Is Conservatorship the Same as Power of Attorney? Key Differences

Key Takeaways

• A conservatorship and power of attorney are two arrangements that allow someone to make legal decisions on another’s behalf, but they have several significant differences.
• A conservatorship allows an individual to make key decisions in someone else’s best interests, but it can take away autonomy from the protected party.
• A POA allows a trusted individual to make decisions on another’s behalf when they are unable, but it is limited in its scope and the duties that it allows.
• A conservatorship attorney can help you determine whether one of these options is helpful for your case. 

Introduction

Whether a person experiences mental incapacity or has a temporary travel arrangement, there are many situations that can arise and prevent someone from being able to make their own legal, financial, or medical decisions. 

A conservatorship and a POA designation each offer a method for a trusted individual to make important decisions on another’s behalf to protect their best interests. However, the situations in which these two arrangements should be used can be quite different. 

Ultimately, no, a conservatorship is not the same as a power of attorney. A conservatorship involves a different scope of powers and has different use cases. This guide will outline how these two arrangements differ and when it may be appropriate to use each. 

What is a conservatorship? 

A conservatorship is an involuntary arrangement where a person is granted the authority to make binding legal, financial, and medical decisions on behalf of another individual by the court. The court will take rights away from the protected individual and grant them to the person making the decisions.

In some states, like Texas, this role is known as a guardianship. In this arrangement, there is the conservator or guardian, who makes the decisions, and a conservatee, who has these decisions made for them, also known as a ward. 

The conservator is responsible for acting in the best interests of the conservatee. It is their fiduciary duty to carefully protect their assets and well-being—this means responsibly managing their assets and not acting with misconduct for personal gain.

Some of the possible duties of a conservator may include: 

• Managing the finances of the conservatee
• Making medical decisions regarding the conservatee
• Buying or selling property on behalf of the ward
• Ensuring the health, safety, and well-being of the ward
• Making responsible investments on the conservatee’s behalf

The specific duties of a conservatorship arrangement will depend more uniquely on the type of conservatorship, as this arrangement can be general or be more specific to certain decisions.

Types of conservatorships

A conservatorship can take several forms to provide different levels of authority to the conservator—the court-approved type of conservatorship will dictate the scope of the conservator’s powers. 

The most common types of conservatorship arrangements include:

• Financial conservatorship – All financial affairs are placed under the conservator’s control, meaning that the ward can only access their property, money, or investments with the conservator’s approval. 
• Physical conservatorship –  The conservator will manage control over all aspects related to an individual’s health and medical needs.
• General conservatorship – The conservator is given sweeping control over all levels of the ward’s finances, physical health, and medical decisions.
• Limited conservatorship – Only some areas of the ward’s life are placed under the conservator’s control, which is common in cases of adults with mental impairments and designed to provide some autonomy to the ward.

Durations of conservatorships 

A conservatorship can also be classified by its length, as there are instances where the arrangement is only put into place for a temporary amount of time, depending on whether a person’s condition is expected to change.

The different types of durations of conservatorships include:

• Short-term – These arrangements usually only last 90 days for the sake of addressing immediate and specific needs if someone becomes unexpectedly incapacitated.
• Temporary – This will apply only under certain circumstances or for a set period, such as if a person is having a medical procedure for which they must be unconscious.
• Permanent – When the circumstances do not change, the conservatorship will likely be intended to remain in place throughout the conservatee’s lifetime. 

When is a conservatorship needed?

A conservatorship is helpful when a judge determines that an individual is unable to make decisions on their own, communicate their decisions, or understand the gravity of the decisions they make. In other words, it is needed when a person lacks mental capacity or is not of sound mind. 

A conservatorship is common in the following instances:

• Coma or mental incapacity –  A person who either physically cannot make or communicate decisions because they are unconscious or not of sound mind.
• Diseases like Alzheimer’s or dementia – Even if a person can still understand the gravity of their own decisions, the court may rule them to be mentally incapacitated because of one of these conditions.
• Risks of undue influence – A conservatorship can protect someone who is at risk of financial elder abuse from acting against their own best interests.
• A cognitive impairment – An individual with a permanent impairment may be unable to make independent decisions in their own best interests and benefit from a conservatorship.

Pros and cons of a conservatorship

It’s important to consider all of the potential advantages and disadvantages before entering into a conservatorship. 

