When a loved-one becomes unable to make sound decisions or manage their own affairs without help, it is time to look at the best way to provide that help. Both conservatorship and power of attorney are ways to do just that. But there are some very significant differences between the two which should be discussed with a California estate planning attorney before making a choice.
What is a Conservatorship?
A conservatorship is a legal relationship created through a formal court proceeding. The court must first determine whether the person in question has indeed become incompetent or incapacitated. If so, the court will appoint someone to serve as conservator. That conservator will be given the authority to make decisions for the benefit of the “ward.” Normally, a conservator is placed in control over the ward’s property, finances, and/or healthcare decisions, based on the need in that situation.
It is the conservator’s responsibility to protect the ward and his or her assets. However, there are some particular decisions that cannot be made without attaining written permission from the court first. For instance, withholding medical care or terminating parental rights are decisions that cannot be made without court approval. The conservator is also required to make an annual report to the court concerning the ward’s status and the status of his or her personal affairs.
What is a Power of Attorney?
A power of attorney is a legal document commonly used in estate planning. This instrument authorizes an “agent” or “attorney-in-fact” to enter into transactions on behalf of the “principal.” A power of attorney is commonly used to, pay bills, manage bank accounts, and make decisions regarding medical treatment. When a power of attorney is created, the authority can be conveyed immediately or only when a certain situation occurs. An important benefit of a power of attorney is that it does not require the principal to give up the right to manage his or her own affairs entirely. Instead, a power of attorney allows someone to act on your behalf whenever it becomes necessary, and to the extent specified in the written document.
How are a conservatorship and power of attorney different?
There are several differences between conservatorship and power of attorney. First, a conservatorship is a public proceeding conducted by the court. A power of attorney, on the other hand, is a more private proceeding. Second, a conservatorship results in continuous supervision of the conservator by the court; whereas the agent under a power of attorney does not have to report to the court in order to perform any duties. Third, a power of attorney is less expensive than a conservatorship, primarily because of the court supervision necessary with a conservatorship. A fourth difference between conservatorship and power of attorney is that, with a conservatorship, the ward may not have any control over who is chosen to serve as conservator. But, with a power of attorney, the choice of agent belongs to the principal.
A final difference, that can make a conservatorship more favored, is that some third-parties are often hesitant, or even refuse, to abide by the terms of power of attorney. This is because third-parties are often afraid of fraudulent use by agents. In contrast, a conservator is rarely questioned by third-parties, since the relationship is created and supervised by the courts. The differences between conservatorship and power of attorney can be significant, depending on your particular needs.
If you have questions regarding conservatorship and power of attorney, or any other estate planning needs in Los Angeles, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.