Alternatives to Conservatorship: Power of Attorney, Trusts, and Other Options

Key Takeaways

• Families may prefer alternative arrangements to conservatorships if they feel that a conservatorship would be too restrictive or fail to preserve the autonomy of the protected person.
• Common alternatives to conservatorships include a power of attorney, advance healthcare directives, joint property ownership, revocable trusts, a representative payee, and supported decision-making.
• Each option has its own benefits, but the best solution will depend on your goals, the unique needs of the protected individual, and the level of their incapacity.
• Always consult an attorney for support in making your decision on whether a conservatorship is right for you, as an experienced attorney will be able to provide targeted advice based on your unique situation. 

Introduction

When you have a family member who is no longer functioning at their full mental capacity or is unable to make decisions on their own, it can be a heavy weight as you try to decide how to ensure their welfare. Whether you have a child with a developmental disability who is about to turn 18, or a parent who has reached elderly age and no longer has the same mental faculties they once did, you may be questioning the best arrangement for managing their affairs and preserving their well-being.

Although a conservatorship can be a beneficial arrangement for ensuring a person’s financial or personal needs are handled, a conservatorship may not always be the ideal choice, as it can take away important control from the protected individual. Fortunately, there are several options for supporting an individual in managing their affairs that are less invasive and costly than a conservatorship.

This guide unpacks the various alternatives to conservatorships to help you understand which legal arrangements may provide the best solution for you and your family.

What Is Conservatorship?

A conservatorship is a court-ordered legal arrangement where an individual, known as a conservator, is appointed by the court to make decisions on behalf of a protected individual, known as a conservatee or ward, to preserve their best interests. Depending on the type of conservatorship, the conservator may be responsible for making decisions about finances, healthcare, living arrangements, and daily needs on their behalf to ensure their well-being.

A court will often order a conservatorship when a person has a disability or has experienced a level of mental incapacity where they can no longer manage their own affairs. Conservatorships are often beneficial for protecting an individual from making irresponsible decisions or protecting against vulnerabilities to financial elder abuse. A conservatorship is generally an involuntary arrangement, but can occasionally be requested by the protected individual themselves if they have concerns about managing their own finances.

Why Do People Seek Alternatives to Conservatorship?

People seek alternatives to conservatorships when they feel that a conservatorship may be too restrictive or conflict with an individual’s rights. A conservatorship provides substantial control to one person over another’s affairs, which can be invasive, risky, and even unnecessary depending on an individual’s mental capacity.

The main reasons for avoiding a conservatorship include:

• Limits on Autonomy and Rights – Conservatorships often strip an individual of their personal freedoms by limiting their ability to make decisions and placing them into the hands of a conservator instead.
• Lack of Privacy – Conservatorships are a matter of public record, which can be an invasion of privacy for individuals and their loved ones.
• Cost and Complexity – Establishing and maintaining a conservatorship involves intensive scrutiny and involvement from the courts, which may add up to considerable legal fees.
• Risk of Abuse – Due to the level of responsibility placed on a conservator, there is also an unfortunate substantial risk of exploitation or abuse of the protected individual. 

If a person wants help managing their affairs but does not feel they need a conservatorship, they may pursue less-intensive options with fewer limitations on their personal rights and freedoms, such as a power of attorney or a joint ownership agreement.

When Should You Consider Alternatives to Conservatorship?

It’s a good idea to consider an alternative to a conservatorship when you believe that a conservatorship would be too restrictive or when you or your loved one maintains mental capacity to make decisions on their own. You should consider alternatives to conservatorship first, as a conservatorship should be a last resort, given its restrictions on personal freedoms and the high costs necessary to establish and maintain it.

You may consider alternatives to a conservatorship in the following instances:

• The individual in question maintains their mental capacity to make decisions.
• There are trustworthy members of the family able to offer support to the protected individual.
• You are first looking into options for providing care and support for an individual unable to make their own financial and medical decisions.
• You are concerned about the extensive court costs and procedures for establishing a conservatorship.

Alternative #1: Power of Attorney (POA)

What Is a Power of Attorney?

A power of attorney (POA) is an arrangement where an individual, known as a principal or grantor, gives another individual (the agent) the authority to make important decisions on their behalf. There are several different types of power of attorney, ranging from a durable power of attorney to a limited power of attorney, depending on the scope necessary and preferred by the grantor of the arrangement. 

An agent may be granted the authority to make healthcare decisions, financial decisions, or receive general powers. A POA may be durable, meaning the POA maintains the ability to make decisions, or springing, meaning it only comes into effect after certain circumstances, like incapacity.

