Guardianships and Conservatorships have applications in many contexts. One of the less common contexts is when settling a liability claim with another party. While not as common, careful review and implementation of the rules surrounding conservatorships must be followed in handling these settlements. This is especially relevant now as the rules surrounding conservatorships have substantially changed in 2020.
What is a Conservatorship?
Conservatorships are a legal proceeding in which one party is appointed to manage the financial matters of another individual. In the claim settlement scenario, this may be necessary when settling a claim with a minor or for a person whose decision-making capacity concerning their financial affairs is impaired. Depending upon the age of the individual, the reason for the conservatorship, and the amount of money involved in the settlement, different rules may apply.
A minor, defined as under the age of 21, may have a custodian for the minor paid the amount due to the minor. The aggregate amount due to the minor must be under $25,000.00. This may be done in lieu of establishing a conservatorship for the minor. This method has its own precise rules to be followed and actions to be taken in order to properly execute the transfer.
Appointing a Conservator
Temporary conservatorships were allowed in the past. However, with the 2020 legislative changes, the conservatorship appointment procedure appears to be excruciatingly uniform, even if the needs for the conservatorship are dissimilar. Appointing a conservator will generally require, among other items; an evaluation of the protected person, a bond by the conservator, and an attorney appointed for the protected person. While each of the statutes governing these items may have possible exceptions, some do not. The exceptions themselves will be fact specific and, in many cases, at the discretion of the court opening the conservatorship.
As with many changes, the 2020 changes to guardianships and conservatorships appear to be having substantial growing pains. These growing pains will likely continue as courts review and interpret these changes to the probate code, and the rules are applied to specific and unique circumstances in individual cases. Due to this, should a conservatorship become necessary in settling a claim, it is important to review with an attorney the specific facts of your situation to determine the correct path in settling the claim as well as the specific requirements that must be met in properly settling the claim.
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