What’s the Difference between a Conservatorship and a Guardianship?

A conservatorship is created to let one person manage another’s finances. The conservator is court- appointed and may be responsible for financial decisions, such as retirement planning, the purchase or sale of property and the transfer of other financial assets.

The laws for conservatorships and guardianships can vary widely in different states. A conservatorship or guardianship is typically necessitated by a disability or injury that prevents a person from caring for themselves.

US News & World Report’s recent article entitled “How Conservatorships Can Prop Up or Tear Down a Loved One” explains that once you have a conservator in place, the burden is on you to prove you no longer need it. The biggest issue in most cases is abuse of power or neglect. Either (the conservator) is doing something self-serving, such as spending money on something other than the senior’s care, or they’re not helping the conservatee, or providing the care they need.

Estate planning attorneys may recommend a conservator or guardian be named in standard estate planning documents, like a power of attorney. A conservator can be any adult, possibly a family member, who is tasked with the responsibility of managing the person’s finances.

Because a conservator would be in charge of a person’s assets, it’s common for the same person to be named to serve as attorney-in-fact or agent with a power of attorney. However, because a guardian is in charge of the person themselves, it’s wise to nominate the same people who are named to serve as health care agents in the client’s health care proxy. Sometimes, these are the same, but if they’re different, it is important for that difference to be stated.

A guardianship is created in cases when a person can’t take care of themselves and requires another person to make some or all of their personal decisions. This might include decisions about his or her medical care, support services, housing, or finances. While a court appoints both a conservator and a guardian, a conservatorship is generally limited to financial decisions. In contrast, a guardianship deals with personal decisions, like medical care, and may, in some instances, also cover financial decisions.

Just about every state has laws designed to protect those placed in a conservatorship or guardianship. For example, in New York, individuals must satisfy medical requirements to be determined unable to care for oneself. The burden of proof to meet such restrictions is high.

In addition, individuals can seek professional help in preparing for future circumstances that may prevent them from managing their finances and personal affairs. This includes estate planning documents, such as wills, powers of attorney, beneficiary forms and health care proxies.

Reference: US News & World Report (Aug. 19, 2021) “How Conservatorships Can Prop Up or Tear Down a Loved One”

What Is the Process of Conservatorship?

The headlines surrounding Britney Spears’ fight against her father’s conservatorship have kept the issue in the public eye. It’s how her father controls her finances and her life, dating back to 2008 when she suffered a very public mental health crisis. Her $60 million fortune is controlled by her father Jamie Spears, according to the article “Britney Spears Is Under Conservatorship. Here’s How That’s Supposed to Work” from npr.com. In this case, only her father has the ability to negotiate business opportunities and other financial arrangements.

Britney made a passionate plea before a Los Angeles Superior Court judge to end the conservatorship, saying she is exploited, unable to sleep, depressed and cries daily.

Her conservatorship was set up because of the court’s agreement in 2008 with her father that she was no longer able to manage her own affairs. The judge appointed Jamie Spears, known as the “conservator” to care for another adult (the “conservatee”), who is deemed to be unable to care for themselves.

The conservatee does not lose all rights. They may still take part in important decisions affecting their property and way of life. They have a right to be treated with understanding and respect, and they have basic human rights. However, the court is saying that decisions about where to live and how to support the person need to be made by someone else. This is an extreme situation and is usually done only as a last resort. Once the court has appointed a conservatorship, only a court can lift it.

Conservatorships are usually used for people with a severe cognitive impairment or older people with severe dementia. Guardianships are also appointed for individuals with severe developmental disabilities. Spears is not the typical person under conservatorship. In the last 13 years, she has released albums, judged on The X Factor and earned an estimated $148 million performing in Las Vegas. Spears told the court she should not be in a conservatorship, if she can work and provide money and pay other people.

Many reforms to guardianship laws have taken place, including one principle that guardianship should only extend to the areas of the person’s life they are not able to manage. However, the Spears’ conservatorship includes every aspect of her personal affairs, as well as her property management.

Individuals under guardianship don’t select their guardian, but they may in some instances make recommendations and requests. The court is supposed to give serious consideration to their requests. The court does not seem to be recognizing this or other changes in Britney Spears’ case. She has been asking since 2014 for her father to be removed from his prime role in the conservatorship, and in 2020 she asked the court to suspend her father from his role entirely.

Family members are usually named as guardians, but there can be bankers, or professional guardians named. A wealth management company was added to Spears’ conservatorship in recent months as a co-conservator, but her father remains in charge of all aspects of her life.

Ending a guardianship is difficult, unless the guardianship has been set up for a specific length of time. If there’s a lot of money involved, things can get complicated. The guardian may not agree to steps to modify the guardianship because they will lose income. There’s a real conflict of interest in this case, as Spears’ father is also her business manager.