When a POA Is a Good Fit

Designating a power of attorney is a good fit in cases where an individual needs support with managing certain decisions, but wants to preserve their autonomy to make their own decisions. A POA is usually a good fit for a temporary arrangement or when the individual in question wants to maintain primary control and the ability to revoke the agreement at any time. 

A POA is a helpful consideration in some of the following scenarios:

• You are traveling abroad and will need someone to make decisions on your behalf while you are away.
• You are a business owner or manager who needs support to facilitate transactions or contracts as you cannot be physically present for all of them.
• You are undergoing a medical procedure and need a POA in case affairs arise while you are incapacitated.

One of the key differences between a conservatorship and a power of attorney is that a POA preserves the autonomy of the grantor, as their decisions continue to carry the same weight and they may revoke the arrangement at any time. While a conservatorship is court-ordered and compulsory, a power of attorney is completely voluntary, giving more options to people who need support making decisions without yielding too many rights.

Benefits and Limitations

Benefits

• A power of attorney arrangement offers flexibility and control depending on the type of arrangement established.
• The various types of POA allow individuals to specify an arrangement that speaks directly to their needs, whether it’s for financial, medical, or sweeping decisions.
• A grantor can establish set terms and deadlines for a power of attorney arrangement based on their needs.

Limitations 

• A power of attorney is not effective when an individual is significantly incapacitated and unable to make their own decisions.
• If a person has a condition like dementia that features “lows” and “highs,” they may have the ability to revoke the POA even when they shouldn’t, unlike a conservatorship, which is established by the court and difficult to overturn. 
• A POA has limited oversight compared to a conservatorship, which has regular check-ins.
• A power of attorney may not properly reflect the grantor’s wishes at the time it is implemented if the grantor has not revisited and updated their power of attorney recently.
• A power of attorney requires the foresight sufficient to establish it before the incapacity or unavailability arrives.

Alternative #2: Advance Healthcare Directives

What Are Advance Directives?

Advance directives are legal documents used to outline your wishes for future medical treatment in the event that you are no longer able to communicate or care for yourself, ensuring that your wishes are understood. These documents often describe how to handle situations where the need for life-sustaining treatment comes into question, such as the need for breathing machines, feeding tubes, or resuscitation procedures.

Types of advance directives may include:

• Living will – You may place information about your preferences for end-of-life care in your will.
• Durable power of attorney – An arrangement that is technically a type of advance directive that appoints a person to make decisions on your behalf if you become unable to be present or communicative for those decisions.
• Physician orders for life-sustaining treatment – A form outlining and specifying medical wishes to doctors providing treatment.
• Do Not Resuscitate – An order specifying not to perform CPR or life support if a person’s heart or breathing stops.

Who Should Consider Them?

Anyone may consider an advance healthcare directive, but these documents are often more valuable for individuals who have chronic healthcare conditions and are at an increased risk of facing a life-threatening medical event. They are also beneficial for individuals who have strong opinions about how their medical affairs should be handled when they are incapacitated.

Benefits and Limitations

Benefits 

• Advance directives can preserve a person’s wishes and ensure these desires are known and followed as they approach the end of their life.
• The individual gets to choose who makes decisions in an advance directive, unlike in the case of a court-appointed conservator, without high costs.
• An advance directive remains private compared to a conservatorship that takes place on the public record.

Limitations

• Advance directives focus primarily on medical decisions, rather than general everyday or financial decisions, which may be insufficient for addressing one’s needs.
• These documents only take effect when you are incapacitated, and may not be beneficial for general daily decisions.
• Individuals who have conditions like paranoia or early-stage dementia may be able to revoke the arrangement even when it’s not in their own best interests.

Alternative #3: Revocable Living Trusts

How a Living Trust Works

A revocable living trust works by placing designated assets into the ownership of a living trust, which is then managed by a trustee. The assets remain in the trust for a designated period of time and are eventually distributed to the designated beneficiaries of the trust by the trustee. A living trust is designed to provide benefits to beneficiaries who are identified in the trust by the trustor. After the administration of a trust is settled, a trustee will distribute assets according to the instructions in the trust.

In a revocable living trust, the trustor can make changes at any time prior to their death. However, the trust will become irrevocable after the trustor dies, which means it cannot be changed unless there is a legal contest to do so. However, there are irrevocable living trusts where the trustor is not allowed to make changes unless all beneficiaries and the trustee agree. When creating a trust, the trustor can specify what type of trust they want.

