Understanding Conservatorships

Written By: Mac Frasier

Director of Planning, Advisory Services


As shocking as this maybe I would not consider myself to be someone who is up to date with the latest happenings in pop culture.    However, for the past few months I would have to be living under a rock to have not heard about Britney Spears and her ongoing battles to have a conservatorship removed.    While Conservatorships are not something that I often find myself discussing, it has come up more than a few times in conversations recently.  I decided to write about this topic to help people better understand Conservatorships and why you want to avoid them.

What is a Conservatorship?

A Conservatorship is a legal term for a court proceeding in which a judge determines who should take over managing the financial matters of an adult that is deemed as incapacitated.  This is a drastic step for legal system to take but there are a variety of valid reasons that an individual may be placed into a Conservatorship including:

  • Alzheimer’s disease or dementia
  • Coma
  • Significant injury or illness
  • Mental Illness
  • The person already assisting with finances (perhaps as an agent under a power of attorney) is not acting in the best interest of the incapacitated person

The Conservator generally references the person(s) with the legal responsibilities to care for someone who’s mentally or physically incompetent in some form. This could include emotional or physical limitations, or any other reason a person would be unable to make major legal, financial or business-related decisions on his or her own. The conservator is responsible for managing and protecting assets, paying bills and reporting to the court regarding the finances of the ward. While Conservatorships are valid in every state but may be administered differently depending on the specific state laws.

What is unusual about Britney Spears case is her age as it is far more common to see a Conservatorship enacted for an elderly person.   A good example of this would be radio personality Casey Kasem. A case which saw his daughter fighting with her stepmom regarding visitation and the standard of care Casey was receiving. What these cases do have in common is the prolonged legal battles surrounding their Conservatorship. When it comes to having someone make decisions regarding your finances and care I believe we can all agree that we would rather make the decision than have a judge make it for us. That is why the next section is so important.

Avoiding a Conservatorship 

The good news is that there are steps that you can take now in order to prevent the courts from being forced to appoint a Conservator in the event of your incapacity.  The best thing you can do is create a Durable Power of Attorney. In this document you can grant powers to a person, allowing them to manage your financial affairs and other aspects of your life.   This option allows you to have input into who will oversee your finances versus having a judge make that decision in a conservatorship.   It is very important you create this document when you are of sound mind and that it be update periodically.  In a previous Thought Leadership piece: Account Management Options for Persons with Dementia or Diminished Capacity ,  I provide some additional details on the Durable Power of Attorney.   If you are concerned that you might become a caregiver for a friend or family member because of diminishing capacity I would encourage you to also read: Planning Checklist for persons recently diagnosed with Dementia.

Conservatorship vs Guardianship

When discussing Conservatorships, the topic of Guardianship often comes up as well. There are some distinct differences between Conservatorship and Guardianship. Both are court-appointed individuals who can make decisions on behalf of someone incapacitated. But for the most part, Conservators focus on financial management while Guardians handle more personal needs. Conservatorship also tend to pertain to an adult who is incapacitated, mentally disabled or otherwise incapable of making prudent financial decisions for themselves. Guardianships are often thought to be established for minor children but may also be for adults.  If you have minor children, it is important to have a Will that names guardians in case you were to pass away.  In the absence of a Will naming a Guardian the court will appoint one.

Conservatorships and Guardianship are often a chaotic, confusing and challenging time for everyone involved.  Not to mention expensive if legal challenges are raised.   However, it doesn’t need to be that way as long as you have a solid Estate Plan in place that addresses who you would like to have in charge of your affairs should the need arise.  A well thought out estate plan will be beneficial in avoiding the need for a court appointed Conservator and / or Guardian.

If you have additional questions, please feel free to reach out to me or your client advisors.

Oakworth Capital Bank does not provide tax or legal advice.   All decisions regarding the tax and / or legal implications of these strategies should be discussed with your tax and / or legal advisors before being implemented.