There is a trend towards avoiding guardianship and having a person or a handful of people who can help with decision making, while permitting the person to be involved in some way. However, the Britney Spears case is unlike any conservatorship case.

Reference: npr.com (June 24, 2021) “Britney Spears Is Under Conservatorship. Here’s How That’s Supposed to Work”

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Read more about the article What Should My Estate Plan Include?
Estate Plan, Living Will, and Healthcare Power of Attorney documents

What Should My Estate Plan Include?

In the COVID-19 pandemic, the two most critical documents to have are medical and financial powers of attorney. You should name someone to do your banking or make your medical decisions, if you are quarantined in your home, admitted to the hospital, or become incapacitated. When you have those in place, you need to create a comprehensive estate plan.

The Huffington Post’s recent article entitled “A Guide To Estate Planning During The Coronavirus Pandemic” says that almost everyone should have an estate plan—even if there’s no major health threat. If you don’t have one, right now is a great time to put it together. Let’s look at the documents you should have and what they mean.

  1. A Financial Power of Attorney. This is a legal document that gives your agent authority to take care of your financial affairs and protect your assets by acting on your behalf. For example, your agent can pay bills, write checks, make deposits, sell or purchase assets, or file your tax returns. Without an FPOA, there’s no one who can act on your behalf. Family members will have to petition the probate court to appoint a guardian to have these powers, and this can be a time-consuming and expensive process.
  2. A Health Care Power of Attorney. Like a financial power of attorney, this legal document gives an agent the power to make health care decisions on your behalf, if you become incompetent or incapacitated. If you’re over the age of 18 and don’t have an HCPOA, your family members will have to ask the probate court to again appoint a guardian with these powers.
  3. A Living Will (Advance Health Care Directive). This allows you to legally determine the type of end-of-life treatment you want to receive, in the event you become terminally ill or permanently unconscious and cannot survive without life support. Without a living will, the decision to remove life support is thrust upon your health care agent or family members, and it can be an extremely stressful decision. If you draft a living will, you detail your wishes and take that decision out of their hands.
  4. A HIPAA Waiver. An advance health care directive will likely contain language that allows your agent to access your medical records, but frequently hospitals will refuse access to medical information without a separate HIPAA waiver. This lets your agents and family members access your medical data so they can speak freely with your physicians, if there is a medical emergency or you become incapacitated.
  5. A Will. A last will and testament is a legal document through which you direct how you want your assets disbursed when you pass away. It also allows you to name an executor to oversee the distribution of your assets. Without a will, the distribution of your assets will be dictated by state law, and the court will name someone to oversee the administration of your estate. A will also lets you name a guardian to take care of your minor children.
  6. A Living Trust. A revocable living trust is a legal tool whereby you create an entity to hold title to your assets. You can change your trust at any time, and you can set it up to outlive you. In the event you become incapacitated or are unable to manage your estate, your trust will bypass a court-appointed conservatorship. A trust also gives you privacy concerning the details of your estate, because it avoids probate, which is a public process. A living trust can also help provide for the care, support, and education of your children, by releasing funds or assets to them at an age you set. A living trust can also leave your assets to your children in a way that will lessen the ability of their creditors or ex-spouses to take your children’s inheritance from them.

Speak with your estate planning attorney to get these documents put in place before it is too late. To learn more about this and other estate planning blogs click here.

Reference: The Huffington Post (April 7, 2020) “A Guide To Estate Planning During The Coronavirus Pandemic”

How is a Guardianship Determined?

Because the courts call guardianship “a massive curtailment of liberty,” it’s important that guardianship be used only when necessary.

The Pauls Valley Democrat’s recent article asks, “Guardianship – What is sufficient incapacity?” As the article explains, courts must be certain that an individual is truly “incapacitated.”

For example, Oklahoma law defines an incapacitated person as a person 18 years or older, who is impaired by reason of:

  1. Mental illness;
  2. Intellectual or developmental disability;
  3. Physical illness or disability; or
  4. Drug or alcohol dependency.

In addition, an incapacitated person’s ability to receive and evaluate information or to communicate decisions is impaired to such a level that the person (i) lacks capacity to maintain health and safety; or (ii) is unable to manage financial resources.

A person who is requesting to be appointed guardian by the court must show evidence to prove the person’s incapacity. This evidence is typically presented with the professional opinion of medical, psychological, or administrative bodies.

In some instances, a court may initiate its own investigation with known medical experts. In these cases, the type of professional chosen to provide an opinion should match the needs of the person (the “ward”), who will be subject to guardianship.

The court will receive this evidence and if it’s acceptable, in many cases, require that the experts provide a plan for the care and administration of the ward and his assets. This plan will become a control measure, as well as guidance for the guardian who’s appointed.

These controls will include regular monitoring and reports of performance back to the court.

If you are interested in more information about guardianship in Utah, visit our website here.

