Elder Law Matters
Guardianship and Conservatorship
By: Joseph T. Buxton, III, CELA
This is the beginning of a series of ten articles on problems that
people face when they fail to plan for the management and disposition
of their estate. Today we will discuss the problems created when
an individual fails to plan for incapacity or disability. If the
time comes when you are unable to manage your affairs and you cannot
perform the daily activities of a normal life, who will handle these
matters? If you have not appointed someone (your agent) under a
durable power-of-attorney or created a trust where a substitute
or alternate trustee can manage your affairs, or if you have not
appointed someone under an advanced medical directive to attend
to health decisions for you, then someone in your family will have
to seek to qualify as your guardian and conservator to take care
of you. A petition will have to be filed in the Circuit Court of
the city or county in which you reside asking the Judge to appoint
an individual to serve as your guardian or conservator, or both.
A guardian is appointed to be responsible for your person, that
is, to take care of your physical needs, your medical treatment,
your medication and where you will live. A conservator is appointed
to attend to your financial affairs, protect your assets, pay your
bills, invest your funds, and preserve your resources.
If your resources consist solely of Social Security or similar payments
your guardian can perform both functions, that is, take care of
your person and your assets. However, if you have other assets,
then a conservator will be appointed to manage your finances and
assets. Once appointed, the conservator will qualify and post a
bond with surety, i.e. with an insurance company, before the Clerk
of the Circuit Court. Once qualified, the conservator must file
an inventory within four months, and an accounting within six months
of appointment and file an accounting every year thereafter. These
accountings are filed with the Commissioner of Accounts in the county
or city in which the conservator was appointed. The Commissioner
of Accounts is a practicing attorney appointed by the Circuit Court
for the purpose of supervising the handling of conservatorships
and estates. The guardian, on the other hand, is subject to supervision
by the Department of Social Services in the city or county in which
you live.
The guardianship/conservatorship proceeding can be time consuming.
It normally involves the retaining of an attorney to assist your
family in filing the Petition. The Court will then appoint a Guardian
ad Litem, who is an attorney specifically trained to represent the
Court and the disabled person in ascertaining the facts in the case.
Medical evidence will be necessary to prove the extent of disability
or incapacity, and a hearing before the Judge of the Circuit Court
will be necessary. In some cases, a guardianship or conservatorship
proceeding may be contested by other members of the family who either
disagree with the extent of disability or wish to have someone else
appointed. The bottom line is that these proceedings can often be
expensive, time consuming and frustrating for the family.
The alternative to the appointment of a conservator would be for
you to appoint an agent to act for you under a durable power-of-attorney.
If the document is properly drafted the agent should be able to
do anything that you can do with respect to the management of your
financial and legal affairs. A durable power-of-attorney is effective
until you die or want it revoked or your agent ceases to function.
It is effective even though you have become disabled.
I would caution, however, against the use of preprinted power-of-attorney
forms. Powers-of-attorney are not forms. They are valuable legal
documents and often are specifically crafted to address the real
needs of the maker. For example, your agent should have authority
in the power-of-attorney to change the title to assets, to qualify
you for Medicaid, or to make gifts from your estate for the purpose
of reducing estate taxes. The power should also include specific
authority to deal with real estate. If these provisions are missing,
then the power-of-attorney can be of limited value.
The agent, or attorney-in fact, as they are known, should be someone
who has the ability to manage your affairs and who is truly trustworthy.
Furthermore, you should add a provision appointing a substitute
agent or attorney-in-fact, should your agent become disabled or
die. A power-of-attorney is generally effective when you sign it
unless you specifically direct otherwise and will be effective as
long as you or your agent lives, unless either dies or you revoke
the power.
In addition, if real estate has to be transferred for you, the power-of-attorney
must be recorded in the Circuit Court in the city or county in which
the real estate is located. And, finally, when using a power-of-attorney
financial institutions and stock transfer agents will often require
a “fresh” or recently signed power-of-attorney. If you
obtain a certified copy of the power-of-attorney from the Clerk
of Court, the Clerk will stamp the power with the date and the Clerk’s
seal, which generally brings the power up-to-date and makes it current.
Finally, a new Virginia law provides that if you include a provision
in your power-of-attorney that you may give your attorney-in-fact
specific instructions by notarized memorandum or letter on how they
should carry out their discretion under your power-of-attorney,
your instructions are binding upon your agent. In other words, you
can tell the agent specifically what you want them to do and how
to do it. Be sure that your instructions are notarized by a Notary
Public and delivered to your agent.
If you have a power-of-attorney, it should be reviewed and brought
up-to-date. If not, you need to have one. This document is perhaps
the most important single ingredient to an effective estate plan.
Joseph T. Buxton III is a certified elder law attorney by the National
Elder Law Foundation with offices in Urbanna and Yorktown, Virginia
Revised: 11/07/05
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