What Is a Conservatorship?

If someone is unable to handle their financial or personal affairs, they may be placed in a conservatorship. A conservatorship is a legal arrangement whereby a judge decides who should manage a person’s affairs. A conservator is appointed to make decisions on behalf of the conservatee — the person who’s mentally or physically incapacitated. In this article, we’ll explain how a conservatorship works as well as the duties and responsibilities of a conservator.

What is a conservatorship?

A conservatorship is a legal appointment whereby a judge designates someone to manage certain personal matters, including finances, for someone who lacks the physical or mental capacity to make decisions on their own behalf. The terms conservatorship and adult guardianship are often used interchangeably, but in some states, conservatorship refers to an arrangement for an adult ward, while guardianship refers to an arrangement to handle a minor’s affairs.

The process of establishing a conservatorship usually happens when someone petitions a court to appoint a conservator for an individual. Before a person can be placed in a conservatorship, they must undergo a mental health examination. A diagnosis from a psychiatrist or another type of physician is usually required before a court will approve a conservatorship. A judge may appoint a family member — often the person’s spouse, parent, or adult child — or nonrelative to serve as conservator.

Some examples of matters a conservator may handle on the conservatee’s behalf include:

• Managing finances, including investments.
• Determining where the conservatee lives, including whether they need to be placed in an assisted living or long-term-care facility.
• Paying the conservatee’s bills and taxes using the conservatee’s assets.
• Signing legal documents on the conservatee’s behalf.
• Maintaining adequate insurance on the conservatee’s property.
• Paying the conservatee’s food, healthcare, and education expenses.

A conservator has a fiduciary responsibility, which means they’re required to act in the conservatee’s best interest. Conservators are prohibited from commingling their personal assets with the conservatee’s assets, borrowing from the person’s estate, or making highly risky investments using the person’s money. Conservators are usually paid for their services from the conservatee’s assets as long as the court confirms the compensation is reasonable.

The conservator is required to file an inventory of the conservatee’s assets in court and to provide an accounting of any transactions involving the conservatee’s property.

When is conservatorship needed?

There are a few situations where a conservatorship may become necessary. Generally speaking, there are three primary scenarios:

1. Metal health problems

Individuals who suffer from severe mental illness may be incapable of making informed and rational financial decisions. As previously mentioned, seeking conservatorship on this basis requires an independent medical evaluation by a healthcare professional.

Not all mental health problems can be used to justify a conservatorship. It entirely depends on the situation and its impact on an individual’s life. The most common mental health problem that warrants a conservatorship is bipolar disorder, where an individual may make irrational financial decisions during a manic episode.

2. Reduced cognitive ability

Individuals who suffer from reduced cognitive ability, either due to old age or intellectual disabilities, may require a conservatorship to act on their behalf on complex financial decisions.

3. Greater protection

Conservatorships aren’t just for mentally impaired individuals. Financial scams and fraud are growing problems and are increasingly more prevalent in everyday life. An individual susceptible to scams may require additional protections to avoid money being lured into losing all their money.

Types of conservatorships

There are two main categories of conservatorships: general and limited. General conservatorships are commonly used to manage the affairs of elderly people with advanced Alzheimer’s disease or dementia. However, a general conservator may be appointed for a younger person in some circumstances, such as if they’re in a coma or otherwise severely disabled. Limited conservatorships are often used for adults with developmental disabilities and frequently allow for greater autonomy.

Separate conservatorships can be appointed for the same person: A conservator of the estate is charged with managing the person’s finances, while a conservator of the person is tasked with making decisions pertaining to their health and safety. The same person also can serve in both roles at the same time.

Although a conservatorship is typically used for individuals, occasionally, a business or organisation can be placed in a conservatorship. This typically occurs when a company becomes insolvent and can no longer operate. Usually the company will be placed under the management of a government agency or another regulatory body.

How to become a conservator

There are a number of steps involved in becoming a conservator.

1. Check eligibility

There are not many key requirements to be eligible to become a conservator when applying to the courts. Applicants must be at least 18 years old and demonstrate good decision-making skills when acting on behalf of a vulnerable person.

2. Submit an application to become a deputy

Assuming an individual is eligible, they need to complete several forms, including a COP1, COP3, and COP4. These need to be filed with the Court of Protection which will review the application for deputyship (COP1), assessment of capacity for the vulnerable individual (COP3), and the personal and financial circumstances of the applicant (COP4).

3. Notify the vulnerable person

Once the Court of Protection receives the application and begins processing it, the applicant will be informed. At this point the vulnerable person must be notified that the application is being processed. This also gives them the opportunity to fill out an acknowledgement form (COP5) to provide evidence for or against the conservatorship.

There is a 14-day period where any objections can be raised after notifying all relevant parties, after which an evaluation will take place, potentially taking several months. Once the review has been completed, some of the possible outcomes are:

• The application is rejected.
• The application is approved.
• Request for additional information.

Example of a conservatorship: Britney Spears

One of the most publicised examples of a conservatorship involved pop superstar Britney Spears and her father, Jamie Spears. In 2008, Britney Spears was placed in a conservatorship after her father petitioned a California court. The day before her father filed the petition, the pop star had been admitted to UCLA Medical Center on a psychiatric hold after police came to her home over a child custody dispute.

Jamie Spears was named both conservator of the estate and conservator of the person for his daughter, though he stepped down from his role as conservator of the person in 2019 and was replaced by a court-appointed third party. He remained the conservator of the estate for 13 years.

The arrangement drew scrutiny when Britney Spears began publicly speaking out against it and as her fans mounted the #FreeBritney campaign. Advocates for Britney Spears pointed out that despite her father’s claims that she couldn’t manage her own affairs, the star was able to record three albums and maintain a gruelling performance schedule while the conservatorship was in effect. Documents obtained by The New York Times revealed that while Britney Spears received a $2,000 weekly allowance, her father received $16,000 a month for his role, plus $2,000 for office space.

Alternatives to conservatorship

A conservatorship isn’t the only option to help protect individuals and their wealth. Depending on the circumstances, there are several alternatives that may prove to be more suitable.

1. Power of Attorney

A power of attorney is a legal contract where an individual can appoint someone else, known as an agent, to handle all their financial affairs. Depending on the type, a power of attorney contract can remain in place even after someone becomes incapacitated, either mentally or physically.

These contracts are typically custom-tailored, allowing an individual to limit the control of the agent and retain some autonomy over their finances. It’s also typically cheaper to establish compared to a conservatorship.

2. Advanced Health Care Directive

Similar to a power of attorney, an advanced health care directive is a legal contract that grants someone the power to make medical decisions on behalf of an individual should they become incapacitated.

3. Living Trust

By establishing a living trust, a professional known as the trustee is appointed to manage all the financial assets placed into the Trust. This not only helps protect and grow wealth but also greatly simplifies the probate process, as assets in a living trust can bypass probate entirely.

4. Supported Decision Making

For individuals who wish to remain independent in their decision-making but acknowledge they require assistance, a supported decision-making network may be suitable. This is a group of individuals, usually friends, family members, and professionals, who provide advice on different financial matters.

5. Joint Bank Accounts

A joint bank account allows another individual to access and manage funds. This can help ensure bills are paid on time, and expenses are kept under control. While it doesn’t provide as much control as a conservatorship, it’s far easier and quicker to establish.

6. Representative Payee

Individuals can appoint a representative payee who will manage and handle all government benefits on their behalf. This can provide extra protection to ensure benefits are used for the right reasons and needs of the individual. There is also extra security as the payee is subject to oversight by the Department of Social Security.