Stop! Don’t Get Caught Without the Right Legal Paperwork for Mom’s Finances

Dear Mr. Miller:

My Mom had a serious stroke last year and I’ve been handling her financial affairs ever since.   I’m my Mom’s conservator.  I told the bank that when I was attempting to open a new account and they asked me for the paperwork to prove I am the conservator.

What paperwork?  They said something about court that I didn’t understand–I don’t want to go to court!  What are they talking about?

Helping Daughter

Who’s Who in Estate Planning? Executor, Trustee, and Attorney-in-Fact Decoded
What Is A Conservator
The Necessity of Letters
Living Probate: The Court Process That Costs Money Until the Very End
Don’t Want a Conservatorship? The Documents That Can Save You Time and Money
Don’t Give Up! When a Loved One May Still Be Competent Enough to Sign
Call Us

Dear Helping:

Who’s Who in Estate Planning? Executor, Trustee, and Attorney-in-Fact Decoded:  You are in good company as this subject confuses a lot of people.  First, let’s talk about various similar terms that float around and what they mean.  Executor is someone who is named in the Will to wind up the affairs of someone who died.  Trustee is a person who is named in the Living Trust to handle a person’s financial affairs; this can be after they die, after they lose mental competence, or maybe just for convenience.  Attorney-in-Fact (also referred to as the agent, power of attorney holder) is a person named in the Power of Attorney to handle a person’s financial affairs; if a trustee also exists then the trustee handles assets that are titled in the trust and the Attorney-in-fact handles those that are not.  There can also be an Attorney-in-Fact for health care named in a Health Care Power of Attorney (Medical Proxy, Health Care Directive).  The Executor is the only one of these people that is appointed by a court.  I usually just call them all managers to keep it simple.

What Is A Conservator:  So then what is a Conservator.  As with an Executor, this person is appointed by the court.  In some other states, this position is called a guardian. There can be a conservator of the person (one who makes medical decisions, residency decisions, and the like) and of the estate (one whom makes financial decisions and handles the assets).  There is paperwork issued by the court appointing the person to the conservatorship position.  The document is called “Letters of Conservatorship.”  A certified copy (one with the court seal to prove that it is an official copy of the original which remains in the court file) will be required by the bank.  Basically, a conservatorship is to protect a person (called the conservatee) who cannot care for his own person or property.  Often times it is a family member who requests the court to be appointed.

The Necessity of Letters:  I have had clients who said they were the conservator but had no paperwork.  In other words, they were just using the term loosely to describe what they were doing for their family member.  So unless you have paperwork from the court (Letters), you are not a conservator, at least not in the legal sense.

Living Probate: The Court Process That Costs Money Until the Very End:  Conservatorships can be expensive and time consuming.  Given that it is a court process that continues until the conservatee no longer needs it or dies, it is often called a “Living Probate.”  There are often bonds that have to be obtained (and paid for), extensive financial reports that must be prepared and filed with the court periodically, court hearings, court filing fees, and, of course, fees for the attorney to advise and guide you through the court proceeding at the beginning and periodically thereafter.  This can cost significant amounts of money depending on how long and complicated the conservatorship lasts.

Don’t Want a Conservatorship? The Documents That Can Save You Time and Money: Fortunately, there are alternatives to conservatorships.  Maybe as simple as attorney-in-fact titling for bank accounts (done through the bank) in smaller estates to Living Trusts and Powers of Attorney for larger ones.  All of which should be easier and less expensive than a conservatorship.  In your Mom’s case, is there a Health Care Power of Attorney as that, in most cases, alleviates the necessity of a conservatorship of the person?  Is there a Power of Attorney for Assets (i.e. Financial) or a Living Trust as that often allows us to work around a conservatorhsip of the estate?

Don’t Give Up! When a Loved One May Still Be Competent Enough to Sign:  Be aware, if your Mom is no longer legally competent, it is too late to have her sign any of these documents—that must be done while she still knows what she is doing.  That being said, many families have told me their loved one is incompetent.  Fortunately, I learned long ago that one must delve into this question deeper as often times, from a legal standpoint, that was not true and we were able to forge forward in solving the problems without going to court.

Call Us:  As always, give us a call at 760-436-8832 so we can assist you in determining what the best course of action is for your Mom.