How Do Conservatorships Work in Arizona?
By Zachary Mushkatel on February 3, 2016
A conservatorship is a protective proceeding initiated in the Probate Division of a local Superior Court to protect, or “conserve,” the funds and other assets of an incapacitated adult or a minor and to ensure that a person’s financial obligations are being met.
The creation of a conservatorship may be appropriate in many different situations. In the case of minors, the creation of a conservatorship may be required in the event of an inheritance or a settlement or verdict in a personal injury case (ex: car accident or dog bite). In the case of adults, a conservatorship may be required for an adult who is no longer able to reasonable manage his or her financial affairs due to physical or mental decline and impairment. Such an impairment can be caused by dementia (Parkinson’s, Alzheimer’s, Lewy Body, Vascular dementia, etc.), a degenerative physical disease, a stroke, or injuries caused by a motor vehicle accident.
During the conservatorship proceedings, a Conservator will be appointed by the Court to manage, protect, and conserve the assets of the protected persons. Upon accepting the appointment, the Conservator is subject to fiduciary duties and responsibilities. The breach of these duties can lead to severe civil penalties. For more information on the fiduciary responsibilities of a Conservator, please visit the Arizona Supreme Court’s website for probate training.
How Is a Conservator Appointed?
A Conservator is appointed following the filing of a petition with the Probate Division of the Superior Court and a hearing before a Judge or Commissioner. The petition must tell the Court why the appointment of a Conservator is necessary, what assets may be at risk, and who is being nominated to serve as Conservator.
In the case of a minor, after the filing of the petition, the Court will set a date and time for a hearing. Both parents of the minor, if living, must be notified of the hearing. In the event the minor is over the age of fourteen (14), the minor must also be provided with notice of the hearing. At the hearing, the Court will take testimony about why the conservatorship is necessary, why the nominated conservator is the right person to serve*, and what the nominated conservator intends to do with the minor’s funds/assets until the minor reaches the age of majority.
In the case of an incapacitated adult, prior to filing a petition the incapacitated adult’s physician will need to be consulted for an evaluation and the completion of a required questionnaire titled Guidelines for Health Professional’s Report.” Then, following the filing of a petition, the Court will appoint an experienced attorney to represent the incapacitated adult. The Court only appoints attorneys who either have a history of representing the incapacitated adult or an attorney that has completed the Arizona Supreme Court’s mandatory training for the representation of incapacitated adults.
A hearing will then be held during which evidence and testimony must be presented to prove that the incapacitated adult can no longer manage his or her finances responsibly. In addition to the person filing the petition and the incapacitated adult, Title 14 of the Arizona Revised Statutes set forth all other persons that may need to be notified of the hearing. This can include the incapacitated adult’s spouse, adult children, or other adult relatives.
In reaching its decision on whether to appoint the conservator, the court will consider a great deal of information, including:
- The physician’s report or questionnaire;
- The report of the Court’s Investigator. The Court Investigator is a neutral employee of the Court that interviews the person filing the petition, the incapacitated adult, and other family members that may be involved. The Court Investigator also will conduct a visit to the incapacitated adult’s home;
- Information about the nominated conservator’s experience and background, including whether the conservator has any prior felony convictions or has overseen other conservatorships;
- The testimony of the person filing the petition, and the incapacitated person if he or she elects to testify;
- Any objections made by those who oppose the conservatorship or the appointment of the nominated conservator; and
- Other testimony and evidence that may help the Court reach a decision.
If the Court decides to approve the conservatorship, the Court will review the value of the incapacitated adult’s assets and resources.
After the conclusion of the hearing, and issuance of an Order appointing a conservator, Letters of Appointment as Conservator will be issued by the Clerk of the Court. It is important to note that a conservator does not have the authority to act on behalf of the incapacitated adult until the Letters of Appointment have been issued.
What Are a Conservator’s Duties?
The conservator has ninety (90) days from the date of appointment to file an inventory of the protected person’s funds and assets. A complete and accurate accounting of the protected person’s assets must be filed with the Court every year no later than the anniversary date of appointment. This accounting must report all financial transactions that took place within the accounting period.
In controlling and managing the financial affairs of the protected person, the conservator has a duty to act as a reasonable and prudent person. The conservator is tasked with paying all valid claims and bills related to the protected person, including but not limited to, medical, educational and housing expenses.
The assets of the protected person are to only be used by the conservator for the benefit of the protected person. The conservator can, upon Court approval, be reimbursed from the protected person’s money for administrative expenses and reasonable attorney’s fees. However, the protected person’s assets cannot be used for the conservator’s own personal benefit or gain.
How Does a Conservatorship End?
Upon the death of the protected person, a conservatorship will automatically terminate. The Court may also order the termination of the Conservatorship if proof is provided that the protected person has become able to handle their financial affairs.
The resignation of a conservator does not terminate the Conservatorship. If the Conservator resigns, the Court will appoint a successor to take over the role.
Are There Are Alternatives to a Conservatorship?
A conservatorship is not always necessary. For example an adult may execute a written instrument called a “durable power of attorney.” A durable power of attorney designates an agent (person or entity) to make decisions, such as management of a person’s financial affairs, if the person should become disabled or otherwise incompetent. However, at the time that a person executes a durable power of attorney instrument, the person must be legally competent.
Prior to becoming incapacitated, a person may also create a Living or Revocable Trust. The assets of the person creating the trust are then titled in the name of the trust. A successor trustee is named to control and manage those assets in the trust should the original owner become incapacitated. The successor trustee must use the assets in the trust for the benefit of the original owner.
Talk with an Arizona Estate Planning Attorney
If you are interested in learning more about establishing a conservatorship or an alternative to a conservatorship, or if you are exploring ways to challenge a conservatorship, please contact the law firm of Mushkatel, Robbins & Becker, PLLC. An Arizona estate planning lawyer from our firm would be glad to speak with you.
* In most cases, either one (1) or both of the minor’s parents are the nominated conservator.
Zachary Mushkatel is an Arizona native who earned his undergraduate degree from the University of Arizona in 2001 and his law degree from the University of Minnesota Law School in 2004. After serving as a public defender, he entered into private practice and, ultimately, joined forces with Mathis Becker to form the law firm known today as Mushkatel, Robbins & Becker, PLLC. In addition to criminal law, Mushkatel practices civil litigation, with a focus on estate litigation and personal injury cases. He also serves on the Board of Directors for the Surprise Regional Chamber of Commerce and Sun Valley Lodge, and he is an executive officer and member of the Board of Directors for the West Maricopa County Bar Association.