The potential pros of a conservatorship include: 

• A conservatorship can protect an individual from being taken advantage of or making decisions that are against their own interests.
• The duration of a conservatorship can be set
• Can be either short-term or long-term to fit the needs of the ward

Meanwhile, the potential cons of conservatorship may include:

• A ward cannot overturn the arrangement without the court’s approval.
• A ward is not able to overturn specific decisions made by the conservator.
• In some cases, a conservator may take advantage of the ward.

In some cases, pros and cons are a matter of perspective based on the circumstances of a given case. An attorney may be able to help you weigh the pros and cons

What is a power of attorney? 

A power of attorney (POA) is an agreed upon legal document that grants a trusted individual the legal power to make decisions or manage affairs on behalf of another. A power of attorney is a voluntary arrangement that must be signed by two parties and notarized to be legally binding. 

The person granting the power of attorney is known as the principal or the grantor and must be of sound mind to do so. The person receiving the power to make decisions is called the agent or the attorney in fact.

Some tasks that a POA may provide an agent authority over include:

• Negotiating or signing a contract on behalf of the grantor
• Overseeing business affairs while the grantor is away or unreachable
• Managing financial transactions or investments while the grantor is unable
• Selling the grantor’s property while they are unable
• Making medical decisions about the grantor’s medical care if they become incapacitated or unconscious

It’s important to note, however, that a person with POA cannot change or override the grantor’s decisions. A power of attorney is best created before a person is expected to be incapacitated to avoid misunderstandings or power of attorney abuse.

Types of power of attorney designations

A power of attorney designation can take several forms with several different types of authorities. The type of designation depends on which areas the grantor needs their support and the grantor’s general needs and circumstances.

The most common types of POA designations are:

• Financial POA – Provides the authority to only make decisions and conduct transactions about or with the conservatee’s finances.
• Medical POA – Allows the agent to only make medical decisions that affect the grantor.
• Business POA – Allows the agent to make decisions only around the grantor’s business affairs or transactions.
• General POA – A general POA gives sweeping authority to handle decisions around all of the above affairs depending on the grantor’s needs and circumstances.

These types of designations will also fall under the umbrella of either an enduring POA or a springing POA. An enduring POA will take effect as soon as it is signed and last until it is either revoked or the grantor is no longer incapacitated. 

A springing POA will only take effect when certain conditions, specified by the grantor in the agreement, are met. For example, an agent can absorb responsibility for decision-making any time the grantor takes a trip abroad.

When is a power of attorney helpful?

A power of attorney is helpful in situations where a person is temporarily unable to make medical, financial, or legal decisions for themselves. Some cases where a power of attorney is helpful and may be used include when the grantor is: 

• Traveling abroad and unable to quickly make necessary decisions
• Undergoing a medical procedure in which they may be unconscious
• Aging and experiencing mental incapacity

Pros and cons of a power of attorney

Before designating a POA, a grantor should consider the potential advantages and potential drawbacks depending on the circumstances of a case. 

Some of the pros of a POA include:

• A POA is often set in anticipation of incapacity, providing more control to the grantor over the terms
• A ward can overturn the decisions of the POA if necessary
• The agreement is revocable as long as the ward has mental capacity

Meanwhile, some of the cons of a POA include:

• It’s often limited in the power it provides 
• There is no court oversight if incapacity continues
• The risk of abuse by the agent

What are the main differences between a conservatorship and a power of attorney?

Although a conservatorship and power of attorney are similar in concept, they have distinct differences and limitations. 

Differences in appointment

A POA is a voluntary arrangement, where the grantor and the agent can establish a contract that provides the agent the ability to make decisions on their behalf under set terms. 

However, a conservatorship is an involuntary arrangement. The court will decide whether the appointment of a conservator is necessary based on the evidence provided during a hearing. A court will make the final decision, but a conservatee can still nominate people to serve as their conservator, which is typically afforded some deference by courts.

Limitations and extent of control

In cases of both conservatorships and POA, the person often maintains the same power to make decisions as if the person themselves were there. However, each arrangement has a slightly different extent of control. 

Depending on the type of conservatorship, a conservator typically has more substantial power compared to a POA agent. A POA agent is limited in their scope of powers depending on the authority granted by the creator of the agreement.

Meanwhile, a conservatorship cannot be limited by the conservatee. The extent of control of the conservator is set by the court depending on what the court perceives to be the needs of the conservatee. The conservatee has no legal say around the scope of the conservator’s powers.

