A conservatorship checking account can be a useful tool. It’s part of the legal arrangement for helping people who are unable to manage their own financial affairs. It can also give peace of mind to family members and loved ones who may be concerned about the person’s ability to handle their finances. But what is a conservatorship checking account, and how can you use one?
In this article, we’ll discuss conservatorship checking accounts in detail. You’ll learn if you or anyone you know need one, what the benefits are to having one, and more.
About Conservatorships of the Estate
A conservator of the estate is one of two main types of conservator. Because this is the type of conservator who manages a conservatorship checking account, we’ll briefly go over this here before delving into the specifics.
A conservator of the estate, or a financial conservator, is responsible for taking care of the finances of someone who is no longer up to the job. This can involve managing a financial account, keeping accurate records of all incomes, and making sure that the account holder’s bills are paid, for example.
A conservator of the estate has a big job. They have access to the account holder’s bank account and real estate. They can write checks on their behalf and set up direct deposits for the account holder’s income, such as Social Security or disability payments. They further keep estate funds in interest-bearing accounts to responsibly grow the conservatee’s assets.
The conservator is responsible for making sure that the account holder has enough money to cover their basic needs, such as food, shelter, and clothing. They can also use the account to pay for other expenses, such as medical bills or recreation.
To prevent conservatorship abuse, the conservator is required to keep records of all transactions made from the account. They must also report any changes in the account holder’s financial situation to the court.
Rules of Financial Conservatorship
The courts grant personal or professional conservators many legal privileges that nullify an incapacitated person’s civil rights. However, there are legislative restraints in place to stop conservators from abusing their position.
The conservator has a great deal of responsibility when it comes to running a conservatorship of the estate and managing a conservatorship checking account. They have to make sure that the account is used for its intended purpose and that the individual’s bills are paid on time. If the conservator misuses the account or does not pay the bills, they can be held legally and financially liable as the decision maker.
Here are some important rules to take note of when managing someone’s personal property in a conservatorship:
- A conservator cannot increase the incapacitated adult’s assets with their own. They should keep the incapacitated person’s estate assets separate from their own (such as in a conservatorship checking account).
- A conservator cannot use the conservatorship bank account to lend money to themselves or others.
- A conservator is not permitted to make any rash or dangerous investments with a conservatee’s assets.
- Without the court’s permission, a conservator cannot pay for legal services or their own expenses out of the conservatorship bank account.
What Is a Conservatorship Checking Account?
A conservatorship checking account is a type of account set up for use in the conservatorship of the estate. It is meant to help manage the financial affairs of someone unable to do so themselves.
A conservatorship checking account is set up by court order after a legal proceeding establishing a conservatorship. Once a judge has appointed you to be the conservator of the account holder, for instance, you can set up this account and pay the deposit costs.
If you’re looking into setting up a conservatorship to manage a loved one’s financial and business affairs, this may be you soon. This type of conservator is responsible for managing the conservatorship account, including keeping financial records and making sure that the individual’s bills are paid on time. The conservator has a fiduciary responsibility to the individual, which means they must act in the individual’s best interests.
There are a few different varieties of conservatorship checking accounts depending on the categories of expense:
- A traditional checking account, which can be used for any purpose
- A restricted account, which can only be used for certain everyday expenses, such as housing, food, and medical bills
- A Medicaid spend-down account is used to pay for long-term payment of expenses not covered by Medicaid.
The Benefits of a Conservatorship Checking Account
There are several benefits to having a conservatorship checking account. Here are the top four you may want to consider
1. Shield the Individual’s Conservatorship Assets from the Protected Person
The conservator ensures that the money is used in a way that is in the best interest of the individual. If the conservatee has poor judgment, an account controlled by a financial conservator can prevent the individual from spending their money on unnecessary or harmful things.
2. Make Sure the Individual’s Bills are Paid On Time
The conservator is responsible for paying the individual’s bills from the account. This can help to prevent the conserved person from falling behind on their bills and incurring late fees or other penalties.
3. Provides the Individual with a Sense of Independence
Even though the conservator is responsible for managing the account, the individual still has a say in how their money is spent. The disabled person’s name is also still on the account. This can help to give the individual a sense of control over their finances and their life.
4. Protect the Conservator
The conservator is responsible for making sure that the individual’s money is safe and secure as well as providing exact records to the court. A conservatorship checking account keeps everything in one place, making this job much easier and warding off accusations of conservatorship abuse.
As you can see, a conservatorship checking account can be a great option for those who have difficulty managing their finances. It can help to protect the individual’s assets, make sure that their bills are paid on time, and give them a sense of independence, control, and security.
Different Types of Conservatorship Checking Accounts
There are a few different types of conservatorship accounts with different legal designations. Here’s a quick description of some of them.
Limited conservatorship account: This type of account allows the conservator to have access to the account holder’s money, but there are restrictions on how the money can be used. The conservator can only use the money for specific purposes that are approved by the probate court (like paying bills for the conservatee). They must keep records of all transactions.
Full conservatorship account: This type of account gives the conservator more control over finances. The conservator can use the money for any purpose that is in the best interests of the account holder, and they are not required to keep records of transactions and copies of bank statements. However, they still can’t use the funds for personal gain, which would be considered conservatorship abuse.
Sensitively Setting up a Conservatorship Checking Account
There are several potential drawbacks to having a conservatorship checking account, especially if the conservatorship of the estate is a standalone conservatorship and the conservatee is still pretty lucid and can make personal decisions themselves. If you’re a conservator of the estate, keep in mind that some of these issues may arise as you take control of the individual in question’s account.
- Someone accustomed to independence may feel like they have lost control over their personal finances. This can be a difficult adjustment to make and can lead to feelings of frustration or helplessness.
- The conservator may not have the same financial goals or priorities as the account holder. This can lead to disagreements about the amounts of money to be spent, which can be stressful for both parties.
- The conservator may place restrictions on withdrawals or transfers, which can make it difficult for the conservatee to access extra money for necessary expenses.
- The conservator may be able to close the account at any time, which could leave the account holder without access to their funds.
Additionally, there is sometimes a financial drawback to a conservatorship checking account. There are sometimes conservatorship costs and fees associated with having a business checking conservatorship account. The account may be subject to additional fees, such as account maintenance fees. This can add up over time and may be a significant expense for the account holder.
Even with the drawbacks, a conservatorship checking account is normally a good idea for conservatorships of the estate. It provides convenience and transparency for the arrangement, protecting both the conservatee and the conservator.
Create a Conservatorship Checking Account with A People’s Choice
A People’s Choice is a California-based provider of legal document services. We don’t simply provide you blank templates to fill out; we help you ensure your forms are filled out completely and accurately. You are in good hands since a People’s Choice is made up of a number of professionals familiar with the conservatorship procedure.
We offer trustworthy services at reasonable prices, and we can help you fill out all the paperwork you need to set up a conservatorship as well as a conservatorship checking account. If you have a loved one who needs assistance with financial decisions, start by filling out a short questionnaire. Do it right; do it with A People’s Choice.