Role and Responsibilities of a Conservator

Role and Responsibilities of a Conservator

What is a conservator?
A conservator is a person who a Colorado Court appoints to manage and protected the assets of a minor or an individual who is incapacitated by illness or accident. The conservator is accountable for responsibly managing, preserving and administering assets owned by, and for the benefit of, a minor or incapacitated adult. Under Colorado law, a conservator is held to a very high standard of care. A conservator is accountable to the individual, the Court and other interested persons. They are expected to act prudently and in the best interests of the protected individual at all times. 

How is someone appointed to be conservator?
The petitioner – typically a family member or friend – will nominate a conservator within the Petition for Appointment of Conservator. It is important that family members and friends work together with the petitioner to identify who best to serve in this role before filing the petition. Sometimes people identify who they wish to have act as the conservator in their will or power of
attorney documents many years before needing one. As a result, that individual may not want to take on that responsibility or is no longer capable of serving in that capacity. If this occurs, the petitioner should meet with the protected person’s family to discuss who else should be nominated as the conservator before filing the petition. 

If I’m appointed conservator, am I also this person’s legal guardian?
It depends. There are many instances when the petitioner requests a guardianship and a conservatorship at the same time. A conservator manages and protects a person’s assets, while a guardian makes decisions about the individual’s health and welfare. If one nominee is willing to manage both responsibilities, he or she certainly can so long as the Court agrees. In that case, only one hearing is needed. If two separate people are appointed conservator and guardian, they are expected to work together in the best interests of the protected person.

What authorities do I have as conservator?
Your authority is outlined in the “Letters of Conservatorship” and the “Order Appointing Conservator.” Both documents will be issued by the Court following the hearing. The conservatorship may be limited in duration, scope and level of Court involvement. The Court seeks to maximize the protected person’s independence and involvement, and may require specific actions to achieve this standard.

Upon appointment, you will be asked to review and sign an Acknowledgment form that summarizes your appointment and responsibilities. It is important that you read the Court’s Order thoroughly and comply with the terms of the appointment before signing it. The form also outlines specific due dates for reports to file with the Court. It is very important that any reports requested by the Court are filed on or before the due date.

Once appointed, you will have a fiduciary duty to the protected person, meaning that you must always act in the best interest of and with undivided loyalty to them. You must avoid transactions that cause a conflict of interest and you cannot enter into transactions that will benefit you at their expense. In some instances, you may need to get Court approval before finalizing any transactions, e.g., the sale of a property.

As conservator, you will have the authority to take title to the protected person’s assets and control their financial affairs. The assets that you control are referred to as the “conservatorship estate.” These assets must be kept separate from your own assets. Since you are now accountable for these assets, you may employ the use of professionals and other agents to carry out your duties, unless otherwise specified by the Court.

What duties do I have as conservator?
Please note all due dates within the Order of Appointment and on the Acknowledgment form. The reports must be filed to the Court on or before the due dates. Copies also must be sent to all interested persons as identified in the original Order and/or any subsequent orders. If you need help preparing the financial reports, we here at Evans Case can assist you.

Conservator duties include:
Usually within 90 days of being appointed, you must submit a Financial Plan with Inventory and Motion for Approval (JDF 882). When preparing the Inventory, the conservator should gather all documents to identify the estimated value of all assets and liabilities, e.g. bank statements, IRAs and county property records. When preparing the Financial Plan, the conservator should review bank statements, check registers and past bills to estimate monthly income and expenses for a 12-month period. If questions arise, our attorneys can help you prepare. The Court will review the Financial Plan to ensure it is in the best interests of the protected person.