When a Trust is a Good Fit

A trust is a good fit when a person wants to proactively plan for the future of their estate and its assets. Establishing a trust is especially beneficial when a person has a significant asset portfolio with several belongings. A trust ensures that these assets are not in limbo after the trustor’s incapacity or death and are not subject to the probate process. Instead, there are clear instructions for how these assets should be distributed to eliminate ambiguity and minimize the risk of legal disputes.

Benefits and Limitations

Benefits

• A trust is helpful for protecting assets from creditors and preserving them for beneficiaries to receive in the future.
• A trust is a sweeping estate plan that provides several benefits for settling one’s estate and determining how to distribute one’s assets to beneficiaries after their death.
• A trust is beneficial as a proactive estate planning tool for anyone who wants to preserve assets.

Limitations

• Assets placed into a living trust are legally no longer owned by the trustor, which limits their ability to maintain control over their assets. 
• If a person is already incapacitated, then they will not have testamentary capacity to establish a legally valid trust, making it a proactive tool, not a reactive one.
• A living trust is used as a helpful estate planning tool for determining how assets should be managed and distributed, but it is not a particularly helpful arrangement for addressing healthcare or daily personal decisions.

Alternative #4: Joint Bank Accounts and Authorized Signers

What These Arrangements Allow

A joint bank account owner will allow for an individual to have equal rights to the resources in a bank account, while an authorized signer will provide a trusted individual with the authority to sign off on transactions on the protected individual’s behalf. In both arrangements, the individual in question still retains ownership and control over their own finances and assets, but with additional support either in budgeting, signing checks, or managing financial transfers.

An authorized signer has limited control over assets and has no rights to personal ownership of the assets, but can take actions like signing checks, making withdrawals, or paying debts. Joint ownership is more invasive and involves greater control, as both parties have the same rights to the funds, regardless of who contributed the funds to the account. So the level of involvement and control that a third party should have should be a consideration when deciding on the ideal arrangement between these two options and a conservatorship.

When It Makes Sense

Joint bank accounts make sense when a person retains their mental capacity, but needs some assistance managing their financial affairs, and there is a trusted person to help with managing finances. These arrangements work for individuals who want to maintain their autonomy over decision-making but may need support in managing finances. 

Joint ownership also makes sense when an individual has a small estate, trusts a spouse or family member to access the account, and knows who they want to leave their assets to in the event that they pass away. An authorized signer makes sense when someone needs additional support in managing finances for convenience or additional security in the event of disability or illness. The most common example is when a person maintains a strong mental acuity, but they may be physically limited in their ability to write checks or sign important financial documents.

Benefits and Limitations

Benefits

• An individual maintains ownership and access to their own funds and financial decisions, but they may benefit from support in select areas.
• Joint ownership can be used as an estate planning tool, allowing the joint owner to retain ownership after an individual passes away, without any additional legal process needed. 
• An authorized signer’s access can be removed at any time if an individual feels their support is no longer necessary. 

Limitations

• This option may not be appropriate if there is no trusted individual to provide joint ownership.
• If a person is severely incapacitated, these arrangements may allow them to be easily taken advantage of through the misuse of funds by a signer or joint owner.
• Joint owners are often difficult to remove from their position without their consent once established and may result in unintended estate planning consequences where the surviving joint owner inherits the account over whoever the decedent truly intended to benefit from it. 

Alternative #5: Representative Payee for Government Benefits

What a Representative Payee Does

A representative payee for government benefits receives payments from government agencies like the Social Security Administration on behalf of the individual in question, such as retirement, disability, or Supplemental Security Income (SSI). The payee receives these checks directly and is then responsible for disbursing these funds and using them in the recipient’s best interests. These interests may include paying bills, buying groceries, or budgeting some funds for the recipient.

When This Option Is Appropriate

This option may be appropriate when an individual has reached a level of incapacity that prevents them from being trusted to manage their finances carefully or responsibly, but government benefits are the primary source of income, and they do not have other assets. It is also helpful when an individual still has the ability to make a majority of their daily decisions, but finances are the primary area of concern.

Benefits and Limitations

Benefits

• This arrangement provides more financial stability when there are concerns regarding an individual’s ability to manage their own finances.
• This pathway avoids the extensive costs and legal complexity associated with establishing a conservatorship.
• An individual has the right to challenge a payee or request a new payee if they believe they are being taken advantage of.

Limitations

• An individual who has the capacity to manage their finances would be limited in their ability to access their benefits.
• If an individual has other property or assets, the payee will not have access to them, which is not helpful if a person needs more intensive support. 
• This arrangement may subject an individual to the risk of fraud or asset mismanagement if a payee acts irresponsibly or maliciously.

