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Is Conservatorship the Same as Power of Attorney?

Some situations call for decisions to be made on behalf of other individuals, for instance, because of the person’s incapacitation or unavailability. In other cases, individuals lose the ability to make their own decisions, as might happen with an aging relative. Whenever this occurs, legal tools such as a power of attorney and conservatorship are explored. Through a power of attorney, a person freely transfers control to a third party. They set its limits and give it willingly, but they also have the right to revoke it whenever they desire.

On the other hand, conservators aren’t appointed by individuals. Rather, they’re installed by the court after a hearing. That means it is an involuntary arrangement that can only be terminated after a formal hearing. Here is a look at the concepts.

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Is Conservatorship the Same as Power of Attorney?

What Is a Power of Attorney (POA)?

A POA is a document that, when signed by two parties (a “donor” and an “attorney”), grants the latter the legal right to act on behalf of the former. A POA is often used in estate planning to put a trustworthy person in charge of one’s medical and/or financial decisions in their absence or incapability. The attorney’s decisions on their behalf are legally enforceable or protected.

It’s a voluntary arrangement

A POA is a voluntary arrangement. It’s given willingly and can be revoked at any time as long as the donor is legally competent. There is no formal procedure required to assign a POA. You often only need to sign a paper outlining the boundaries of the arrangement and have it notarized to make it legally binding. However, if you are unable to make enforceable decisions, you cannot grant a power of attorney.

For instance, someone who is taking a lot of medication may not be able to comprehend what they are doing. Any POA assigned under such circumstances or by deceptive means could be declared void by a court.

It grants the attorney the same access and authority as the donor

The attorney has the same authority and access you’d have if you were there.

It can be enduring or springing

An enduring POA starts right after it’s signed and lasts through incapacity unless revoked. In contrast, a springing POA becomes active when the donor becomes incapacitated (or any other established “trigger”) and stops when the donor passes away or becomes capable.

It can be general or limited

With a POA, you have lots of control over the decisions the attorney makes on your behalf. Thus, you can either give them extensive authority or restrict them to a few key areas. That means a power of attorney can be general or limited to specific areas.

A general POA gives someone the freedom to act on your behalf in almost any situation. They have the authority to make financial decisions, sign documents on your behalf, and generally serve as your proxy. Because of this, generic powers of attorney are not very common. Most people will instead designate specific powers of attorney.

A specific POA allows someone to act on your behalf in a particular situation, for a specific problem, a set period, or under any other circumstances you may specify. For instance:

● You could appoint someone as your agent to negotiate a particular contract on your behalf. Doing so indicates that while they can bind you to an agreement for that negotiation, they are not authorized to access your finances.

● You could also give someone a POA for when you are away and unreachable. However, the appointment will automatically expire on the day you return.

● You could grant someone a durable POA for finance as well. Doing so will give them the authority to manage your finances in the event of your incapacity. That may include managing your business affairs, selling properties, pursuing claims or proceedings on your behalf, and moving assets into trusts.

● You could also grant someone a medical POA, allowing them to decide your medical care should you become incapacitated or unconscious.

While someone with a POA cannot override or challenge your own judgments, they are free to alter them as they see fit. Therefore, it’s unwise to assign a POA when you can make those decisions on your own. It might result in an unclear situation. 

It is revokable

An attorney’s abuse of a POA can be halted by terminating the POA. Remember that this is only allowed if the donor still possesses mental capacity. Otherwise, you cannot take back a POA as you are unable to make any legally binding decisions. However, in reality, courts are often less rigorous about the circumstances under which one can take back a POA.

What Is a Conservatorship?

A conservatorship is an involuntary arrangement usually made by the court. It often involves the assignment of certain legal powers. The individual assigned legal powers is known as a conservator and is in charge of a ward (the person whose legal powers are being taken away). This action allows the conservator to make legally binding decisions on the ward’s behalf. A conservatorship is usually more extensive than a POA in that the conservator can make financial, medical, and personal decisions for their ward.

How Do People End Up in Conservatorship?

