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Dec 2016
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December 22, 2016

Disability Planning: Where Do Conservators and Guardians Fit In?


Life is uncertain. Anyone could have an unexpected experience that interferes with one’s mental abilities. Common examples include mental illness, such as dementia or schizophrenia, brain injury and serious physical illness. If you become unable to make your own decisions and manage your own affairs, temporarily or permanently, then you will need somebody to make decisions and manage affairs for you.

“Disability planning” is taking steps, before the need arises, to designate somebody to make decisions and manage affairs for you in the event of your disability. Commonly, a person who engages in disability planning will sign a durable power of attorney (naming an agent to manage property and finances in the event of disability) and a patient advocate designation or medical durable power of attorney (naming an agent to make medical and health decisions in the event of disability). Let’s call these people your “decision-makers.”

Not everyone engages in disability planning, however. Without planning, there will be no one authorized to make decisions for you when the need arises. In that case, your loved ones would have to petition the probate court to appoint someone to make decisions and manage affairs for you. The probate court may be asked to appoint:
 
  1. A “conservator” to manage your property and finances; and/or
  2. A “guardian” to make medical, health and residency decisions for you.

In order to appoint a conservator, the probate court must find that you are both:
 
  1. Impaired — “Unable to manage property and business affairs effectively for reasons such as mental illness, mental deficiency, physical illness or disability, chronic use of drugs [or] chronic intoxication;” and 
  2. You have property “that will be wasted or dissipated unless proper management is provided[.]” MCL 700.5401(3).

The probate court will appoint a guardian if it finds that you are “impaired by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication or other cause” so that you lack “sufficient understanding or capacity to make or communicate informed decisions.” MCL 700.1105(a).

Planning is preferable to not planning. Without planning, you are burdening your loved ones with the task of going to court to deal with your mental incapacity, during what is likely to be a stressful time. The court proceedings to appoint a decision-maker for you are generally public, so there is some loss of privacy as well. Most importantly, your family members may not agree on who should serve as your conservator and/or guardian. Son Denny might ask the court to appoint him to those roles, but son Tom might strenuously object and ask the court to appoint him instead. Disagreement over who should serve may trigger a lawsuit. Sometimes those lawsuits are lengthy, time-consuming and expensive, to say nothing of the effect they have on family relationships.

If a conservator and/or guardian is appointed for you, then those decision-makers serve under ongoing court oversight. The decision-makers have full authority over your affairs, unless the court finds that you retain some abilities and leaves some matters under your control. A conservator must initially file an inventory of assets under management. Annually, the conservator must file an accounting of how your assets have been managed. A guardian must file an annual report on your condition and circumstances. Your immediate family members are entitled to receive copies of those documents.

If you engage in disability planning, does that mean that there is no possibility of a conservator or guardian ever being appointed for you? Not necessarily. Your chosen decision-makers could fail to act; they could make decisions that are not in your best interest; or they could manage your property to improperly benefit themselves. Family members have the right to seek probate court appointment of a conservator and/or guardian to replace your chosen decision-makers if necessary to protect your interests. You should take comfort from the court’s availability to protect you and your interests from problems with your decision-makers — even if such problems are unlikely and unexpected. Remember how this article began: Life is uncertain.
  • A conservator is appointed by the probate court to manage a disabled person’s property and finances.
  • A conservator is needed for a person who failed to sign a durable power of attorney, prior to the disability.
  • A guardian is appointed by the probate court to make medical, health and residency decisions for a disabled person.
  • A guardian is needed for a person who failed to sign a patient advocate designation, prior to the disability.
  • Engaging in disability planning may avoid the need for appointment of a conservator and/or guardian.

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