Conservatorships have made headlines in recent years involving celebrities like Britney Spears. Still, it's essential to know how guardianship or conservatorship could impact your loved ones, including their future care and estate planning.
In a conservatorship, a court-appointed person is placed in charge of managing both the financial and personal affairs of a minor or an adult with limited capacity. The person appointed by the court is known as the conservatee or trustee (depending on what state you live in). It typically grants someone authority to pay bills, make investments, or take care of other financial matters.
There are numerous cases where a court appoints a conservatorship. In addition to minors, the court may find an individual is limited due to physical or intellectual disabilities, ranging from mental health issues, such as someone who is suicidal, to an adult who has dementia. It applies to anyone unable to make their own decisions regarding legal, financial, or medical matters due to their limited capacity.
Mental capacity must be verified in order for a conservatorship to be granted. There must be extensive documentation, and an official diagnosis before the court considers it. And if a conservatorship is granted to someone, it's a commitment that lasts a lifetime, and there must be regular reports to the judge during the duration of care.
A guardianship generally refers to someone in charge of the physical care and medical decisions of someone limited in their capacities. A guardianship is also assigned when parents cannot care for minor children. The same person can serve as both guardian and conservator for either an adult or a minor.
Like a conservatorship, guardianship is appointed by the court and requires legal action to be approved. Guardianship can be granted for various reasons, such as the extended illness of the parents, incarceration, or mental illness. It may also be established for children whose parents pass away and leave the children assets, such as money from a life insurance policy or cash accounts.
Depending on the state in which you live, there are different levels of guardianship. Some guardianships only involve healthcare and personal decisions for an individual, whereas other levels may grant more involvement with financial matters. Since each state has its laws regarding guardianship, the best course of action is to work with an attorney familiar with the local laws and your state's guardianship definition.
There may be a time when you choose a guardian for a child for a temporary period. In this case, a temporary guardianship can be established. It's often used if parents need to travel out of the country for an extended period or if a parent is incapacitated for a short while, such as for a medical procedure. A temporary guardianship allows a minor to live with another person for a temporary period and take care of the child's day-to-day needs.
In the case of temporary guardianship, it allows the temporary guardian to make medical, financial, and educational decisions on behalf of the child or whatever else the child may need. Each state has a different legal definition of temporary guardianship. If you need to establish a short-term situation, you'll need to fill out specific forms and have them notarized.
A conservatorship vs. guardianship question should be answered by considering your state laws. The best approach to this is working with an estate planning attorney familiar with the legal aspect. In general, guardianship involves day-to-day care, including personal and medical decisions, whereas a conservatorship is more financially focused.
Establishing a conservatorship is costly and time-consuming. It can take months for the entire process to be completed, and the associated legal fees can be quite expensive. However, once the conservatorship is in place, it's a highly structured plan for ensuring the individual can get the assistance they need and their financial matters are taken care of.
When a loved one can't make day-to-day personal decisions and healthcare and financial choices on their own, it can become a very delicate matter for relatives to handle. As such, many people include conservatorships, guardianships, and power of attorney as part of their estate planning to help avoid the complications from court involvement. This is another reason why understanding the difference between the two is critical.
As you plan for your future, it's an ideal time to discuss conservatorship and guardianship needs. Additionally, think of life insurance as another component of your comprehensive estate planning. You can explore life insurance basics at Ethos and get your online quote today.
The information and content provided herein is for informational purposes only, and it is not to be considered legal, tax, investment, or financial advice, recommendation, or endorsement. You should consult with an attorney or other professional to determine what may be best for your individual needs.