Background

Definition. A conservatorship is used in California when a person is unable to handle their own financial affairs or take care of themselves physically, so the court appoints someone else to handle these matters.

Since 1981, a guardianship can only be obtained in California for a person under the age of 18. However, other states use the term “guardianship” for what California now calls a conservatorship.

Terminology. A guardianship must be established by a court. The person who needs the help is called the “guardian” and the person who is given the authority to manage the financial, medical, and/or other affairs of the person who needs the help is the “guardian.”

Types of Conservatories. There are two basic types of guardianships, a guardianship of the person and a guardianship of the estate. Often a conservator fills both roles, but it doesn’t have to be that way.

Curator of the Person. A guardian of the person ensures that the ward has adequate food, clothing, housing, medical care, social contact, and sources of enjoyment.

estate curator. A conservator of the estate manages the ward’s finances.

A conservator of the estate must use the ward’s money and other assets to support (and educate, if applicable) the ward and any dependents.

If the proper court order is obtained, the conservator can handle not only the conservatee’s personal finances, but also his or her business affairs.

The process

Start of the process. A guardianship is started by filing papers with the Probate Court and serving copies on the proposed ward and his or her close relatives.

Obviously, this can be a painful process for the conservatee, who is required to give up their rights to manage their finances, make their own medical decisions, etc. Still, sometimes a guardianship is unavoidable.

court investigator. A short investigator should talk to the proposed ward and others who may know something about the situation.

hearing. A hearing date is scheduled, and at the hearing the judge decides whether a conservator will be appointed and, if so, who it will be.

Unless the proposed conservatee is medically unable to attend, the proposed conservatee must be present at the hearing, as the judge will often want to question the proposed conservatee.

Please note that it is possible that another person, usually a family member, may object to the procedure or propose a different guardian.

Inventory and Appraisal. Within 90 days from the date the court signs the order appointing the conservator, the conservator must file a report with the court listing the assets owned by the ward.

More specifically, the conservator prepares an Inventory and Appraisal form. If there are assets other than cash, the conservator must send the Inventory and Appraisal to the probate arbitrator, who is appointed by the Court. The probate arbitrator will appraise the noncash items, complete the Inventory and Appraisal by inserting the value of those items, and return it to the conservator, who must present it to the Court. It usually takes four to six weeks for the probate arbitrator to return the form.

The estate is charged an appraisal fee, generally 1/10 of 1% of the total value of the conservatee’s estate, with a maximum fee of $10,000. The probate arbitrator can also recover expenses, such as mileage, in addition.

judicial investigations. Once guardianship is established, the court conducts regular investigations to confirm that guardianship is still needed and that the ward is being treated appropriately.

Bonds and Periodic Accounting. If the conservator is handling the ward’s finances (which is often the case), the conservator must post a bond and must periodically provide itemized accounts to the court listing all income and expenses.

bail amount. The bail amount depends on the ward’s assets and annual income, as well as whether a professional bail company (rather than family or friends) provides the bail.

Surety Companies. Please note that most bail bond companies will not issue a bond unless an attorney is handling the guardianship proceedings.

Ward Status Reports. The guardian is also often required to prepare periodic status reports indicating how the ward is doing and what the guardian is doing regarding her duties.

Cost. Generally, the cost of guardianship comes out of the conservatee’s income or other assets.

Fees and Refunds for the Conservator.

Expenses. Generally, the guardian is entitled to reimbursement for reasonable expenses incurred on behalf of the ward, including expenses to establish guardianship and, sometimes, money spent to support the ward prior to guardianship.

With the exception of court filing fees and bail bond premiums, the conservator must obtain court approval before receiving refunds from the conservatee’s estate.

It is essential that the conservator keep receipts and records of all expenses (and reimbursements).

The conservator may hire help as needed, such as an accountant, as long as the expense is reasonable compared to the size of the ward’s estate.

Generally, the guardian cannot be reimbursed for postage, photocopying, mileage, or the cost of travel to court.

Time Compensation.

It is crucial that a conservator who wishes to be compensated for his or her time maintains a detailed written record of the time spent in conservatorship, indicating the date, amount of time, and work performed entry by entry.

Courts generally allow a family member to recover only for time spent managing the finances of the estate, and not for time spent acting as a family member (such as visiting the conservatee) or acting as guardian of the person .

Courts may not allow compensation for time if little time has been spent on financial matters or if the guardian has not followed court procedures, including filing accounts on time.

Some courts have schedules setting out the compensation a guardian can receive for his or her time, often a percentage of the ward’s estate.

The curator can only apply to the Court for compensation for the time after the last of both:

90 days after letters of guardianship were issued; and when the Inventory and Appraisal is presented.

Alternatives

Powers of attorney. Unfortunately, the process of obtaining and maintaining a guardianship is expensive, so we strongly encourage people to sign powers of attorney designating who will handle their affairs if they become incapacitated. If the proposed conservatee is mentally competent, by far the best approach is to have him/her sign durable powers of attorney. There are two types of powers.

Durable Power of Attorney for Finance. One type of power of attorney is a durable power of attorney for finances, which designates which people can handle the grantor’s financial affairs (such as paying bills) if the grantor becomes incapacitated.

Advance Health Care Directive. The other type is the durable power of attorney for health care. In California, this is now known as an advance health care directive. This is designed to allow agents appointed by the grantor to make health care decisions if the grantor is incapacitated.

officers. Often the spouse (or partner) is the primary agent, and then adult children or friends are successor agents in case the primary (or subsequent) agent is unable (due to incapacity, etc.) or unwilling to Act.

medical decisions. Often, if a person is incapacitated, medical staff will allow family members to make medical decisions if they all agree. It is also possible to obtain court authorization for specific medical procedures, but if authorization is needed on an ongoing basis, a guardianship may be more effective.

Representative Beneficiaries. Most government agencies allow someone else (a “paid representative”) to receive checks for the payee and spend that money on the payee’s behalf. Each agency has its own application procedures and requirements. Many agencies require the paid representative to provide them with periodic bills.

community property. If one spouse becomes incapacitated, the other spouse can usually manage all of their joint property.

This will not help if action needs to be taken regarding any separate property owned by the disabled spouse.

Also, even with community property, the able-bodied spouse may not be able to roll over Treasury bills, sell stock, or sell or borrow against real property.

Again, it is possible for the court to authorize the spouse to enter into specific transactions, but it may be easier to obtain a guardianship if continuing authority is needed.

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