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Contested Conservatorships and Guardianships

i. What is a conservatorship?

Conservatorships are court-supervised proceedings in which a third-party, typically an individual, is given the fiduciary responsibility to manage the financial affairs of an “incapacitated person.” An incapacitated person is either (1) a minor, someone under the age of 18, or (2) an adult who, because of a physical, mental, or health impairment is unable to receive and evaluate information or communicate decisions related to his or her management of his or her financial affairs.

Conservatorships are initiated upon a petition to the court by an interested person, typically a family member or close friend of the incapacitated person. The petition is typically filed along with a copy of a physician’s certificate that states that the incapacitated person is no longer capable of managing his or her financial affairs.

i. What are the responsibilities of a conservator?
If the court determines that a person is, in fact, incapacitated, the court will appoint may appoint the petitioning party as the conservator, to be put in charge of all the financial affairs of the now “protected person.”  Property and all other assets of the protected person are legally titled in the name of the conservator, as conservator of the protected person.  The conservator typically provides a monthly budget and must provide periodic accountings to the court, which may be approved by the court upon notice to all interested parties.
iii. How should a conservator prepare a budget?
The conservator should submit to the court, a very detailed and comprehensive budget, which presents all funds available to the protected person and the anticipated expenses related to their general health, care, maintenance, and welfare.  Our attorneys are experienced in this area and are able to assist clients in presenting a detailed and comprehensive budget to the court.
iv. How should a conservator prepare an accounting?
A conservator should prepare an accounting for the protected person that details the principal receipts, income, and expenditures of the protected person.  The court will determine the frequency with which the conservator must file these accountings.  A guardian should prepare an annual report of the protected person’s health, condition, living arrangements, and other information as ordered by the court.  Our firm has prepared many of these accountings and is able to prepare required documentation for the Court’s required review of the conservatorship and guardianship activity.
v. Why are conservatorships often contested?

Conservatorships are one of the most prevalent types of litigated cases in the probate courts in the state of Hawaii.  It is the author’s belief that the chief reason that conservatorships are often so heavily litigated is the fact that these types of cases are often two cases in one. The first case is control of the assets while an elderly parent or other close family relative is still alive. The second case is often the result of some type of litigated pre‑death will or trust contest because often there has already been improper or illegal changes in the estate plan which helps to bring about the action in the first place.

The fact that the protected person or object of the conservatorship is still alive, and is present and visible in the lives of those that are concerned, makes these cases among the most bitter contracted and expensive types of trust and estate litigation cases.

At this point in time the law in many jurisdictions is unclear as to the scope and breath of a conservatorship. Generally, under the law in virtually every state, a conservator has the right to amend or cancel an existing estate plan. For these reasons, both sides fear that lack of control over the protected person may mean a disinheritance at the end or during the conservatorship battle. Often litigated conservatorships contain allegations of both physical abuse and financial abuse against the protected person.

The advantage of litigating while an individual protected person is alive is that the person can be evaluated medically, and often psychiatrically, to make a case of susceptibility to undue influence or perhaps lack of capacity. This is in contrast to a situation where a person passes away, and a forensic psychiatrist who has never met the individual may be forced to reconstruct an individual’s legal capacity from the review of medical records. As time goes by and memories fade, witnesses become disbursed and hard to track down. This illustrates the point that it may be more cost effective to challenge conservatorships before the testator or settlor passes away.

vi. Why is the number of contested conservatorships increasing?

As the population continues to age and people live longer, and often outlive their mental faculties, the need for conservatorships and the presence of disputes around an elder person’s financial affairs is on the dramatic increase.

Petitions for conservatorship are often filed after suspicion of elder abuse or other financial abuse against an aging individual.  For this reason, conservatorships are often accompanied by other procedural tools such as petitions for an accounting and requests for additional discovery as to the soon-to-be protected person’s financial history.

Petitions for conservatorship also may uncover acts of undue influence in which wills, trusts or other estate-planning devices have been executed by an individual, who had diminished capacity such that one or more of the elements of undue influence are also present.

vii. What is a guardianship?
A guardianship is a legal proceeding in which the Court appoints a person to protect the incapacitated person by helping the incapacitated person meet necessary requirements for physical health, safety, or self-care.  An incapacitated person is either (1) a minor under the age of 18, or (2) an adult, who because of a physical, mental or health impairment is unable to receive and evaluate information or communicate decisions related to his or her ability to maintain his or her necessary health, safety, welfare, and maintenance.

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