Our San Jose Trust Lawyers Can Help You Avoid Conservatorship of Your Person and Estate
The California Probate Code provides for two distinct types of conservatorship in California. A conservatorship may be imposed by the Probate Court on either the person, the estate of the person, or upon both the person and the estate. Probate Code §1801(a) provides in part that a conservator of the person “may be appointed for a person who is unable to provide properly for his or her personal needs for physical health, food, clothing, or shelter …” Such a conservatorship of the person is appropriate where the individual, due to a multitude of possible medical reasons, can no longer take care of him or herself sufficiently to meet such basic needs as nutrition, hygiene, and shelter. Probate Code §1801(b), on the other hand provides the standard for determining when a conservatorship of one’s estate should be imposed.
Nevertheless, a conservatorship of one’s person may largely be avoided through the use of a carefully drafted Advance Health Care Directive. And a conservatorship of one’s estate can be made almost entirely unnecessary through a well drafted living trust coupled with a durable power of attorney for financial management.
Avoiding a Conservatorship of the Person
A conservatorship of the person may be avoided in practically all situations by granting to a trusted agent (and alternate agents) the authority to make personal care decisions on one’s behalf in an Advance Health Care Directive. In the event one loses the ability to make such decisions for herself, Probate Code §§4123(c) and 4671(b) provide that a person can grant the authority, for example, to determine where she will live, to arrange for her meals, recreation and entertainment, transportation, and to hire household employees. Hence, an Advance Health Care Directive is the most appropriate tool in a comprehensive estate plan for avoiding the conservatorship of one’s person. In the event that a conservatorship of one’s person does become necessary or desirable, one can also nominate potential conservators in one’s California revocable living trust. However, one cannot appoint such conservators. Only the Probate Court has that power. However, one’s own nomination does carry a great deal of weight. In fact, if a conservatorship is petitioned, the code provides that the court “shall appoint the nominee as conservator unless the court finds that the appointment of the nominee is not in the best interests of the proposed conservatee” (Probate Code section 1810). In other words, the court must show a great deal of deference to one’s wishes expressed in writing as to nominating one’s own potential conservator. However, the court still has the final say. This is true for either a conservatorship of the person or of the estate.Therefore, in addition to specifically granting the authority to make personal care decisions in an Advance Health Care Directive to one’s chosen agent, nominating one or more trusted individuals as potential conservators of one’s own person in the event one becomes permanently incapable of providing for my own physical well-being is a very good idea. While a California living trust cannot prevent the need for a conservatorship over my person, it is an excellent place for me to express in writing, my preferences as to who might be appointed by the court to act as my conservator in the event a conservatorship might become inevitable.
Avoiding California Conservatorship of the Estate with a Living Trust
How then can a California revocable living trust “avoid conservatorship?” Well, to be more precise, a California living trust can help avoid a conservatorship of one’s estate, by removing the need to petition for such a conservatorship in the first place. Consider that a conservatorship of one’s estate may be imposed under California Probate Code section 1801(b), when a person is “substantially unable to manage his or her own financial resources or resist fraud or undue influence …”A revocable living trust in California can potentially completely avoid a conservatorship of the estate of an individual by naming successor trustees to manage the trust estate for the benefit of an incapacitated settlor trustee. That is to say, a trust can define certain triggering events that will cause the job of trustee to transfer from the original settlor to a successor. The most obvious such triggering event is, of course, death, whereupon a named successor trustee will administer the decedent’s trust estate for the benefit of the named beneficiaries who will receive distributions at the settlor’s death. But a living trust can also provide for the removal of a living settlor trustee due to the settlor’s incapacity. By carefully defining how a settlor might be removed as trustee, who may have the authority to do so, and on what basis a settlor might be removed, the trust can take back control over the very same issues involved in a petition for a conservatorship of one’s estate, and avoid the involvement of the Probate Court in the process. For example, in the common context of the individual who, due to a modest level of dementia, can no longer manage her financial affairs and resist fraud or undue influence by third parties, but who is perfectly capable of caring for her own physical needs of nutrition and hygiene, for example, the trust can provide for her removal as trustee of her living trust and the succession to the next in line.
Removal of a settlor trustee might be drafted to be relatively simple. For example, by naming three or five very close, trusted family members or friends and giving them the authority by majority vote and signing of declarations that they believe the settlor has lost the ability to manage his or her estate. Alternatively, one might draft this provision to require some medical expertise to come into the decision, as by requiring two physicians to sign declarations that they believe the settlor has irretrievably lost certain mental faculties. Of course, the more rigid the requirements imposed to remove a settlor, the less likely the provision will have its intended effect of avoiding a court imposed conservatorship of the estate, since it might actually be easier to petition the court to impose a conservatorship than to obtain the signatures of two physicians as to such a sensitive matter.
The bottom line here is that by carefully describing how and under what circumstances a settlor may be removed as trustee of one’s own trust, one can regain significant control over one’s destiny. A conservatorship of the estate can be made wholly unnecessary if one’s estate is held in a living trust and that trust instrument itself already describes how it will be managed in the event the original settlor loses the requisite mental capacity to manage it.
By placing your assets into a Revocable Living Trust, and naming the persons of your own choice who would take over the management of your trust in the event you become incapacitated, you can generally avoid the imposition of a conservatorship to manage your finances. Not only can you choose who would care for you and your assets, as successor trustee of your trust, but you can also define who gets to decide if you are incapacitated and under what circumstances. By retaining the experienced San Jose estate planning attorneys at the Law Offices of Jon G. Brooks, and planning ahead, you can take this process out of the probate court by using a revocable living trust.