Trust Versus Conservatorship in California

by | Feb 7, 2022 | trusts

If you are considering legal options to protect an individual in your life who cannot take care of themselves on their own or manage their finances, understanding the difference between a trust and conservatorship is crucial. An estate planning attorney can help you determine which of these options is the best choice for you with the circumstances of your case.

Trust and Conservatorship Attorneys in California

The lawyers at Galanti & Copenhaver, Inc. have many years of experience assisting their clients with obtaining conservatorships and creating trusts. After learning more about the specific facts involved in your case, we can help you determine the best way to move forward. Contact our office today to schedule a consultation with one of our attorneys and find out more about what we can do to help you.

What Is a Trust?

A trust can be either revocable or irrevocable, and each option has benefits and drawbacks. A living trust is a legal document made during a person’s lifetime. The creator of a living trust is called the settlor, grantor or trustor. 

With this document, the grantor chooses a trustee who has the responsibility of managing the assets within the trust for the benefit of the beneficiaries. This estate planning tool is often used to make the eventual transfer of assets easier and allows the beneficiaries to avoid going through the probate process.

You can choose to have either a revocable or an irrevocable living trust. With a revocable living trust, the grantor can choose to serve as the trustee of their trust. If you opt for a revocable living trust, you will then choose a successor trustee to fulfill this role in the event you are no longer able to.

Special Needs Trust

In some cases, a conservatorship might not be the best available option. Depending on the circumstances, a special needs trust might be the better option to accomplish your goals to help someone. 

A special needs trust holds assets for someone who has a disability. The funds are spent as directed by the court on that individual’s behalf. The primary benefit of a special needs trust is that the beneficiary is still eligible for certain government benefits—because the funds are owned by the trust, not by the individual.

Click here to learn more about trusts.

What Is a Conservatorship?

A conservatorship occurs when a court appoints someone to manage an incapacitated or developmentally disabled person’s personal and financial affairs (Note: in California, the court appoints a Guardian to manage a minor person’s personal and financial affairs).

Conservatorships can be general or limited. A conservatee under a general conservatorship typically does not retain any decision-making powers. A limited conservatorship gives the conservatee the ability to maintain some or most of the control over their financial and personal affairs.

In California, a conservator is appointed as either the conservator of the person or the conservator of the estate. A conservator can be both in some cases, but this is not automatic. While the court appoints a conservator for each role, the person seeking to become the conservator filing a petition typically initiates the process.

Conservator of the Person

Someone who is appointed as a conservator of the person is responsible for ensuring that the conservatee has their basic needs met. This includes making sure that the conservatee has a shelter, clothing, food, water, and health care as needed. In some cases, the conservator will be responsible for making critical medical decisions on the conservatee’s behalf.

Conservator of the Estate

An appointed conservator of the estate is responsible for managing the conservatee’s financial accounts and assets. The duties that a conservator of the estate must handle include paying bills, making responsible investments, and preparing and filing the conservatee’s taxes. The conservator must also provide regular reports to the court and other parties regarding the financial accounting of assets.

Alternatives to Conservatorships

There are better options for all parties than a conservatorship in some cases. One alternative is to use a trust.  You can use a living trust to avoid the need for conservatorship for yourself. If you become incapacitated and cannot make important decisions, then the successor trustee you have chosen can make the decisions on your behalf.

Another alternative to conservatorship is to use a durable power of attorney. A durable power of attorney allows someone to name another individual as their legal representative for financial or other types of matters, including health care decisions. 

This power of attorney can be made to go into effect at any time the individual cannot make the specified type of decisions on their own behalf. An estate planning lawyer can help you choose the best estate planning tools to accomplish your goals.

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