While educating yourself on estate law in Colorado to help your aging parents with estate planning, you learn about conservatorship and guardianship. Do you understand how the two relate to estate planning and administration?
The Motley Fool breaks down the financial- and health-related aspects of the two roles. Help your parents by helping yourself to a well-rounded estate planning education.
A conservatorship gives a designated individual, known as a conservator, the right to make financial decisions for a mentally or physically compromised person. The conservator handles assets such as investments and bank accounts, and the individual tends to common financial obligations such as gathering debts and tending to outstanding bills.
With guardianship, the designated person has the authority to make medical and personal decisions for an individual a court deems physically or mentally compromised. Specific decisions that fall on a guardian’s shoulders include those related to housing, healthcare treatment and general safety.
Designating a conservator or guardian
Your mother and father may create a durable power of attorney, living will or medical power of attorney to name their conservator or guardian. Even then, their chosen person must have the mental capacity and ability to fulfill the role. Your parents may list the same person to serve both roles, but the court may protect your mother’s and father’s interests by dividing the roles between two or more people. Should your mother and father require two guardians or two conservators, the designated individuals divide decision-making power.
Older adults deserve proper care and peace of mind, no matter their mental or physical state. Share your insights on conservatorship and guardianship with them.