Conservatorship in Arizona

Introduction

In Arizona, a person judicially appointed to manage the financial affairs of another person is called a “Conservator.”

The legal proceeding is called a “Conservatorship.” Conservatorships are governed by the provisions of A.R.S. §14-5401 and the statutes that follow it.

The person whose financial affairs are managed is called the “Protected Person,” sometimes also known as the “Ward.”

An individual, or a corporation with general power to serve as a trustee, may be appointed Conservator for a protected person. Generally, there is an order of priority for those who may be considered by the court for appointment. The establishment of a Conservatorship restricts the protected person’s powers over financial decisions.

Basis for Appointment

A Conservator may be appointed for a minor if the court determines that a minor owns money or property that requires management or protection which cannot otherwise be provided or has or may have affairs which may be jeopardized or prevented by his minority or that funds are needed for his support and education and that protection is necessary or desirable to obtain or provide funds.

A Conservator may be appointed for an adult if the court finds that the person to be protected:

is unable to manage the person’s estate and affairs effectively for reasons such as mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power or disappearance.; or

has property which will be wasted or dissipated unless proper management is provided, or that funds are needed for the support, care and welfare of the person or those entitled to be supported by the person and that protection is necessary or desirable to obtain or provide funds.

Difference Between Guardianship and Conservatorship

While a guardianship is a proceeding to appoint a person to take care of another person and handle his or her personal affairs, a Conservatorship is a court proceeding to appoint an individual (or a corporation with trustee powers), to manage the financial affairs of a minor or other person who can no longer manage his or her own property or financial matters. Generally, the Conservator does not make decisions about the personal care of the individual. However, a Conservator may assume the duties of a guardian if appointed Conservator of the estate of an unmarried minor, where no one has parental rights, and no guardian has been appointed.

The Appointment Process

A Conservator is appointed by filing a petition for the appointment of a Conservator with the court. The petition may be filed by the person to be protected, any person interested in the estate, affairs or welfare of the protected person such as a parent or guardian, or any person adversely affected by improper management of the property and affairs of the protected person.

Notice of the time and place of the proceeding is given to the person to be protected, the spouse, or if none, the parents of the protected person. The person to be protected is entitled to be present at the hearing. The proposed protected person is entitled to have a jury decide the matter, rather than a judge, if he or she so desires.

If an emergency exists, a Conservator can be appointed quickly, with short notice to the involved parties. If the Court is satisfied that it is necessary for the best interests of the protected person, a Conservator may be appointed with no notice at all. The emergency appointment must be limited to a relatively short time, and must be followed by notice to the protected person and an opportunity to be heard after the appointment. The emergency appointment must also be followed by a regular application for appointment of a Conservator.

Because a Conservatorship is a court supervised proceeding, there may be substantial costs in establishing it, such as court filing fees, legal fees, investigator’s fees and Conservator’s fees. A Conservatorship is a public proceeding and the protected person’s assets, income and expenses become a matter of public record.

The Conservatorship may be a cumbersome method of managing a person’s financial affairs, since the Conservator must return to court for approval of certain transactions, such as the sale of real property, borrowing money, setting up a trust, etc. These formal court hearings require additional attorney’s fees and create delays in completing these transactions.

Rights Protected

The person to be protected must be represented by counsel, either the person’s own counsel or counsel appointed by the court. The court must also appoint a physician to examine the proposed protected person. In addition, a “visitor” is appointed to interview the proposed protected persons and to submit a report to the court before the hearing. The visitor reports back to the court with an opinion on whether or not the appointment of a Conservator is justified.

Duties of the Conservator

Within ninety (90) days of appointment, the Conservator must file an inventory of the estate of the protected person with the court. Annually, on the date of appointment, the Conservator must file an accounting of the administration of the estate with the court. A Conservator has the powers and responsibilities of a fiduciary and is held to the standard of care applicable to a trustee, that of a prudent person dealing with property of another.

The Conservator has the power to collect all the protected person’s assets, pay bills, make investments, etc. A Conservator has power to invest funds of the estate and to distribute money reasonably necessary for the health, support, care, education, welfare or benefit of the protected person, those legally dependent on the protected person, or those members of the protected person’s household who are unable to support themselves. The Conservator must pay from the estate all of the just and proper claims against the estate and against the protected person. The Conservator must seek court supervision for major transactions, such as the purchase or sale of real property, borrowing money or making gifts of assets.

Termination

A Conservatorship terminates upon the death of the protected person, upon a court determination that the minority or disability of the protected person has terminated, or upon the removal or resignation of the Conservator. Upon termination, title to the assets passes to the former protected person, or if he or she is deceased, then as provided by the protected person’s Will or by law if there is no Will. The Conservator winds up the affairs of the estate, including the preparation and court approval of the final accounting.