Avoiding a Conservatorship

Avoiding a Conservatorship Episode 350 – Conservatorships have been in the news quite a bit over the last few years. What exactly is it, and how do you avoid having to deal with one? More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 350 Hello, this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode, what are some ways to avoid a conservatorship? Here’s a question: What do Brian Wilson, Britney Spears, Mickey Rooney, and Joni Mitchell all have in common? Each of them, at some point in their lives, was subject to a conservatorship.[1] So, what exactly is a conservatorship? It is an arrangement that grants a third party legal authority over a person’s financial and personal matters in the event of incapacity.[2] In an article for Charles Schwab, Austin Jarvis, J.D., Director of Estate Planning, explains why he believes it’s better to avoid a conservatorship when possible, and outlines some of the best ways to do so. He describes two scenarios. In the first—and generally more preferable—scenario, you get to decide who will take care of you and who will represent you if needed. You can do this with a well-thought-out estate plan.[3] A successful estate plan involves a lot of things besides wills, trusts, beneficiary designations and avoiding unnecessary taxes when you die. It also anticipates the possibility that you may become disabled or incapacitated at some point. Successful planning includes, among other things, durable powers of attorney, advance health care directives, a living will, and the appropriate appointment and designation of fiduciaries and representatives that you choose to act on your behalf, including successor fiduciaries and representatives. Setting this up ahead of time can help avoid big problems later on. In the second—and generally less preferable—scenario, a court gets to decide who will take care of you and who will represent you if you are unable to do so yourself. This can be the result when you don’t have the estate planning documents you need. This can often lead to a court-mandated conservatorship with the designation of representatives that you would not have chosen. When you become incapacitated, there are several steps that need to happen to determine if a conservatorship is needed. Typically, the first step is that the beneficiaries need to prove to the court that you are actually incapacitated. The required documentation often includes a detailed medical evaluation. Other considerations may come into play as well, such as erratic behavior, forgetfulness, incomprehension and more. Other factors are also considered, such as having been swindled in an online or romantic scam and thus shown that you are unable to handle your own affairs.[4] Britney Spears is a recent example of a prominent individual who was subject to a conservatorship, with her father being appointed as conservator. It all happened after some public incidents that made some people question her mental health and possible substance abuse.[5] After a public outcry and the so- called “Free Britney” movement, a court terminated the conservatorship.[6] If the court determines that a conservatorship is needed, there are rules governing how much oversight there will be. General oversight power means that someone else will now oversee the individual’s financial and health care decisions, as well as their personal affairs. Limited oversight power is often used for people with some “developmental disabilities.” In this case, the individual still retains some (limited) amount of autonomy. Either way, as was the case with Ms. Spears, the court appointed conservator is often a family member, since that person may already know a thing or two about the individual’s mental and physical health and financial status. While a family member sometimes serves for free, a professional conservator costs money. But whether that person is paid or not, once appointed, a conservator is considered a fiduciary. This means that they have a legal obligation to act in the best interest of the person they are representing. Note that the terms “conservatorship” and “guardianship” are often used interchangeably, but they are not the same. A conservatorship normally is applied to adults who are unable to manage their financial affairs due to their mental or physical condition. It is primarily used to manage the individual’s financial affairs, such as bill paying, investing, and handling property.[7] A guardianship is generally used for children or adults with developmental or cognitive disabilities.[8] It gives someone else authority over personal decisions, including living arrangements and health care. The rules for conservatorships and guardianships differ from state to state. But as with many things, it’s probably best to anticipate a potential problem in advance and plan ahead. A conservatorship or guardianship can be quite expensive and time-consuming, not to mention the emotional stress that often comes with it. Rather than having to face something like that, a series of well-drafted estate planning documents can prove to be invaluable. [1] Freehill, Jennifer. “9 Celebrities Who Were Trapped in a Conservatorship.” Msn.com. https://www.msn.com/en-us/entertainment/entertainment-celebrity/9-celebrities-who-were-trapped-in-a-conservatorship/ss-BB1nxRdR#image=6 (accessed September 2, 2025). [2] Jarvis, Austin. “How to Minimize the Need for a Conservatorship.” schwab.com. https://www.schwab.com/learn/story/how-to-minimize-need-conservatorship?msockid=33e8beacd6d46be53b1aa8ecd7cd6a0f (accessed September 2, 2025). [3] Id. [4] Id. [5] Erickson, Amy. “Guardianship, Conservatorship Lessons From Wendy Williams and Britney Spears.” Wealthmanagement.com. https://www.wealthmanagement.com/high-net-worth/guardianship-and-conservatorship-lessons-learned-from-wendy-williams-and-britney-spears (accessed September 2, 2025). [6] Id. [7] LegalClarity Team. “Conservatorship vs Guardianship: Key Differences Explained.” legalclarity.org. https://legalclarity.org/conservatorship-vs-guardianship-key-differences-explained/ (accessed September 2, 2025). [8] Id. More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and Twitter. Thanks for listening, and we’ll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.​ SubscribeApple PodcastsSpotifyAndroidPandoraby EmailTuneInDeezerRSSMore Subscribe Options