If you are an adult but due to aging, an illness, or an accident are unable to manage your own affairs, then someone will have to manage your affairs for you. While none of us wants to think about this ever happening, it is a good idea to plan ahead just in case it does happen. To plan for this possibility it is important to have a comprehensive estate plan that includes not only a will, but also an advanced health care directive and durable power of attorney so that both your financial and healthcare affairs are managed according to your wishes. In the absence of such documents the court may step in and place you in a conservatorship. Conservators have court-ordered authority and responsibility to manage the affairs of those who can no longer make their own decisions about finances or health care. If the incapacitated person planned ahead and signed durable powers of attorney for finances and health care, that person won't need a conservator because the person named in those documents can take charge. A conservatorship is court ordered a legal arrangement that gives someone the authority and responsibility to manage another adult's affairs, including his or her finances and medical care. To learn about the estate planning steps that you should consider so that a conservatorship will not be necessary, contact a Long Island Conservatorships Lawyer who will be able to help you develop a comprehensive estate plan consistent with your goals.
When the court is charged with naming a conservator, it will determine who is the most qualified. Also referred to as an adult guardian, typically the court will seek to appoint a family member as conservator. However, if no family member is will, able or qualified to serve, the court may appoint a professional conservator who is a stranger. The conservator will remain in place as long as the court determines that he or she is needed. If your medical condition improves enough so that you are able to resume taking care of your affairs, the court will end the conservatorship. NY MHY LAW § 81.36. Otherwise, a conservatorship will remain in place until the person under the conservatorship passes away.
A conservator can be appointed to take care of your medical care and you personal care or to handle your finances. If you are incapacitated a conservator will likely be appointed to handle both. Referred to as a "conservator of the person," a conservator who is appointed to make decisions about your personal well-being will make decisions about your medical treatment, housing, and other aspects of your personal care. If necessary, the conservator may decide that it is in your best interest to live in an extended care facility or a group home. On the other hand, if you have an advanced health care directive that includes health care proxy and living will, then you would have appointed someone in advance to make health care decisions for you. You would have also left details as to what types of treatments you would prefer to receive.
A "conservator of the estate" makes decisions about your finances. The conservator will manage your assets, pay your bills, make investments, and collect income. The court will require the conservator of the estate to keep detailed financial records and regularly report to the status of your finances. Using advanced planning, you can execute a durable power of attorney to appoint someone you trust to handle your finances should you become incapacitated.
Conservator Appointment ProcessAfter a petition is filed requesting that the court appoint a conservator over you, the judge will review evidence as to your medical condition. If based on your mental capacity the judge determines that a conservatorship is required the judge will make that appointment. The State of New York has rules as to preferences for who should be appointed the conservator. Typically the spouse is given first preference followed by adult children, adult siblings and then other blood relatives. However, if the court feels it is your best interest, the court will appoint someone other than a blood relative such as a family friend or even a public or professional conservator. In all likelihood, however, a relative will be appointed. Public or professional conservators do not work for free. If a conservator is appointed for you, that person will be paid a reasonable fee for his or her services out of your estate.
While a conservatorship may not seem like the best alternative, there are some positive aspects to a conservatorship. Because conservators are supervised by the court, it is less likely that your estate's assets will be mismanaged or that you will be taken advantage of in some other way. Conservators are required to regularly submit reports to the court and must obtain permission before making major decisions such as selling real estate or terminating life-support.
Fees associated with conservatorshipThe conservatorship process is expensive. There are fees associated with the process of getting a conservator appointed. In addition, conservators are entitled to a reasonable fee for their services as well as reimbursement for expenses. While professional or public conservators routinely are paid, conservators who are family members often are not paid. However, a family member who has been appointed conservator can request to be paid as well.
Payment for fees associated with your conservatorship are paid from your estate. Thus, a long conservatorship may be quite a drain on your estates, leaving little in your estate to transfer to your loved ones through your will.
Ending a ConservatorshipA conservator must act for as long as the court deems that you need a conservator. The court will end a conservatorship when:
The best way to avoid a court-appointed conservatorship and to make sure your wishes are followed is to have an advanced health care directive (AHCD) and a durable power of attorney. An AHCD is a set of documents that gives instructions for doctors, nurses, other healthcare workers, and family members as to what type of medical care you want to receive should you in some way become mentally incapacitated so that you are unable to make decisions on your own. These two documents are a living will and a health care proxy.
Living Will. A living will a written document in which you state your preferences regarding the treatment you want to receive if you are incapacitated from a terminal illness. Examples of issues that can be addressed in a living will include:
In order for a living will to be valid it must be dated and you and 2 witnesses must sign it.
Health care proxy. A health care proxy is a specific type of power of attorney. With a power of attorney you give another person, called your agent, the legal authority to make decisions for you. In the case of a health care proxy, your health care agent would have the authority to make health care decisions for you in the event you are unable to do so yourself. In addition to appointing someone to be your health care agent, with your health care proxy you can also leave instructions regarding your treatment as well as other health care related issues. For examples you can leave instructions as to:
If other health care issues arise that are not addressed in your health care proxy or living will, then your health care agent would have the authority to make those decisions.
Durable Power of Attorney. A power of attorney allows you give another person called your "agent" or "attorney-in-fact" authority to make decisions for you with respect to your financial matters. Generally, a power of attorney becomes invalid you become incapacitated. However, in New York the rule is different. In New York, unless it specifically states otherwise a power of attorney is "durable." A durable power of attorney remains in effect even if you become incapacitated. However, like other types of powers of attorney it will terminate upon your death. NY GOB LAW § 5-1501A. A durable power of attorney can give very broad or very specific powers to your attorney-in-fact. In drafting your durable power of attorney you can decide the amount of power you grant your attorney-in-fact. With a durable power of attorney for financial matters, examples of authority you could grant your attorney-in-fact include:
If you decide that you need to terminate the power of attorney, you must give notice to the attorney-in-fact. You can revoke a durable power of attorney any time you choose to as long as you are competent. Revocation of a durable power of attorney occurs automatically if you die, the purpose of the power of attorney is accomplished, or the attorney-in-fact dies or becomes incapacitated. NY GOB LAW § 5-1511.
Upon your death, the winding up of your affairs and administering your estate is the job of the executor named in your will. If you want the person who you name as your attorney-in-fact in your durable power of attorney to also handle your affairs after your pass away, you must also name that person in your will as your executor.
A comprehensive estate plan does not only include documents that will ensure that your property is properly distributed upon your death, it will also prepare you and your family in the event you become incapacitated due to illness or accident. Documents that you should consider having in your estate plan include a durable power of attorney, living will, last will and testament, and trust. To learn more about steps you should take to avoid the possibility of conservatorship, as well as steps you should consider to ensure your wishes are followed in the event you become incapacitated, contact Stephen Bilkis & Associates, PLLC. We will help you develop an overall estate plan that reflects your individual goals. Contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your estate plan.