California Conservator vs. Agent Under Power of Attorney
In California, a conservatorship occurs when someone seeks a court case and asks a judge to appoint either an individual or organization as a “conservator.” A conservator is someone who is a responsible party and manages the affairs of a person who is deemed incapacitated, meaning that they can no longer make decisions relating to their health, safety, and welfare. In California, there are two types of conservatorships:
- A conservator of the person, who is responsible for making decisions relating to health care, housing, health, and safety of an incapacitated person, and/or;
- A conservator of the estate, who is responsible for managing an incapacitated person’s financial affairs, including paying bills and collecting income.
There is also a special type of conservatorships related to mental health rather than incapacity. These are called mental health conservatorships, in which the court appoints a conservator for a mentally ill adult. The adult must be gravely disabled from a mental illness, such as schizophrenia and/or bipolar disorder. These conservatorships only last for one year. If there is a need to continue on beyond a year, then the court proceedings have to be restarted and the conservator has to be re-appointed.
Since a conservator is appointed by the court, they have specific duties and obligations. A conservator has to arrange for the incapacitated person’s care and protection and/or their finances. (Want to learn more about a conservator’s obligations? See: Duties in a Conservatorship).
A Power of Attorney, sometimes referred to as a POA, names someone to have the authority to handle legal, financial, or medical matters for you under certain circumstances. This is one alternative to a conservatorship in California.
The creator of a POA is called the principal. The principal has to be at least 18 years old and have the legal capacity to enter into a contract. The person acting on their behalf is called an agent or sometimes attorney-in-fact. In California, there are three different types of POAS:
- The General Power of Attorney. This document is the broadest type of POA and allows an agent to handle a variety of financial matters. This can include: handling real estate, managing and/or paying bills. This document must be signed by the principal / creator, a notary, and two witnesses.
- The Limited Power of Attorney. This document is narrower and gives the agent the authority to act in specific circumstances as listed in the documents. For example, if the principal is going to be unavailable but is attempting to sell their house, the principal could nominate an agent under this Limited Power of Attorney to handle the sale of their home. This type of POA is only effected for the specific purposes as listed in the document itself. It also requires a signature by the principal, a notary, and two witnesses.
- Finally, the Healthcare Power of Attorney, which is sometimes called an “Advance Health Care Directive” or “Advance Directive.” This document is specific to an agent making medical decisions on behalf of an incapacitated principal. For example, if a principal is going to have a medical procedure, they can execute a Healthcare POA and nominate their agent to assist in making medical decisions on their behalf.
An agent has fiduciary duties and obligations to the principal. Specifically, under California law, the agent must act solely in the interest of the principal and avoid any potential conflicts of interest. This means that the agent must keep the principal’s property separate from his or her own property and cannot make decisions that would benefit himself or herself over the benefit of the principal. If an agent fails to keep his or her actions in the sole interest of the principal, the agent can be sued for breaching their fiduciary obligations.
Know someone who may be looking for a Power of Attorney or Conservatorship? Do you have questions about a Power of Attorney or Conservatorship? Please contact our office at (951) 226-5294.
This is the first of three posts regarding Conservatorships. Check back next week for more information.
