Harville-Stein Law Offices, LLC


FOLEY, AL 36535
Phone: 251.979.6641




I am a Conservator, Now What?

By Dean D. Stein, CMA

Being appointed another person's Conservator is to be placed in a position of great responsibility. All Conservator's must adhere to a standard of conduct that is codified in the law. Specifically, the Conservator “ shall observe the standards in dealing with the estate of the protected person that would be observed by a prudent person dealing with the property of another” and “if the Conservator has special skills or is appointed conservator on the basis of representations of special skills or expertise, the Conservator is under a duty to use those skills.” This is often referred to as the “Prudent Person” standard. What does this mean generally? That you must use great care in dealing with the property as Conservator of someone else's property. You must protect it, insure it if possible, deal with it promptly, account for it, save receipts, pay reasonable amounts for repairs, services, products and the like. You must deal with the protected person's affairs as you would your own, only in most cases, more carefully.

One of the major aspects that lay Conservator's overlook or underestimate is the accounting for your acts. The law provides that “each Conservator shall account to the court for Administration of the Conservatorship, upon resignation or removal and at other times as the court may direct, but if not otherwise directed, the conservator must, at least once in three years, account to the court.” Now, this idea of “accounting” to the court, has been mentioned a couple of times, what does that exactly mean? It means, that, at least once every three years, as Conservator, you must file a detailed accounting with the court, that the court will review, and either approve, or disallow your financial acts on behalf of the protected person. You might now be asking, what does “disallow” my acts as Conservator mean? It means, if the court finds you should not have spent the protected person's money on something, the court can charge, or hold you responsible for, or make you repay to the protected person, that amount. This is why understanding the “accounting” requirement at the beginning is so important. To emphasize this, attorneys should advise their clients on the form that this accounting must take. You will, in your accounting, have to show the balance of all funds that existed on the day you became Conservator, and then show all additions to those funds, that is, deposits, show all subtractions from those funds, that is, expenses, and after you do all that adding and subtracting, the amount left over must equal the cash the protected person has on hand! Sounds simple enough. You would be amazed at how many people have problems with it. Think of it. For a three year period, every dime of interest, social security check, pension, refund, dividend and any other form of income or receipt, must be shown, line by line. Then, every purchase of socks, food, personal hygiene supplies, spending allowance, car payment, rent, doctor bill, magazine subscription and on and on, must be shown for the three year period. And, when you total it all up, and subtract all the expense, again, it must equal your cash on hand. If you don't properly do all these things, you might wind up with personal responsibility. And, if you think that “bond” is going to help you, you may want to read “To Bond or Not to Bond” to get a better understanding of how that works.

Lastly, consider that as Conservator, with your letters in hand, you can do many tasks and conduct much business without further court approval, subject to the review at the accounting we have discussed above. But you can't do everything. Consider the sale of real estate or real property; you cannot sell any real estate without further approval of the court, usually after hearing and with a court order.

Sounds like a lot, it is. But, you would have not stepped forward if you were not up for the responsibility. If you are careful to keep all receipts, and keep a running accounting as you go along, you should be fine. Your attorney should not just help you become Conservator, but should remain with you every step of the way, to make sure the process is done properly, for your benefit, and the protected person's.

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Dean Stein, CMA, is an attorney who has a Masters degree in business and is a Certified Management Accountant (CMA).

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