A conservator is a person assigned by a court to handle another person's finances. It's generally a good idea to avoid conservatorships because the court process of assigning a conservator can be expensive and uncomfortable. But in some circumstances, conservatorships can be useful or unavoidable.
Conservatorship proceedings can be complicated, expensive and even embarrassing. Your loved ones must ask the court to rule that you cannot take care of your own affairs—a public airing of a very private matter. Court proceedings are matters of public record; in some places, a notice may even be published in a local newspaper. If relatives fight over who is to be the conservator, the proceedings will surely become even more disagreeable, sometimes downright nasty. And all of this causes costs to mount up, especially if lawyers must be hired.
If a judge decides to appoint a conservator, there is no guarantee that the person who gets the job will be the person you would have chosen. A judge may ask you to express a preference for conservator—and will strongly consider what you say—but even this will not ensure that your choice will serve. To increase the chances that your wishes will be followed, you can use the durable power of attorney to name your attorney-in-fact as conservator, if a court must ever appoint one.
If you don't name a conservator in your power of attorney document, state law generally provides a priority list for who should be appointed. For example, a number of states make the person's spouse or registered domestic partner the first choice as conservator, followed by an adult child, parent and brother or sister. In many states, the law allows the court to appoint whomever it determines will act in your best interests.
The appointment of a conservator is usually just the beginning of court proceedings. Often the conservator must:
All of this, of course, costs money—your money.
A conservatorship isn't necessarily permanent, but it may be ended only by the court.
You can probably avoid the troubles of a conservatorship if you take the time to create a durable power of attorney for finances now. When you make a durable power of attorney, you give your attorney-in-fact full legal authority to handle your financial affairs. A conservatorship proceeding would be necessary only if no one were willing to serve as attorney-in-fact, if the attorney-in-fact wanted guidance from a court or a close relative thought the attorney-in-fact wasn't acting in your best interests.
An attorney-in-fact is not directly supervised by a court; that's the whole point of naming one. The attorney-in-fact is not required to file reports with any courts or government agencies.
But a court may become involved if someone close to you fears that the attorney-in-fact is acting dishonestly or not in your best interests. It's rare, but close relatives or friends may ask a court to order the attorney-in-fact to take certain actions. Or they may ask the court to terminate the power of attorney and appoint a conservator to look after your affairs. If a conservator is appointed for you, the attorney-in-fact will have to account to the conservator—or the conservator may revoke your durable power of attorney altogether. As mentioned above, you can use your durable power of attorney for finances to name your attorney-in-fact as your first choice for conservator.
Some states have statutes that set out specific procedures for such court actions. For example, a California statute authorizes any interested person, including relatives and friends of the principal, to ask a court to resolve questions relating to the durable power of attorney. Tennessee law provides that the next of kin can petition a court to require an attorney-in-fact to post a bond—something like an insurance policy, generally issued by a surety company.
Even if your state does not have a statute specifically authorizing court actions, someone interested in your welfare and upset with the attorney-in-fact could still go to court and ask for a conservator to be appointed.
It is possible, though highly unlikely, that a court proceeding could be brought to invalidate or overrule your durable power of attorney for finances. If your document is invalidated for any reason, a judge will appoint someone to manage your finances. This person is usually called a "guardian of your estate" or "conservator of your estate."
You can nominate your attorney-in-fact to serve as your financial guardian or conservator, if a court must appoint someone to that position. The court will follow your recommendation unless there is a compelling reason not to do so—for example, if someone has proved that your attorney-in-fact is mishandling your money. (Again, this type of outcome is very rare.)
If you do not nominate your attorney-in-fact to serve as the guardian or conservator of your estate, your power of attorney document will not mention the issue at all. In this case, the court would appoint a guardian or conservator by determining what would be in your best interests, but would do so without input from you.