Different estate planning implications

Estate planning is a common consideration for how these arrangements impact the protected individual’s interests. A POA arrangement and a conservatorship each have different implications.

A POA agent may be able to gift assets to beneficiaries, move assets into a trust, and make other financial decisions if granted the power to do so. However, they do not typically have the authority to develop or change an estate plan such as a will or trust.

A conservator, on the other hand, can move assets into a trust and also be given the power to change an estate plan, as long as they have court approval. The conservator will need to prove to the court that this action is in the best interest of the estate.

Court intervention

With a POA, there is usually little to no need for court intervention or oversight. This would typically only be necessary in cases where a dispute arises about the POA agent’s conduct. Otherwise, the arrangement is handled simply by a contract between the two involved parties and can be initiated or terminated at any time with the permission of the grantor.

However, a conservatorship requires close involvement with the courts. The court must approve the appointment of a conservator and is the only party that can grant the termination of the agreement. The conservator must also report to the court yearly about the status of the conservatorship.

Revocability of an arrangement

A POA designation is much more easily revoked than a conservatorship. A POA can be revoked simply by the grantor putting their revocation in writing and notifying all parties that have received the initial agreement.

Revoking a conservatorship is more complex. The ward must submit a formal legal protest and attend a hearing before a judge to lay out their case. They must present to the judge that their situation has changed sufficiently to justify removing oversight by the conservator and court.

Revocability is particularly important in cases of abuse. An agent in a POA can terminate the agreement at any time if they suspect their agent is acting with misconduct. In a conservatorship, the ward or a family member must petition the court and prove the abuse in a hearing to terminate the arrangement.

How to decide on the right option

While weighing your options, you may need to consider several factors around the decision-making capabilities of the ward and the length of their condition. Consider the following factors:

• Mental capacity of the ward
• The length of time of the incapacity
• Current decision-making capacity of the ward
• The medical or financial needs of the ward

If the condition is likely to last for a limited amount of time, such as a temporary travel arrangement, then a POA may be the more fitting option. However, a long-term health issue, such as dementia or another cognitive impairment, would likely warrant a conservatorship.

Regardless, a skilled legal professional is the best resource for helping you fully understand your options and which are the most appropriate for your unique case. Consider contacting a conservatorship or guardianship attorney to learn more about which option is right for you.

Case scenario: Choosing a conservatorship over a power of attorney

The following hypothetical case scenario highlights how this situation may play out in the real world. The example may highlight potential challenges as well as possible legal mechanisms and outcomes to consider in your decisions.

Frederick is a businessman who took a week-long vacation to a foreign location for a ski trip with little signal to communicate with his business partners. Because his trip was temporary and only to last a week, he designated a financial power of attorney to make any decisions about his business while he was away. The POA allowed him to give his trusted and respected business partner authority to make any business or personal investment decisions. 

However, upon his return, he suffered an injury that affected his cognitive function and left him mentally incapacitated. Concerned about his state and his ability to make decisions regarding his business, as well as any personal affairs related to his investments and even medical decisions, the family petitioned the court to appoint a conservator. In this case, the financial power of attorney was insufficient to address all of Frederick’s needs and would not allow his best interests to be managed and cared for.

After his family presented medical records as evidence of Frederick’s incapacity, the court approved the appointment of Frederick’s wife to be a permanent, general conservator to handle important decisions and act in his best interests. This authority was granted as a lifelong appointment, unless Frederick’s circumstances change and he has the capacity to petition the court. 

This case scenario highlights the different circumstances in which a power of attorney may be more favorable and when a conservatorship may be necessary. Keep in mind that every case is unique, so it is crucial to determine how the circumstances of your situation may affect your decision. 

Get support with a conservatorship from RMO Lawyers

A conservatorship and a POA designation are two different ways to make decisions on behalf of an individual, but they apply to different cases—a POA is a voluntary agreement, where a conservatorship is assigned by the court. Seeking the support of a skilled conservatorship attorney is the best way to determine which is right for you.

Our attorneys at RMO Lawyers have extensive experience on all sides of conservatorship arrangements. Whether you feel a conservatorship is necessary or are considering raising a dispute against a conservatorship in place, we can help you explore your legal options and take appropriate action.

Schedule a consultation with our attorneys here at RMO Lawyers for support.