Alternatives to Conservatorships

In a previous article, we presented an overview of two different types of conservatorships that exist in California. This current article explores possible alternatives to avoid the need to establish a conservatorship.

If an elder is mentally incompetent and unable to handle their own financial affairs, then someone else must be granted the authority to perform this task. If no power of attorney for financial matters exists then the court, in a conservatorship proceeding, will appoint someone to have this authority. Such a conservatorship over the estate is a long and sometimes costly process.

A power of attorney for financial management can avoid the need to establish a conservatorship over an elder’s estate. If the elder has sufficient mental capacity to execute such a document, then their appointed agent will have the needed authority without having to ask the court for permission.

Such powers of attorney have been referred to as a “license to steal” and must only be utilized to protect the elder’s financial well-being.

Similarly, a valid power of attorney for health care decision making (known in California as an Advance Health Care Directive) can be a viable alternative to having to establish a conservatorship over the person. When an elder becomes incapacitated and unable to make sound medical decisions, then this power of attorney grants the agent the legal authority to do so. Again, no court intervention is required.

A revocable trust is also part of the available alternatives to a conservatorship. The elder’s assets that are owned by the trust can be managed by a successor trustee – a person appointed by the elder to prudently manage trust assets if the elder becomes mentally or physically incapacitated.

If these documents were properly prepared well in advance of the elder’s incapacity, then they should serve to avoid the need for court intervention. However, problems arise when loved ones attempt to have the elder execute such documents when their mental faculties are in question.

In Riverside and other counties in California, for example, legal mental capacity is determined through Probate Code Section 811. This statute serves to identify relevant areas of mental functions that can be assessed by a qualified psychologist or psychiatrist. In assessing an elder’s mental capacity under this section, a poor performance in any one of the identified areas is not enough to make a determination that the elder lacked the mental capacity in a given circumstance. The real question is whether the elder’s poor performance rendered him or her unable to understand that the power of attorney was granting his or her agent the authority to make financial or healthcare decisions.

When the elder’s mental capacity is in question at the time the powers of attorney (or trust) were executed, then the documents’ validity will also be questioned.

Again, powers of attorney for financial management and healthcare decision making, along with revocable trusts, can often serve as valid alternatives to the establishment of a conservatorship of the person or estate. A qualified elder law attorney can assist in creating these documents, provided the elder’s mental capacity is intact.

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