Reference: Pauls Valley Democrat (Jan. 23, 2020) “Guardianship – What is sufficient incapacity?”

How Does a Conservatorship Work?

Millennials, now in their 30s, need to begin thinking about caring for their boomer parents, as medical, financial and mental health needs come up. For lucky families, this will mean conversations with travel agents and financial advisors. For those not so fortunate, it will mean conversations with doctors, nursing home staff and, in some cases, with lawyers regarding conservatorships, says KAKE.com in the article “What is a Conservatorship and How Does It Work?”

A conservatorship is a form of legal guardianship of an adult. The conservator has legal authority over certain parts of the person’s life. It may be a “limited conservatorship,” where only specific matters are under the conservator’s control, like health or finances. The “full conservatorship” gives the conservator complete control over the person’s life, in the same way that a parent has legal control over a child.

Conservatorship is granted when the person no longer has the capacity to make decisions on their own behalf. In almost all cases, this is based on their mental capacity. While it can happen, physical incapacity rarely is acceptable for conservatorship to be awarded.

Some of the common reasons for conservatorship by way of mental incapacity, include if the person is in a coma, suffers from Alzheimer’s, dementia or severe mental illness, or has a permanent or genetic mental disability that prevents them from ever reaching legal maturity or independence.

Conservatorship is a legal proceeding, which must be granted by an officer or appointee of the court. It’s typically handled by a state probate court or family court. Hearings are usually held by a judge or a magistrate. A conservatorship may be part of estate planning. Most conservatorships require medical paperwork, but in all instances, the potential ward must have the opportunity to be heard by the decision maker and to present their case, if they wish, as to why conservatorship should not be granted. An individual also has the right to challenge the conservatorship, in court, at any time, if they disagree.

Power of Attorney may be used to accomplish some of the things that would be accomplished by a conservatorship. A POA gives a person the ability to make legally binding decisions for someone else, and the scope can be narrow or broad. The POA, however, is granted at the discretion of the person giving another person this power.

An estate planning attorney will be able to discuss all of the rights, responsibilities and fiduciary obligations of a conservatorship. Most have had experience with conservatorship and will be able to help the family and the individual make informed decisions in the best interest of the individual.

Reference: KAKE.com (December 11, 2019) “What is a Conservatorship and How Does It Work?”

How Did Alzheimer’s Impact the Estate Planning of These Famous People?

Forbes’ recent article, “Top 7 Celebrity Estates Impacted By Alzheimer’s Disease” looks at seven celebrity estates that were affected by Alzheimer’s disease.

  1. Rosa Parks. The civil rights icon died at 92 in 2005. She was suffering from Alzheimer’s disease. Legal battles over her estate continue to this day. Her estate plan left her assets to a charitable institution she created. However, her nieces and nephews challenged the validity of her will and trust, due to her mental deficiencies and allegations of undue influence. That claim was settled, but there have been fights over broken deals and leaked secrets, claimed mismanagement of her estate and assets, allegations of bribery and corruption and a battle over Rosa’s missing coat that she wore at the time of her famous arrest at the Alabama bus stop in 1955.
  2. Gene Wilder. Wilder’s widow–his fourth wife, Karen–and his adopted daughter didn’t fight over Gene’s estate after he died, which shows good estate planning. Wilder makes the list because of how his widow used her husband’s struggle—which she kept private while he was alive—to bring attention to the terrible disease, including permitting his Willy Wonka character to be used in a campaign to raise awareness.
  3. Aaron Spelling. The Hollywood producer left behind a reported fortune worth $500 million. His death certificate listed Alzheimer’s disease as a contributing factor. Spelling changed his estate plan just two months before he died, reducing the share to his daughter, actress Tori, and his son, Randy, to $800,000 each.
  4. Etta James. Legendary blues singer Etta James passed away in 2012, at 73. Her family said she had been struggling with Alzheimer’s disease for several years, and her illness ignited an ugly court battle between her husband of more than 40 years and her son from a prior relationship, over the right to make her medical and financial decisions, including control of her $1 million account. Her husband, Artis Mills, alleged that the power of attorney she signed appointing her son as decision-maker was invalid, because she was incompetent when she signed it. Mills sued for control of the money to pay for Etta’s care. After some litigation, Etta’s leukemia was determined to be fatal, which led to a settlement. Mills was granted conservatorship and permitted to control sums up to $350,000 to pay for Etta’s care for the last few months of her life.
  5. Peter Falk. The Lieutenant Columbo actor died at 83 in 2011, after living with Alzheimer’s disease for years. His wife Shera and his adopted daughter Catherine fought in court for conservatorship to make his decisions. Shera argued that she had power of attorney and could already legally make Peter’s decisions for him, which included banning daughter Catherine from visits. The judge granted Shera conservatorship, but ordered a visitation schedule for Catherine. However, a doctor, who testified at the hearing, said that Falk’s memory was so bad that he probably wouldn’t even remember the visits.
  6. Tom Benson. The billionaire owner of the New Orleans Saints and Pelicans was the subject of a lengthy and bitter court battle over control of his professional sports franchises, and hundreds of millions of dollars of other assets. Prior trusts, that he and his late wife established, left the sports franchises and other business interests to his daughter and two grandchildren. One of granddaughters operated the Saints as lead owner, until she was fired by her grandfather. Tom decided to take the controlling stock of the teams out of the trust and substitute other assets in their place, taking over control of the teams. However, his daughter and grandchildren fought the move. A 2015 court ruling declared Benson to be competent, despite allegations he suffered from Alzheimer’s disease. Benson then changed his will and trust and left everything to his third wife, Gayle. They all settled the dispute in 2017, leaving other assets to the daughter and grandchildren—but ultimately leaving Gayle in control of the Saints and Pelicans, after Benson’s death in 2018 at age 90.
  7. Glen Campbell. Campbell’s 2007 estate plan left out three of his adult children. They sued to challenge their disinheritance after he died. They dropped the case in 2018, without receiving a settlement. The fact that Campbell’s final will was drafted several years prior to his Alzheimer’s diagnosis was a critical factor in the outcome of the lawsuit.

