When individuals cannot manage their finances, courts can appoint conservators. Financial conservatorship is for those who need help handling money.
What Financial Conservatorship Entails
Financial conservatorship gives the conservator the authority to oversee the protected person's finances and access money to pay bills. In many cases, the terms of the arrangement require the conservator to seek court approval before making some financial decisions on behalf of the ward, such as selling the ward's home.
When Do Courts Order Financial Conservatorship of an Adult?
Courts appoint financial conservators when people demonstrate that they cannot handle their finances on their own.
The legal standard for appointing a conservator in Michigan is the individual is unable to manage property or business affairs effectively for reasons such as mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power, or disappearance and either:
- has property that will be wasted or dissipated unless proper management is provided or
- needs money for the support, care, and welfare of the individual or those entitled to be supported by the individual and that protection is necessary to obtain or provide money.
Individuals who frequently forget to pay bills might need help with finances. For instance, a person might need help remembering to pay bills and handling money.
Those who are vulnerable to financial exploitation might also need conservators. For example, suppose a person makes significant payments to an online scammer. In that case, a loved one might petition the court to become the person's conservator to protect them.
Individuals with diseases and disabilities that prevent them from understanding money may also need the help of a trusted person. For instance, dementia can cause people to have executive functioning difficulties that impact their ability to handle money.
When a person has significant assets but needs help managing them, courts may order financial conservatorship.
Alternatives to Financial Conservatorship
While providing protection and support, conservatorship limits autonomy. Michigan law the court to consider whether there are less-intrusive alternatives than a conservatorship that will protect an individual's property and autonomy.
General Durable Power of Attorney
Conservatorship is appropriate when a person is impaired and cannot make their own decisions. Suppose an individual still can make decisions and understand the consequences of their choices. In that case, the person can execute a General Durable Power of Attorney for financial decision making. This gives a trusted individual, the Agent, the ability to handle assets in the event of incapacity without having to pursue a court conservatorship.
Compared to financial conservatorship, an economic power of attorney can protect individuals' rights while allowing someone to step in and help with monetary decisions. Under financial conservatorship, it is more difficult for the protected person to change the arrangement if disagreements with the conservator arise. The person subject to the arrangement must petition the court to terminate it.
Revoking a power of attorney is, by comparison, straightforward. As long as the individual who made a power of attorney retains capacity, they can withdraw their power of attorney at any time for any reason. They can also appoint a new agent without judicial oversight.
If you have questions about conservatorship or need help with a conservatorship, feel free to call my office or send me a message using the contact form on my website.
There are no comments for this post. Be the first and Add your Comment below.
Leave a Comment