Conservatorship Basics: Part II

/ November 4, 2014

Calculator - iStockLast week, in Conservatorship Basics Part I, I discussed what a conservatorship is, who can be a conservator and the process for getting a conservatorship in place. In today’s post, I will cover a conservator’s duties and powers and when and how a conservatorship is terminated.

Conservator’s Duties

Once a conservator is in place, a conservator has the following duties and powers:

  • the duty to pay the reasonable charges for the support, maintenance, and education of the protected person in a manner suitable to the protected person’s station in life and the value of the estate;
  • the duty to pay out of the protected person’s estate all lawful debts of the protected person and the reasonable charges incurred for the support, maintenance, and education of the protected person’s spouse and dependent children and, upon order of the court, pay such sum as the court may fix as reasonable for the support of any person unable to earn a livelihood who is legally entitled to support from the protected person;
  • the duty to possess and manage the estate, collect all debts and claims in favor of the protected person;
  • where a protected person has inherited an undivided interest in real estate, the court, on a showing that it is for the best interest of the protected person, may authorize an exchange or sale of the protected person’s interest or a purchase by the protected person of any interest other heirs may have in the real estate;
  • the power to approve or withhold approval of any contract, except for necessities, which the protected person may make or wish to make; and
  • the power to apply on behalf of the protected person for any assistance, services, or benefits available to the protected person through any unit of government.

Furthermore, the conservator may do a variety of items associated with the protected person’s estate (with court approval), including:

  • make gifts;
  • convey, release, or disclaim contingent and expectant interests in property, including marital property rights and any right of survivorship incident to joint tenancy or tenancy by the entireties;
  • exercise or release a power of appointment;
  • create a revocable or irrevocable trust of property of the estate, whether or not the trust extends beyond the duration of the conservatorship, or to revoke or amend a trust revocable by the protected person;
  • subject to the terms of the plan document, contract, or agreement, exercise rights to elect options and change beneficiaries under insurance policies and annuities or surrender the policies and annuities for their cash value, and any change pursuant to this clause, shall invalidate the existing elections and beneficiary designations;
  • exercise any right to exempt property and an elective share in the estate of the protected person’s deceased spouse and to renounce or disclaim any interest by testate or intestate succession or by transfer inter vivos;
  • subject to the terms of the plan document, contract, or agreement, exercise rights to elect options and change beneficiaries under any qualified or nonqualified retirement plan;
  • exercise the power to create, terminate, or alter the beneficial interests and beneficiaries of, a payable on death (POD) account, a transfer on death (TOD) security registration or account, or joint tenancy interests with rights of survivorship; and
  • make, amend, or revoke the protected person’s will.

Termination of a Conservatorship

The appointment of a conservator terminates upon the death, resignation, or removal of the conservator or upon termination of the conservatorship. A conservatorship terminates when the protected person dies or regains capacity.

A resignation of a conservator is effective only when approved by the court. Termination of the appointment of a conservator does not affect the liability of either for previous acts or the obligation to account for money and other assets of the protected person. A protected person or interested person may petition for removal of a conservator on the ground that removal would be in the best interest of the protected person or for other good cause.

If you have specific questions about a conservatorship for yourself or a loved one, be sure to contact an attorney in your area.

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