What is a Guardian? A Conservator? What are the Alternatives for Adults?

When adults fail to plan for how they or their property should be managed in the event that they lose their mental capacity, they may find themselves under the care of a guardian and/or conservator appointed by a Minnesota court. Guardians and conservators cost money, and they are under court supervision.

In Minnesota, guardians are appointed to make decisions about the incapacitated person’s “person” whereas conservators are appointed to make decisions about that person’s “property”.

All adults are presumed to be competent until a court determines otherwise. However, once a court determines that a person in incapacitated, the adult no longer has autonomy.

In Minnesota, an incapacitated person is defined as an adult who lacks sufficient understanding or capacity to make responsible decisions, and is unable to tend to personal needs such as medical care, nutrition, shelter, clothing or safety. The key is whether the person has the capacity to make responsible decisions and not whether the decisions are, in fact, responsible.

Conservatorships and guardianships may be avoided with proper planning. For example:

Trust: One way to avoid a conservatorship is to set up a Revocable Living Trust. A Revocable Living Trust enables your hand-picked trustee to handle your affairs without court involvement. You can amend your own Revocable Living Trust and change trustees as long as you have mental capacity. Once incapacity occurs, the Revocable Living Trust becomes irrevocable.

Durable Power of Attorney: A Durable Power of Attorney is another alternative to a conservatorship. A “Durable” Power of Attorney continues in effect after you’re incapacitated. In it you’ve named someone as an attorney-in-fact and granted that person certain powers over your financial affairs. Also, if so authorized by the Power of Attorney document, the attorney-in-fact could transfer assets into your Trust that you had not yet placed in the Trust but that now should be in the Trust for tax, administration or other reasons. Of course, there is no court supervising the actions of an attorney-in-fact, which could increase the potential for financial abuse by the attorney-in-fact.

Other: Bills could be handled through automated bill payments. A “representative payee” could be designated to receive your Social Security benefits and use the money to make purchases for you.  Joint bank accounts enable the joint account holder to handle financial matters for you. The danger with joint bank accounts, however, is that the joint account holder is also an owner of your money and his or her creditors could try to take money held in the joint account.

A Revocable Living Trust is more expensive that the other alternatives to conservatorship, but there are certain advantages that a Revocable Living Trust has over the others.  For example, the Revocable LivingTrust document provides more detailed instructions than does the typical Power of Attorney document, which may provide more control over one’s money if incapacity occurs.

For a guardianship of an adult, the appointment of a health care agent in a Health Care Directive is considered a nomination of a guardian for purposes of Minnesota’s Uniform Guardianship and Protective Proceedings Act.  Your hand-picked agent will be accepted by the court unless the court determines that the appointment is not in your best interests.

Costs of a conservatorship and/or guardianship include court costs, attorney fees and payments to the guardian and/or conservator for their labor. There’s the cost to set up the conservatorship, the ongoing cost of preparing reports for the court, and the cost of complying with the court’s decisions. The costs are paid by the person receiving the services. The process can also be time consuming given that a conservator must make reports to the court and must seek court approval before selling real estate and borrowing money.

The guardian and conservator can be the same person. Relatives, friends, professional guardians, professional conservators, certain service agencies or anyone appointed by the court may serve as a guardian or conservator. Conservators are typically easier to find than guardians because conservator duties are often less time-consuming.

There may be times when it is better to have the court’s involvement. For example, if the family of the incapacitated person is at odds with one another or lives far away, guardianship and/or conservatorship may be the best route to take.

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