Impaired persons who are not legally competent to take care of their own financial affairs sometimes need the services of a Court appointed Conservator. Children under the age of 18 who receive large sums of money generally will need a Conservator appointed to manage their financial affairs until they turn age 18. Parents may be required to be appointed as a Conservator in some instances. Other impaired individuals may have a similar need. Sometimes such individuals can voluntarily consent to the appointment of a Conservator, but other times they may not be capable of doing so and an Involuntary Conservatorship will need to be established.
An interested individual, often a family member, will hire a lawyer to Petition the Court to be named the Conservator of the impaired person who is called a Conservatee of a Ward. If the Conservatee does not voluntarily consent and is over the age of 18, then medical examinations may be required before the Court holds a hearing to determine whether a Conservatorship is necessary.
A Conservator will usually be required to sign an oath and procure a bond based upon the size of the Conservatee’s estate. Often the bond amount may be lowered if the Court, the Conservator, and the financial institution agree to enter an order “freezing” a portion of the assets to prevent liquidation without further Court order.
The Conservator acts in a fiduciary capacity for the benefit of the Conservatee. The Conservator must prepare an initial Inventory of the assets and liabilities of the Conservatee and file it with the Court. The Conservator then can pay the reasonable and necessary expenses of the Conservatee as they become due; provided however, that the Conservator cannot pay itself or the attorney without Court approval.
The Conservator may liquidate assets of the estate, if that is in the best interest of the estate, but sometimes must seek and obtain court approval with the help of his or her lawyer, before doing so.
Annually, the Conservator must file an accounting with the Court setting forth all the income and expense of the estate during the preceding year. At that time the Conservator can petition the Court for payment of the Conservator’s and the attorney’s fees. The Conservator can be paid for his or her time, but detailed records must be kept showing the date, the amount of time spent and the purpose.
Reasonable and necessary expenses that the Conservator can pay without pre-approval by the Court, may often vary under the circumstances, based upon the needs of the Conservatee and the standards that the Conservatee may have become accustomed. When in doubt, the Conservator should petition the Court in advance of incurring the expense and ask the Court to approve the payment.
Generally, Conservatorships continue until the legal impairment of the Conservatee ends (such as the Conservatee obtaining age 18, the Conservatee is no longer legally incompetent or the Conservatee dies). Before funds can be paid to the Conservatee or his or her estate, the Conservator will need to be discharged by the Court which will require approval of a final accounting. Upon payment of the assets to the Conservatee or the Decedent’s Estate, the Conservator will obtain a receipt for the same that is filed with the Court. The Court will then enter an Order of Final Discharge and the Order may be provided to the bonding company to allow the termination of the bond and the cessation of premiums.
Generally, there is minimal involvement by the lawyers after the Conservatorship is established unless special circumstances arise or needs occur.