The estate planning of these celebrities show the importance of proper estate planning, before it is too late. Wills and trusts that are created or changed after someone is diagnosed with Alzheimer’s disease, dementia, or similar conditions are more apt to be challenged in court.

Click here If you are interested in learning more about estate planning, elder law, or long-term care planning.

Reference: Forbes (November 25, 2019) “Top 7 Celebrity Estates Impacted By Alzheimer’s Disease”

Here’s Why You Need an Estate Plan in 2019

The New Year sees young adult clients calling estate planning attorney’s offices. They are ready to get their estate plans done because this year they are going to take care of their adult responsibilities. That’s from the article “Estate Planning Resolutions for 2019: How To Be A Grown-Up in The New Year” in Above The Law. It’s a good thing, especially for parents with small children. Here’s a look at what every adult should address in the New Year:

Last Will and Testament: Talk with a local attorney about distributing your assets and the guardianship of your young children. If you’re over age 18, you need a will. If you die without one, the laws in your state will determine what happens to your assets, and a judge, who has never met you or your children, will decide who gets custody. Having a last will and testament prevents a lot of problems, including costs, for those you love.

Power of Attorney. This is the document used to name a trusted person to make financial decisions if something should happen and you are unable to act on your own behalf. It could include the ability to handle your banking, file taxes and even buy and sell real estate.

Health Care Proxy. Having a health care agent named through this document gives another person the power to make decisions about your care. Make sure the person you name knows your wishes. Do you want to be kept alive at all costs, or do you want to be unplugged? Having these conversations is not pleasant, but important.

Life Insurance. Here’s when you know you’ve really become an adult. If you pass away, your family will have the proceeds to pay bills, including making mortgage payments. Make sure you have the correct insurance in place and make sure it’s enough.

Beneficiary Designations. Ask your employer for copies of your beneficiary designations for retirement accounts. If you have any other accounts with beneficiary designations, like investment accounts and life insurance policies, review the documents. Make sure a person and a secondary or successor person has been named. These designated people will receive the assets. Whatever you put in your will about these documents will not matter.

Long-Term Care and Disability Insurance. You may have these policies in place through your employer, but are they enough? Review the policies to make sure there’s enough coverage, and if there is not, consider purchasing private policies to supplement the employment benefits package.

Talk with your parents and grandparents about their estate plans. Almost everyone goes through this period of role reversal, when the child takes the lead and becomes the responsible party. Do they have an estate plan, and where are the documents located? If they have done no planning, including planning for Medicaid, now would be a good time.

Burial Plans. This may sound grim, but if you can let your loved ones know what you want in the way of a funeral, burial, memorial service, etc., you are eliminating considerable stress for them. You might want to purchase a small life insurance policy, just to pay for the cost of your burial. For your parents and grandparents, find out what their wishes are, and if they have made any plans or purchases.

Inventory Possessions. What do you own? That includes financial accounts, jewelry, artwork, real estate, retirement accounts and may include boats, collectible cars or other assets. If there are any questions about the title or ownership of your property, resolve to address it while you are living and not leave it behind for your heirs. If you’ve got any unfinished business, such as a pending divorce or lawsuit, this would be a good year to wrap it up.

The overall goal of these tasks is to take care of your personal business. Therefore, should something happen to you, your heirs are not left to clean up the mess. Talk with an estate planning attorney about having a will, power of attorney and health care proxy created. They can help with the other items as well.

Reference: Above The Law (Jan. 8, 2019) “Estate Planning Resolutions for 2019: How To Be A Grown-Up in The New Year”