What you need to know about conservatorships in Michigan
A question that few people would like to think about is what happens if a loved one becomes too old or mentally unable to manage his or her investments, taxes and other financial affairs. However, the answer is, for some, this issue often needs to be addressed through a conservatorship.
What is a conservatorship?
Put simply, a conservatorship is when the probate court appoints a person (called a conservator) to make decisions and act on behalf of another person. A conservatorship is slightly different than a guardianship in that it is primarily concerned with protecting a person’s finances, rather than looking after their personal well being.
Since conservatorships take away many of the legal rights of the vulnerable persons that are the subjects of them, there is an opportunity for financial abuse and self-dealing. As a result, all conservatorships are supervised by the probate court in Michigan.
How is one formed?
Under the law in Michigan, a conservatorship may be requested by the vulnerable parties themselves. Otherwise, an “interested person” (who is usually an heir, but does not have to be) can request that a conservatorship be formed in the following cases:
· The person being protected cannot manage their affairs because of a physical or mental illness, chronic use of drugs, disability, mental incompetency, or confinement; and
· Money is needed to finance the support, care or welfare of the person to be protected, requiring a conservatorship to do so; or
· The person to be protected owns property that would be wasted if it is not managed competently
Upon request by an eligible party, the probate court will hold a hearing giving all interested parties to right to give evidence supporting or opposing the formation of a conservatorship. If the court finds that sufficient evidence supports the appointment of a conservator, it will issue an order doing so.
What are the conservator’s duties?
The conservator’s main function is to provide competent management of the assets of the vulnerable adult. Additionally, the conservator is required to protect the adult from financial exploitation by creditors, salespersons or family members.
When carrying out their duties, conservators owe the protected adult a fiduciary duty. This means that they must always act in the best interests of the vulnerable adult’s estate. Since conservatorships’ terms continue indefinitely, they are also required to provide an accounting of the income and expenses of the estate to the court each year.
An attorney can give you options
Due to the formalities involved, conservatorships are often quite expensive to maintain. Fortunately, there are other options available to you if your goal is to protect a vulnerable adult against being taken advantage of. An experienced estate planning attorney can consider your circumstances, advise you of your options and recommend one that is the best fit.