Guardianship and Conservatorship
Financial Planning Tool Kit
August 24, 2018
This excerpt from the Autism Speaks Special Needs Financial Planning Tool Kit was written by Reilly Morrisson and Ginny Duhon, Trust Advisors with SunTrust Bank's Special Needs Trust Group.
When an individual turns 18, he or she is presumed competent to make decisions about his or her person and property unless a court determines otherwise. Up until age 18, parents are the “natural guardians” of their minor child and have legal authority to make decisions about their child’s health, education, safety and support. If you feel that at 18, your child is not or will not be able to make important legal decisions on his or her own behalf, you may want to consider pursuing guardianship so that you can retain your ability to make such decisions for him or her.
Ultimately, an Order of guardianship or conservatorship terminates or severely limits the ward’s rights and freedoms. State laws require that less restrictive alternatives are explored before guardianship or conservatorship is ordered. Some alternatives include Power of Attorney - a grant of shared authority by one person (the principal) to another (the agent or attorney-in-fact) to make decisions regarding finances or health care – and Representative or Protective Payee – a person appointed to manage benefits like Social Security.
Adult Guardian of the Person
Adult guardianship is a court proceeding to appoint an individual to make decisions about a person’s health, safety, support, care, and place of residence. The procedure for obtaining a guardianship varies from state-to-state, but generally the process is initiated by an interested party filing a Petition with the court that states probable cause as to why a guardianship is necessary.
The proposed ward and other interested parties – such as the proposed ward’s spouse, children and relatives – will receive a copy of the Petition, and the court will appoint an independent evaluator to assess the ward and make a written recommendation about the ward’s capacity. A hearing is held after the completion of the evaluation where the court will make a determination regarding the necessity of a guardianship. The ward has a right to hire counsel to represent him or her or the court will provide counsel.
Once a guardian is appointed, the court may limit or terminate the ward’s right to consent to medical treatment, establish a residence, change domicile or vote. A guardian of the person may exercise most of the ward’s personal rights with the exception of the right to vote. The guardian must make decisions that are always in the ward’s best interests, cooperate with the conservator, if any, and encourage the ward’s participation in personal decisions so he or she may become more independent and regain the ability to manage his or her own personal affairs. The guardian must also file an annual report with the court to advise of the ward’s personal status
Conservatorship is intended to provide protection and management for the property of adults who lack sufficient capacity to make or communicate significant responsible decisions regarding the management of their property. Conservatorship not only appoints an individual with the authority to make these decisions on behalf of the ward, but it also removes the ward’s right and ability to make certain decisions and enter into agreements of his or her own.
Some of the rights that are removed from the ward are:
- the right to make, modify, or terminate contracts;
- the right to buy, sell or otherwise dispose of property;
- the right to conduct business or commercial transactions;
- the right to revoke a revocable trust; and
- the right to bring or defend an action at law.
The process for obtaining a conservatorship is similar to the process of obtaining a guardianship, and the two are most often done in tandem. Courts generally seek the least restrictive alternative to conservatorship and will tailor the conservatorship so that the ward is allowed to maintain those rights that he or she is still capable of exercising in a responsible manner.
Typically, courts will not require a conservator if the ward’s only income and resources are payments from the Social Security Administration. The Social Security Administration has its own process for selecting and appointing an individual to receive and administer Social Security payments on the behalf of individuals who lack sufficient capacity to manage the payments themselves. This process is called the Representative Payee program and the Representative Payee will be responsible for accounting to the Social Security Administration for the use of the recipient’s funds.
Most courts view the Representative Payee program as a less restrictive alternative to conservatorship. Additionally, most courts will often find a durable power of attorney or trust to be a less restrictive alternative, provided they are adequately protecting the proposed ward’s interests.
The conservator owes the ward a duty of loyalty, reasonable care, diligence, and prudence and is responsible for receiving, collecting, and making decisions regarding the ward’s property. The conservator should strive to encourage the ward to participate in decisions and assist the ward, to the extent feasible, to develop the ability to manage his or her own property. The conservator should consider the ward’s expressed desires and values while also acting in the ward’s best interest when making decisions on the ward’s behalf.
The conservator is required to provide annual accountings to the court and the court will remain involved throughout the conservatorship. Conservators are granted the authority to retain, invest and disburse funds for the ward, but this authority is also limited by state statue. From time to-time, the conservator will need additional court approval to take certain actions, such as conducting estate planning, gifting or selling personal property, and purchasing or selling real estate. The conservatorship will continue until the ward regains capacity or passes away.