Conservators of Adults
In the United States, all adults are considered capable of handling their own affairs unless a Judge determines otherwise. In California, this legal arrangement is called a conservatorship.
Conservatorships are established for impaired adults, most often older people. Adults who are developmentally disabled or the victims of a catastrophic illness or accident also may have a conservatorship.
Establishing a conservatorship is a formal legal proceeding and involves several steps. Some adults who are concerned about possible future mental and physical incapacity decide to establish a power of attorney or a trust, in part so they can avoid the court action. They choose an individual or an institution to make decisions for them if they become impaired. These are private arrangements and must be made while the person has full mental capacity. In California, courts do not routinely monitor powers of attorney or trusts. Most people do not make these arrangements probably because it is difficult to think about becoming incapacitated mentally or physically. But it happens, especially to people over 75 years of age. For those who have not made prior arrangements, or if the person handling the power of attorney or trust is incapable or dishonest, a conservatorship may become necessary.
Wills and Decedents’ Estates
When people die, their assets including personal belongings, bank accounts, stocks, and real estate need to be safeguarded and managed. Bills need to be paid. Because of the grief process and the effects on families when there is a death, it can be difficult to deal with the business of settling the deceased person’s affairs.
The process can be simple or complex depending on such factors as the size and nature of the deceased person’s assets, whether assets are hard to locate, and whether the survivors can cooperate with one another. California law permits estates under $150,000 to be settled outside of the formal Probate Court process. Estates that exceed $150,000, and sometimes smaller estates for various reasons, are handled by the Probate Department.
Trusts
A trust is a legal arrangement where someone, called a trustee, holds property for the benefit of someone else, called a beneficiary. The person who places his or her assets into the trust is called the trustor or settlor. The trust can be part of a decedent’s will if the will provides that all or part of the estate is to be distributed to a trustee with directions to use the trust in specific ways.
Kinds of Trusts
There are various kinds of trusts, including testamentary, special needs, and living. A trust that is part of a will is called a testamentary trust. Another kind of trust is called a special needs trust which is set up to assist a disabled person who is receiving public benefits. A special needs trust can be part of a decedent’s will or can be created in other ways by court order. Perhaps the most common trust is the living trust. Settlors of living trusts put their property into the trust during their lifetime, with provisions for use of the property during their lifetime and after they die. A living trust can be a useful tool for managing assets during a person’s lifetime and for distribution of assets without a probate proceeding when a person dies.