Alternative #6: Supported Decision-Making (SDM)

What Is Supported Decision-Making?

Supported decision-making is a legal arrangement where an individual maintains their legal rights and decision-making capabilities, but they designate a person to assist them in making important decisions. This arrangement often provides a healthy middle ground for individuals who may need support but who do not want to sacrifice their own say. In supported decision-making, the supporter does not make the decision but instead helps an individual decide. 

An example is a young adult with a developmental disability who has just turned 18. While they may need some support to process decisions and the details surrounding them, they still understand the importance of choices and their consequences. In this case, instead of a person having full control over one’s bank account or budget, the individual can ask for support with making financial decisions. SDM often offers the “best of both worlds,” allowing individuals to receive assistance without ceding their legal rights.

Who Is a Good Fit for SDM?

Individuals with developmental disabilities are typically a good fit for SDM, as it allows them to make their own life choices but with the support of trusted individuals, instead of having their decisions completely dictated by someone else. Individuals who benefit from SDM are those who are often capable in many ways, but could simply use some support. This arrangement may not be as beneficial for individuals who are at risk of losing complete mental capacity.

Benefits and Limitations

Benefits

• SDM allows individuals to maintain their rights and autonomy while receiving support and guidance with making important decisions when needed.
• Respects the right and freedom of individuals to make decisions that can come with potential risk, even when they may not be fully correct.
• Individuals have the choice to appoint trusted individuals to help them with various issues, and they can revoke this support at any time.

Limitations 

• For people who experience severe cognitive impairment or struggle to make their own decisions, this may not be a sufficient option for addressing their needs.
• There may still be some potential risk for undue influence on the individual in their decision-making.
• Not all professionals fully understand the scope of these arrangements compared to the popularity of alternatives like a POA, which means that they may not recognize this arrangement. 

How to Choose the Right Conservatorship Alternative

Choosing the proper alternative to conservatorships is important for ensuring you can find the right balance between finding adequate support for yourself or your loved one and ensuring that they are not stripped of important personal freedoms. You can choose the right alternative by considering your individualized needs based on your situation:

• Does the individual have the mental capacity to make decisions for themselves?
• Do you want to avoid court intervention entirely, or do you prefer having legal backing for your decisions?
• Should the individual maintain primary control over their decisions, or do they need a more advanced layer of support?

Consider these questions in addition to the benefits and drawbacks of each of the above methods. However, your priority should be to consult an attorney for additional support in making your decision. An attorney can offer you informed, personalized advice tailored to your unique needs and family dynamics.

The Role of an Attorney in Choosing Alternatives

An attorney plays an instrumental role in helping individuals understand their options for protecting themselves or their loved ones. A conservatorship attorney has considerable experience with the ins and outs of conservatorships, guardianships, and alternative arrangements. This experience gives them valuable context that they can apply to your case to provide accurate and helpful advice.

They will offer support in an honest discussion around your options, helping you understand the benefits and drawbacks of all your options and how they may influence your situation. Then, once you decide on which option is the most reasonable for you, an attorney can help you take the steps to establish a legal arrangement that provides an appropriate balance between financial protection and preserving your rights.

Find the Right Solution for You With RMO

Though a conservatorship may be a helpful arrangement in cases where an individual is incapacitated, it may not always be the ideal choice compared to others. An attorney can help you determine which path makes the most sense to protect your loved one’s well-being without sacrificing important rights. 

The conservatorship attorneys at RMO can help you evaluate your options and execute on a plan that provides your family with the security you need. With decades of experience in navigating all sides of conservatorship arrangements, our lawyers deeply understand the ins and outs of these legal arrangements, as well as the potential benefits of conservatorships compared to other legal options.

Schedule a consultation with the attorneys at RMO to discuss the best path forward for your family.

Frequently Asked Questions

Glossary

Conservatee – The protected person in a conservatorship arrangement, also known as a ward.

Conservator – An individual appointed by the court to make decisions on another individual’s behalf in their own best interests.

Conservatorship – A legal arrangement in which a court appoints a conservator to manage the financial affairs or personal care of an incapacitated individual.

Power of Attorney – A legal document that grants someone the authority to act on behalf of another person in financial or medical decisions, either while they are alive or incapacitated. It ends at the person’s death.

Testamentary Capacity – A testator’s ability to make sound financial and legal decisions at the time of the creation of their will or trust.

Trust – A legal arrangement in which a grantor transfers assets to a trustee, who manages and administers those assets for the benefit of designated beneficiaries.

Ward – The protected person in a conservatorship arrangement, also known as a conservatee.