A durable power of attorney is a planning tool, which can operate in the event you become incapacitated. It gives someone you designate the power to handle financial matters of your choosing, if you become unable to do so. In a perfect world, this document is drafted while you are of sound mind and always honored- no matter what. However, we know that we do not live in a perfect world.
Sometimes, we do not get around to having a power of attorney done before it’s too late. Other times we get the document done as part of an estate plan but do not update it and designees are no longer around or able to serve. Worst case scenario, there is some contention between family members, and one may want to take control over your affairs- even if you did not designate them. In the case of any of these unplanned scenarios, if you are unable to handle your own financial affairs due to physical or mental infirmity, conservatorship proceedings will need to be commenced in probate court.
A conservator has broad power to handle assets on behalf of someone that has been deemed a “protected individual”, that is, legally determined to be unable to manage his/ her affairs. These proceedings are public and require annual accountings and other filings that may be necessary. A conservator must be deemed suitable to serve by a court. Some counties require criminal background checks to be submitted along with petitions. In a number of cases, depending on the assets, conservators are required to file a surety bond. This requires a conservator to satisfactorily demonstrate to a bond agency that he or she is creditworthy or otherwise can be trusted. Many times, if a loved one cannot qualify or if there is not a suitable loved one able and willing to serve as conservator, a third party is appointed and can bill to manage the protected individual’s affairs. This can become costly.
No one has a crystal ball. We never know what may happen, but it’s always best to be as prepared as possible. Have your estate plan documents done so that in the event court proceedings are commenced - for whatever unforeseeable reason- the court can take into account what YOU wanted. Contact GLLG to draft or review your plan documents today!