  • Once you have control of all of the protected person’s assets (or the assets designated by the Court), you then have the authority to manage and administer the assets for the protected person’s benefit. Be sure to show the “Letters of Conservatorship” document to banks and other creditors, as it identifies your authority to act as conservator. You need to retitle all bank accounts and assets as: “Your name” as conservator for “name of protected person.” Each bank may have its own way to title the account, but the account title must reflect the Conservator/Protected Person relationship. Additionally, when you sign documents as conservator, you must disclose your conservator/protected person relationship by inserting your name and title of conservator after the name of the person whose assets you are managing.
  • You must set up and keep complete financial records. The accounting system and reports to the Court should reflect in detail all income and disbursements (similar to a check register) for the reporting period as identified in the Court order, and the value of all assets and liabilities as of the last day of the reporting period. You should maintain all supporting documentation in the event that the Court or interested persons request to review the financial activity.
  • You must file any required tax returns.
  • You must keep the conservatorship estate’s assets invested and you will be held to a higher standard of care than if you were investing your own funds. Colorado law requires conservators to follow the “prudent investor rule,” which generally means that you will diversify the investments, balance the need for income versus long-term principal growth, not make risky investments, and continue to reevaluate and consider new advice on an ongoing basis.
  • You will make distributions to the protected person for their care and expenses (or to third parties directly who provide some beneficial service to the protected person). The Court can restrict the terms under which distributions may be made by requiring the conservator to file a Motion to Withdraw requesting a Court Order authorizing the withdrawal/distribution of funds. The Court also can mandate distributions for the protected person’s health, education and maintenance. You may have discretion for whatever you determine to be in the best interest of the protected person. Under certain circumstances, you may be personally liable for improper distributions, and the Court may order you to make a distribution at the protected person’s or interested person’s request.
  • Each year, you must submit a Conservator’s Report (JDF 885) to provide a complete accounting of all financial transactions and to present the current status of the conservatorship estate.

How long must I serve as conservator?
A conservatorship may end for several reasons, including:

  • The protected person regaining capacity to manage his or her financial affairs.
  • Upon the death of the protected person.*
  • Upon the resignation, removal or death of the conservator. If this occurs, a Petition for Successor Conservator will be filed with the Court.
  • For a minor, when he or she turns 21.
  • A date set by the Court.

*A conservator continues to have duties to the conservatorship estate after the protected person’s death, and must ensure delivery of the protected person’s assets to the personal representative of the protected person’s estate. You will be required to file documents with the Court and interested persons regarding the termination of the conservatorship.

What are my liabilities as conservator?
The Court may require you to obtain a type of insurance policy called a “fiduciary bond.” The bond assures that the protected person’s assets are protected in the event that you fail to carry out your duties or there is a loss to the conservatorship estate. If a bond is required, it is generally paid from the “conservatorship estate.”

Additionally, you may be personally liable to the protected person or a third party in certain circumstances, including when the relationship is not disclosed, you are directly at fault, grossly negligent or acted criminally. In some situations, you may be personally liable even though your improper actions were not intentional or negligent. For that reason, many conservators secure
Errors and Omissions insurance.

Mandatory reporting of an at-risk elder
At at-risk elder is any person who is 70 years of age or older. As the conservator, you are considered a “mandatory reporter.” If you witness or become aware that an at-risk elder is or at risk for abuse, caretaker neglect or financial exploitation, you must make a report to law enforcement within 24 hours.

Am I compensated for serving as conservator? Who is responsible for related expenses?
You are entitled to reasonable compensation and reimbursement of out-of-pocket expenses from the “conservatorship estate” for acts on behalf of the protected person for the duration of the conservatorship (e.g. hiring professionals to help you provide care and make decisions). Reasonable compensation is determined on a case-by-case basis and good recordkeeping and accounting are absolutely necessary. Any compensation is considered income to you, and as such, is generally taken as a tax deduction by the protected person.

In addition to your own compensation and expenses, you may hire professionals, including an attorney, accountant, and others as you manage the assets of the conservatorship. Fees and anticipated expenses are usually included in the initial Financial Plan, and are approved or denied by the Court. The need for Court approval and reimbursement varies by each case.

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