Using a Conservatorship to Protect AssetsA conservatorship is the legal process through which authority over an individual’s (called the “conservatee” or “ward”) financial and personal affairs is transferred to a court-ordered “conservator”. A conservatorship is sometimes necessary when an adult is unable to care for themselves and especially in cases where the person has not executed a durable power of attorney. Even if a power of attorney is in place, the agent (the person authorized to act on the other’s behalf) can only be authorized to do certain things. An agent cannot prevent an adult from contracting, conveying property, or marrying. A conservator can intercede in these transactions; for example, the conservator could ask the court to set aside a contract entered into by the conservatee if that person lacked capacity at the time the contract was signed.

The main goal of the conservatorship is to protect the assets of the disabled person. The conservator can help protect the disabled person from fraud and otherwise safeguard their assets and maintain their privacy. A good example is a person with Alzheimer’s disease. In this case, the person would be vulnerable to fraud or manipulation, and it would be a huge benefit to have a conservator looking out for their interests.  That said, a conservatorship is a last resort because it involves a probate court process and can be time-consuming, expensive and emotionally draining.  Your first option should be a comprehensive durable power of attorney and, if necessary, a “family meeting” to make sure the whole family is moving toward the same goal, which is the making sure the disabled person is protected and receives the best care possible.

There are three elements to a conservatorship:

  • It shifts the responsibility of making financial decisions from the disabled person to the conservator
  • It imposes limitations on the ability of the conservatee to make financial
  • It gives the conservatee some protection against fraud, misappropriation of funds, and neglect

Keep in mind that the court will only grant a conservatorship if you can’t take care of yourself and have made no arrangements for your care. If you have provided for your own care, the court will not usually alter your arrangements. Ultimately, the best course is to prepare a thorough estate plan with an estate planning lawyer and avoid a conservatorship altogether.

Glenn Matecun has the experience and expertise to assist you in all matters pertaining to estate planning. Check out our Facebook page or give us a call at our Howell office (517) 548-7400, or our Clinton Township office (586) 751-0779.

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