Conservatorship

Conservatorship for adults and minors are a matter for the Probate Court.

When a person cannot manage his/her own affairs due to legal incapacity, such as a physical or mental illness or minority, a conservatorship may be established. In a conservatorship, a person is appointed by the court to manage the financial affairs of another person.

A person under the age of 18 in Michigan may need to have a conservatorship established if they have money or property which needs to be managed by an adult. A custodial parent, a guardian, or a financial institution may receive up to $5,000 annually on behalf of a minor without the establishment of a conservatorship. Any minor who is to receive $5,000 or more per year would need a conservator.

Alternatives to Conservatorship

Whether a proceeding in the probate court (a conservatorship) is required depends on the extent and nature of the person’s financial interests and whether the individual has taken steps to allow someone they trust to act on their behalf.

There are other legally recognized ways to handle the protected individual’s affairs. One way to avoid a conservatorship is a durable power of attorney which was executed by the person prior to incapacity. A durable power of attorney is a legal document that names one or more individuals or a bank as attorney(s) in fact to act as agent(s) on behalf of the person who signed it regarding the matters specified in the durable power of attorney. There are different types of durable powers of attorney. For example, the durable power of attorney may be effective upon the signing of the instrument, or it may be effective only upon a stated occurrence, such as incapacity. In either case, when the person becomes unable to handle his or her own affairs, the attorney in fact may do those things specified in the document with the same effect as if they were done by the now incapacitated person. A properly executed durable power of attorney is recognized and accepted as a valid way to carry out the financial affairs of the incapacitated person.

Another way to avoid a conservatorship is to set up a trust. A trust may be set up by the person for his or her own benefit (often called a revocable trust) or by third parties (by gifts made during their lifetime or upon death to an irrevocable trust). The individual’s assets are owned by the trust and managed by a trustee for the benefit of the person to be protected.

An additional alternative is the use of joint bank accounts. The other party to a joint bank account (to which social security and other payments may be directly deposited) can use the funds for the protected co-owner without court action. With either a durable power of attorney or a joint bank account, the person gaining control of the protected individual’s assets must be someone that can be trusted. There is no oversight of this individual’s activities.

Certain government benefits (such as Social Security) may be paid to a third party (a representative payee) who is under an obligation to make sure that the money is used for the benefit of the person in whose name they are paid. The representative payee is a federal fiduciary and is not required to be appointed by the probate court. If these benefits are the sole source of income for the protected person, the designation of such a representative payee may provide a means of managing the person’s affairs without court involvement.

A conservatorship is often for an indefinite period of time and involves the management of various assets for the protected individual. However, a full conservatorship is not always necessary. When only a single transaction requires attention, the probate court may enter a protective order. Before a protective order is entered, the court will conduct the same hearing and make the same findings that are required for a full conservatorship. A protective order may be used to transfer the protected person’s property to a privately managed protective trust.

If no alternative is available, a petition for the appointment of a conservator may be filed with the probate court.

Legal Service

While individuals can file Petitions on their own without the assistance of an attorney, the services of an attorney can often be needed.  These Petitions often concern family and are emotionally difficult for the Petitioner.  There are often disagreements within the family as to whether the individual requires a Conservator, or who the appropriate individual is within the family to serve in that capacity.

As an attorney that is experienced in this are of law, I can assist a family in the preparation of the Petition and other documents to assure that the family “gets it right” the first time.  This can relieve the emotional burden and provide clarity for the family in these unfamiliar waters.

I can also provide guidance and assistance as to the alternatives available, thereby eliminating the need to go to court and preserving the individual’s dignity, while still providing the necessary safeguard to assure that the individual is protected.

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Address

Linda E Wasielewski
attorney & mediator
3199 Logan Valley Road
Traverse City, MI 49684
Phone: (231) 933-0829
Email: linda@lindalawtc.com

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