February 17, 2005

Devries Column

Basic duties of a conservator of the estate
(Part 2 of 2)

In the Jan. 28-Feb. 3, 2005 issue of The Almaden Times Weekly, I outlined the basic duties of a conservator of the person, an individual appointed by the court to assist someone in need of such a person. This article was entitled Part 1 of 2. The following are the basic duties and responsibilities of a conservator of the estate, again as stated on the current version of court form #GC-348.

Conservator of the estate
If the court appoints you as conservator of the estate, you will manage the conservatee’s finances, protect the conservatee’s income and assets, make an inventory of the conservatorship estate assets, develop a working plan to ensure that the conservatee’s needs are met, make sure the conservatee’s bills are paid, invest the conservatee’s money, see that the conservatee is receiving all the income and benefits he or she is entitled to, ensure that tax returns are filed on time, keep accurate financial records, and regularly report your financial accounts to the court. (Note: The assets and finances of the conservatee are known as “the estate.”)

Managing the estate’s assets
a. Prudent investments. You must manage the estate assets with the care of a prudent person dealing with someone else’s property. This means you must be cautious and you may not make any speculative investments.

b. Keep estate assets separate from anyone else’s. You must keep the money and property in this estate separate from anyone else’s, including your own. When you open a bank account for the estate, the account name must indicate that it is a conservatorship account and not your personal account. Never deposit estate funds in your personal account or otherwise mix them with your or anyone else’s property, even for brief periods. Securities in the estate must be held in a name that shows they are estate property and not your personal property.

c. Interest-bearing accounts and other investments. Except for checking accounts intended for ordinary administration expenses, estate accounts must earn interest. You may deposit estate funds in insured accounts in financial institutions, but you should not put more than $100,000 in one institution. Consult with an attorney before making other kinds of investments.

d. Other restrictions. There are many other restrictions on your authority to deal with estate assets. Without prior order of the court, you may not pay fees to yourself or to your attorney, make a gift of estate assets, or borrow from the estate. If you do not obtain the court’s permission when it is required, you may be removed as conservator or you may be required to reimburse the estate from your own personal funds, or both. You should consult with an attorney concerning the legal requirements affecting sales, leases, mortgages, and investments of estate property.

Inventory of estate property
a. Locate the estate’s property. You must locate, take possession of, and protect all of the conservatee’s income and assets that will be administered in the estate. You should change the ownership of most assets of the conservatorship into the conservatorship estate’s name. For real estate, you must record a copy of your Letters of Conservatorship with the county recorder in each county where the conservatee owns real property.

b. Determine the value of the property. You must arrange to have a court-appointed referee determine the value of the property unless the appointment is waived by the court. You, rather than the referee, must determine the value of certain “cash items.” An attorney can advise you about how to do this.

c. File an inventory and appraisal. Within 90 days after your appointment as conservator, you must file with the court an inventory and appraisal of all the assets in the estate.

Insurance
You should determine that there is appropriate and adequate insurance covering the assets and risks of the estate. Maintain the insurance in force during the entire period of the administration (except for assets after they are sold).

Record keeping
a. Keep an accounting. You must keep complete and accurate records of each financial transaction affecting the estate. The checkbook for the conservatorship checking account is your indispensable tool for keeping records of income and expenditures. You will have to prepare an accounting of all money and property you have received, what you have spent, the date of each transaction, and its purpose. You must describe in detail what you have left after you pay the estate’s expenses.

b. Court review of your records. You must file a petition requesting that the court review and approve your accounting one year after your appointment and at least every two years after that. Save your receipts because the court may ask you to review them also. If you do not file your accountings as required, the court will order you to do so. You may be removed as conservator if you fail to comply.

Consulting an attorney
Your attorney will advise you and help prepare your inventories, accountings, and petitions to the court. If you have questions, check with your attorney, not the court staff. You should cooperate with your attorney at all times.

When in doubt, contact your attorney.

Duty to disclose.

If you are the spouse of the conservatee, you must disclose to the court the filing of any action or proceeding against the conservatee for (1) legal separation, (2) dissolution of marriage, (3) annulment, or (4) adjudication of nullity of marriage. The disclosure must be made within 10 days of the initial filing of the action or proceeding by filing a notice with the court and serving notice according the Probate Code.

Temporary conservator
If the court appoints you as temporary conservator, you will generally have the same duties and authority as general conservators except the conservatorship will end on the date specified in your Letters of Temporary Conservatorship. Most of the information in this form also applies to temporary conservatorships, but you must consult your attorney about which duties you will not perform because of the limited time. A temporary conservator should avoid making long-term decisions or changes that could safely wait until a general conservator is appointed. As temporary conservator, you may not move a conservatee from his or her home or sell or give away the conservatee’s home or any other assets without court approval.

There you have it, the basic duties of a conservator of the person and conservator of the estate, as stated on the current version of Court Form #GC 348. Again, as always, please consult with your own attorney for more specific help on any particular issue pertaining to your own situation. Only he or she can offer sound legal advice to you.

Donald J. DeVries
Almaden Valley

Donald J. DeVries is an attorney practicing law in Almaden Valley. If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com, fax at (408)268-6502, telephone at (408) 268-9500, or mail at, 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation. Visit his Web site at www.almadenvalleylawyers.com to view Almaden Times columns since 1986. DeVries writes this column to provide you with general information about important legal matters affecting California residents—not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.