A conservator is usually appointed following a court hearing on a petition filed by a person, their relatives, or friends. The judge will first determine mental incompetence. That means they will assess the individual in person to see that their ineptitude puts them or others in danger. Consequently, “incompetence” means that the person is unable to comprehend the quality and nature of their actions.

Why Are People Put Under a Conservatorship?

When the court establishes that the subject of a petition no longer has the mental competence to make their own decisions, it will appoint a conservator. Physical incapacity is rarely, if ever, grounds for conservatorship.

There are several distinct types of mental disability, but some of the most prevalent include:

● A coma or complete incapacity: The person is physically unable to react, decide, or communicate a decision.

● Alzheimer’s, dementia, and other mental illnesses: In this scenario, even if the person can express their intentions properly, they are regarded as mentally incapacitated.

● The person has a hereditary or permanent mental handicap that prohibits them from ever becoming an adult or becoming independent.

Types of Conservatorships

● Financial: All of the ward’s financial affairs are under the conservator’s control. That means the ward can only access their property, money, or investments with the conservator’s approval.

● Physical: The ward’s health and way of life are under the conservator’s control. The conservator controls the ward’s living arrangements, medical care, and whether they require admission to a facility of any kind.

● General: The conservator is assigned control over the ward’s finances, physical health, and medical decisions.

● Limited: Some areas of the ward’s life are under the conservator’s control. That is frequently allowed when an adult with a mental impairment needs to continue receiving care from a guardian despite having the most autonomy possible. The conservatorship may be limited to the ward’s unique requirements.

Conservatorships can also be classified by duration as:

● Short-term: These usually last 90 days and are only issued to address immediate and specific needs following someone’s unexpected incapacitation. Short-term conservatorships are typically the only ones permitted without an official hearing.

● Temporary: These only apply under certain circumstances or for a set period, for example, when a person falls into a medical coma until they awaken.

● Permanent: If nothing changes, this conservatorship shall continue for the remainder of the person’s life. The ward has the right to ask for its cancellation, but doing so would require them to argue their situation in court and win.

What Are a Conservator’s Duties?

Conservators make decisions on their ward’s behalf. Given that they are fiduciary, they are required by law to act in the ward’s best interest at all times. This can be enforced by the court using its own power. Additionally, if family members or other relevant individuals have a reason to believe that the conservator’s actions are selfish, they may bring a personal injury lawsuit against them.

A ward cannot overturn a conservator’s choices, unlike with a POA. Typically, following the appointment of a conservator, the ward loses all power to decide anything.

The ward cannot revoke a conservatorship. Only a court order can do so. Thus, the ward needs to submit a formal legal protest and attend a hearing. They’ll be required to demonstrate that their situation has changed and that they are competent again. Without such proof, the conservatorship continues indefinitely. When POAs and conservatorships conflict, the latter usually takes precedence and can override the former.

The Bottom Line

Everyone occasionally needs assistance making wise decisions, which is especially true in the complicated area of finance. It is best to enlist the professional assistance of a financial advisor when making plans for a loved one whose capacities may be diminished. A competent financial advisor will assist you in making the best financial, health, and other decisions. Get in touch with us to help put your estate affairs in order for your loved ones. We’ll be happy to provide guidance.

 

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Hess-Verdon & Associates, PLC
620 Newport Center Drive Suite 1400
Newport Beach, California, 92660
Office: (949) 706-7300 
Toll Free: (888) 318-4430

Copyright © 2022 Hess-Verdon, PLC. All rights reserved. The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship. The verdicts and settlements listed on this site are intended to be representative of cases handled by Hess-Verdon & Associates, PLC. These listings are not a guarantee or prediction of the outcome of any other claims. The information contained on this website is not tax or legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law. For current tax or legal advice, please consult with an accountant or an attorney.

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Hess-Verdon & Associates, PLC
620 Newport Center Drive Suite 1400
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Copyright © 2022 Hess-Verdon, PLC. All rights reserved. The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship. The verdicts and settlements listed on this site are intended to be representative of cases handled by Hess-Verdon & Associates, PLC. These listings are not a guarantee or prediction of the outcome of any other claims. The information contained on this website is not tax or legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law. For current tax or legal advice, please consult with an accountant or an attorney.

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