a bond — a kind of insurance policy that pays if the conservator steals or misuses property. The conservator may also have to receive court approval for certain transactions, such as selling real estate or making slightly risky investments. A conservator’s duties terminate at death or when capacity is restored.
Does a guardian or conservator have absolute power and authority?
The law allows the court to grant the guardian or conservator limited power to exercise authority over the ward or protected person. A guardian or conservator may only use his or her authority as necessary to provide care and services for the ward or protected person. The Court should ensure that decisions of a guardian or conservator will not be overly restrictive of the ward’s or protected person’s rights.
Why might I need a conservator or guardian?
If you have other informal arrangements with relatives or formal planning arrangements, such as a durable power of attorney, you may not need to do conservatorship planning. However, if it is likely that someone would challenge your planning arrangements (for example, if there might be disagreements within the family); you may want to consider using conservatorship planning as a “backup” to your other planning arrangements.
Remember, anyone can petition to be a conservator or guardian for an incapacitated person, and a conservator or guardian can revoke or terminate prior planning arrangements. By choosing a person you would want to be your conservator or guardian, you protect yourself against the appointment of someone you would not want to be in this position.
How do I establish a conservatorship?
“Conservatorship planning” (also called “nomination of conservator”) involves a written document, like a will, in which you name the person you want for your conservator. You can also include instructions on how you want your personal and financial matters handled by your conservator. For example, the conservator could be instructed to manage your property, know where you would like to live, and be informed about your wishes regarding health care (the same person could also serve as your health care power of attorney). Then, if you should become incapacitated and need a conservator, the Court must name the person you chose and order that your instructions be followed, unless the Court finds that this would not be in your best interests. Be aware that the person you choose is not required to serve as your conservator — so choose a reliable person and discuss your plan with the person in advance to make sure he or she agrees with it. You should consult an attorney for conservatorship planning.
Any person may petition the court for the appointment of a conservator of an individual. The petition must contain personal information about the individual, list his or her closest relatives, state facts establishing why the individual cannot manage financial affairs, and/or make decisions about personal care. Once a petition is filed with the court, a court investigator is appointed to interview the proposed protected person. The investigator reports back to the court with an opinion on whether or not the appointment of a conservator is justified.
The petition is set for hearing and the protected person must appear in court unless medically unable to do so. Based on the petition, the judge determines the investigator’s report, any evidence taken during the hearing, whether or not the conservatorship is required, and what types of special powers may be granted to the conservator. The proposed protected person has a right to have an attorney represent his or her interests in conservatorship proceedings.
What are the advantages of a conservatorship?
Conservatorships are subject to court supervision which provides a powerful safeguard for an incapacitated adult’s property. Because the conservator is required to file an inventory of the protected person’s property, and provide accountings and other reports to the court, a conservatorship offers a higher degree of protection to the protected person than other management mechanisms.
A conservatorship also allows for the management of an incapacitated person’s affairs when he or she does not have an alternative mechanism in place to do so. Another advantage to a conservatorship proceeding is that it provides a method to assist an incapacitated individual who may be unwilling to accept such assistance.
What are the disadvantages of a conservatorship?
Conservatorships are time-consuming and expensive; they often require court hearings and the ongoing assistance of a lawyer. The paperwork can also be a hassle because the conservator must keep detailed records and file court papers on a regular basis.
The conservatorship can also be a cumbersome method of managing a person’s financial affairs, since the conservator must return to court for approval of certain transactions, such as selling real property, borrowing money, setting up a trust, etc. These formal court hearings require additional attorney fees and can create delays in completing these transactions.
In addition, as noted above, a conservator must usually post a bond. The bond premiums are paid by the protected person’s estate. Bonds are usually required, but may prove to be an unnecessary expense if the conservator is competent and trustworthy.
Another disadvantage is that occasionally a conservator will mismanage a protected person’s assets. Common abuses range from reckless handling of the protected person’s assets to outright theft. Although each state has rules and procedures designed to prevent mishandling of assets, few have the resources to keep an eye on conservators and follow through if they spot trouble. Many cases of incompetence or abuse go unnoticed.
Finally, a conservatorship can be emotionally trying for the protected person. All court proceedings and documents are public records, which can be embarrassing for someone who values independence and privacy.
What are the alternatives to a conservatorship or guardianship?
Revocable living trust. Through the establishment of a revocable living trust the individual can appoint a trustee to manage his or her financial affairs and thus can avoid the need for an appointment of a conservator of the estate. A person must be competent to establish a living trust.
Durable power of attorney for asset management. A durable power of attorney is a document in which the individual can delegate to an agent the power to make financial transactions on his behalf if he is unable to do so himself. However, the individual must be competent to execute a durable power of attorney and the agent acting under the durable power of attorney is not subject to court review of his or her actions.
Health care directive. An individual can nominate an agent to make health care decisions on his behalf in a health care directive. These health care decisions can include the decision to withdraw or continue life support systems. The individual can also give specific instructions as to health care in the directive. As with a living trust and durable power of attorney for asset management, a person must be competent to execute a health care directive.
Joint tenancy property. While the joint tenant may make decisions regarding the property that is held in joint tenancy, there are significant risks that make this form of ownership a poor choice for the purposes of asset management. In particular, in a joint bank account a joint tenancy allows either joint tenant to access the funds and thus one joint tenant can withdraw all the joint tenancy funds. Further, there can be adverse tax and estate planning consequences as a result of creating a joint tenancy. | 
