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How to Plan for Estate Management During Incapacity: Conservatorship vs. Durable Power of Attorney

Posted by Mark Ruiz | Oct 28, 2024 | 0 Comments

As a California estate planning attorney, one of the most important discussions I have with clients involves planning for the possibility of future incapacity. It's not the easiest topic to talk about, but it's an essential part of ensuring your affairs are handled according to your wishes if you're unable to manage them yourself. Two common tools for this are Conservatorship and Durable Power of Attorney (DPOA). Let's take a closer look at each and why understanding the difference could save you and your family a lot of time, stress, and money.

What is Conservatorship?
In simple terms, a conservatorship is a legal arrangement where a court appoints someone (a "conservator") to manage the personal and/or financial affairs of an individual (the "conservatee") who can no longer make decisions for themselves. While it can be an effective solution, conservatorships have a few downsides:

  1. Court Involvement: Since the process is overseen by the court, setting up a conservatorship can be lengthy, costly, and involves a lot of paperwork.
  2. Public Record: Proceedings are generally public, which means personal details of the conservatee's finances and health may be disclosed.
  3. Limited Flexibility: Because of court oversight, making decisions can be a slow process. Each major action may require approval from the court, which can be frustrating in urgent situations.

In short, a conservatorship is sometimes necessary, especially if no prior estate planning was done. But it's often seen as a last resort, especially given the emotional and financial toll it can take.

The Durable Power of Attorney (DPOA) – A Better Alternative?
If you want to avoid the hassle and uncertainty of a conservatorship, consider a Durable Power of Attorney. A DPOA allows you (the "principal") to appoint someone you trust (the "agent") to make financial and/or healthcare decisions on your behalf if you're unable to do so. Unlike conservatorship, a DPOA does not require court involvement once it's been executed. Here's why many of my clients prefer this option:

  1. Private and Convenient: Unlike a conservatorship, a DPOA doesn't involve public proceedings. You can decide who you want to manage your affairs without the court or the public looking over your shoulder.
  2. Quick and Flexible: Because your agent doesn't have to seek court approval for most actions, they can make decisions quickly and effectively when the situation calls for it.
  3. Control and Peace of Mind: With a DPOA, you decide in advance who you want handling your finances or healthcare if you're incapacitated. You can specify exactly what powers they have, so there's no ambiguity.

Choosing the Right Tool for You
Ultimately, the decision between a conservatorship and a DPOA comes down to your situation and preferences. If you haven't put a DPOA in place and become incapacitated, your loved ones may be forced to seek a conservatorship, which is why I encourage everyone to consider setting up a DPOA as part of their estate planning. It's a relatively simple, affordable step you can take now to avoid potential headaches down the road.

A word of caution: Make sure your DPOA document is up-to-date. I often meet with clients who set up their DPOA years ago and haven't looked at it since. Circumstances change, and so should your estate planning documents. Review them regularly, and if you've had major life changes (like marriage, divorce, or a change in health), it's time for an update.

LEGAL DISCLAIMER
This article is intended for general information purposes only. Any legal analysis or other content should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information. If you require legal or professional advice, please contact an attorney or other suitable professional advisor. The choice of an attorney or other professional is an important decision and should not be based solely upon advertisements and blog postings.

 

About the Author

Mark Ruiz

Mark A. Ruiz Attorney/Owner Mark  primarily focuses on Business Law, Real Estate Law and Estate Planning.  He holds a Bachelors Degree from Santa Clara University with an emphasis in Business/Marketing and a Law Degree from the University of San Francisco with a Business Law Certificate.  He ...

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