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Conservatorship, Guardianship or Powers of Attorney?

October 26, 2021

Conservatorships are in the news most recently due to challenges in the Britney Spears conservatorship. But Dylan Metzner says don’t be afraid of guardianships or conservatorships. There is more general transparency for interested parties in guardianships and conservatorships than what is available through powers of attorney. Watch or read the 2-minute summary here. 

A conservatorship and a guardianship are court proceedings where the court appoints an individual, professional fiduciary, or an entity to make certain decisions on behalf of a person, or principal, the court determines needs protection.

With a guardianship, the court appoints a guardian who is charged with overseeing the care and custody of a person. Care and custody can be as simple as taking the person to doctors’ appointments but can also include determining when the person needs in-home care or to go to a continuing care facility.

A conservatorship, on the other hand, is where the court appoints a conservator who is responsible for managing the assets and financial affairs of a person whom the court determines is in need of protection. A person may be subject to both a conservatorship and a guardianship or one without the other.

The conservatorship and guardianship processes start when a petition is filed with a court in the state and county where the person who is in need of a guardianship or conservatorship resides. The petition must be filed to be an “interested person”, who is generally a family member or someone the individual has selected to make financial and medical decisions either through the designation of guardian or conservator, or in some instances, a power or durable power of attorney.

Avoiding court

Is there an alternative to conservatorships and guardianships? Yes, powers of attorney are a great tool to avoid court proceedings. They are designed to make guardianships or conservatorships unnecessary, unless a dispute arises.

Powers of attorney come in different packages. A medical durable power of attorney appoints an agent who will be responsible for overseeing the care of the person creating the power of attorney.  A financial durable power of attorney appoints an agent who will be responsible for overseeing the financial aspects of the person creating  the power of attorney.

In executing a durable power of attorney agreement, the person creating the power of attorney (principal) names someone else (such as, a spouse, family member or other third party) who they want to serve as their agent.

The issue of transparency

There are shortcomings in using a power of attorney. While agents must be able to account to the principal for their actions by keeping accounts and tracking records of receipts and disbursements, agents are not obligated to disclose those records to anyone other than the principal.

This makes it difficult for family members who are concerned that an agent may be overstepping their bounds or doing things that are not in the principal’s best interest to double-check affairs are in order.

Challenging agent actions 

When a family or interested party makes a reasonable request for disclosure that an agent refuses, generally the only recourse for the family is to revert to a conservatorship or a guardianship in court, which both offer transaction transparency. A conservator and guardian must file annual reports with the court, or more often should the court require. The same transparency is available to interested parties when a conservator or guardian is appointed, giving family members who want to get some peace of mind by seeing the actions of a person in charge of their loved one’s finances.

Conservatorships are in the news most recently due to challenges in the Britney Spears conservatorship. But don’t be afraid of guardianships or conservatorships. While powers of attorney avoid court proceedings, there is more general transparency for interested parties in these vehicles than what is available through powers of attorney.

Dylan Metzner counsels individuals and families throughout the United States and internationally with their tax, estate and private wealth planning needs, guiding them through the maze of laws and practical considerations in moving each client closer to achieving goals and resolving outstanding issues. Reach out to Dylan at dmetzner@joneskeller.com for private wealth management guidance.

This information is not intended as legal advice. Readers should seek specific legal advice before acting with regard to the matters addressed above.