Conservatorship vs. Guardianship
“Conservatorship” and “guardianship” are similar enough in practice that one could be excused from using those terms interchangeably. However, they are not synonymous, and if you have a loved one who is not as sharp as they used to be in managing their assets, or whose physical condition or decision-making ability are declining, understanding the difference might be helpful.
In Arizona, a conservator and a guardian are two types of fiduciaries that are appointed by a court in response to the needs of a person whom the court has found to be partially or totally unable to manage themselves or some aspect of their life. Simply put:
- a
conservator
is responsible for the
finances and property of a “protected person”;
- a
guardian
is responsible for an “incapacitated person” in a broader sense, making decisions about the person’s
care, living arrangements,
etc.
As with most probate-related issues, the time and expense involved with getting appointed by a court vary significantly with the context of the situation. For instance, when a child with special needs turns 18, his or her parents will typically need to be appointed as guardians to preserve their parental authority past the age of majority. Such cases can usually be handled quickly and efficiently. But if an adult with significant assets suddenly becomes incapacitated, then a conservator will need to be appointed, and that invites numerous types of controversy, as interested parties can end up fighting over who has priority for appointment, how much is being spent, how the assets should be invested, etc.
Just as you can avoid sending your heirs to probate court after death by executing the proper combination of wills, trusts and beneficiary designations, you also can avoid the need for a guardianship or conservatorship with the proper combination of powers of attorney. It is almost always less expensive to avoid court involvement through estate planning than it is to roll the dice on a probate commissioner’s ruling when the unexpected happens.
Situations
As our society progresses through the largest intergenerational transfer of wealth in history, there is arguably more at stake financially than ever in managing the affairs of a vulnerable adult. While the positive side of estate planning remains a primary focus of our law firm, we are experiencing a growing demand for legal representation involving:
- adult children whose inheritance is threatened by financial mismanagement;
- disputes among siblings and interested parties; and
- contested guardianships and conservatorships.
We are also frequently asked to represent conservators and guardians (and, more commonly, personal representatives and successor trustees) who are alleged to have breached their fiduciary duties. Those duties include:
- acting at all times in the best interests of the vulnerable adult;
- keeping the vulnerable adult’s assets separate from the fiduciary’s assets;
- not using the vulnerable adult’s assets for the fiduciary’s benefit;
- investing the vulnerable adult’s assets in a conservative, low-risk manner; and
- keeping accurate records, filing tax returns and reporting to the court as required.
If you anticipate the need to protect the interests of a loved one who, due to age, illness, injury or dementia, is becoming increasingly vulnerable, or if you anticipate taking on a fiduciary role, please contact your
Hoopes Adams & Scharber attorney (480-345-8845) to discuss the situation.
