Financial Conservatorships for the Elderly or Disabled

The term conservatorship is usually used to describe legal authority over the financial affairs of another person. Guardianship also is used to describe someone who has authority over health care decisions and other matters pertaining to living arrangements. This article will focus on control over an individual’s financial affairs.

Conservatorships not only grant authority to a conservator, but the legal process restricts, limits, or removes the individual’s power to make any financial decisions on their own behalf. For example, a power of attorney authorizes a person to act for another but does not stop the person for whom they are acting from exercising these powers on their own. In some cases, it is important to limit, or remove, a person’s power to act on their own. This may be particularly true in the case of the elderly, disabled or infirm.

The advantage of a conservatorship is that it can safeguard the elderly and disabled against fraud and protect their privacy and their assets. The establishment of a conservatorship has three basic effects. It shifts the responsibility of making financial decisions from the individual to the court-appointed conservator. Secondly, it imposes significant limitations on the ability of the conservatee to take actions with regard to their finances. Thirdly, it provides protection of the conservatee’s funds from fraud, misappropriation, and financial abuse.

Courts grant conservatorship over an individual only if the court is satisfied, after notice and hearing, that the individual is unable to adequately handle their own financial affairs. These proceedings may be expensive and require the assistance of an attorney. Court and related legal costs and expenses are taken out of the conservatee’s assets. These costs and expenses may be avoided by most individuals who have properly prepared an estate plan in advance. The costs of planning ahead in the preparation of an estate plan may be far less than the costs associated with the appointment of a conservator. However, if this planning does not exist, courts will ensure that someone is ultimately appointed to protect the assets of the elderly and disabled.