In Virginia, a conservator is a person appointed to manage the estate or financial affairs of an incapacitated adult, also known as a ward. When you agree to serve as a conservator, you enter into a fiduciary relationship with the ward. As a fiduciary, you must always act in the ward’s best interest and you can be held personally liable if you are negligent in performing your duties.
What does a conservator actually do? The conservator manages the ward’s income, money, and property. The conservator may also need to coordinate with the ward’s guardian, who is the fiduciary that makes personal decisions such as where the ward lives or the medical care the ward receives, if the conservator is not also serving as guardian. The court order appointing you as conservator will typically spell out your powers and duties and may limit your powers and duties as well. As a general guide, following are some of a conservator’s ongoing powers and duties:
● Signing legal documents, such as contracts, on behalf of the ward, making sure to indicate that you are doing so in a fiduciary capacity and not personally;
● Paying the ward’s bills and other legal obligations from the ward’s income first, then from their other property if the income is insufficient;
● Filing federal and state tax returns;
● Borrowing money on the ward’s behalf; and
● Maintaining appropriate insurance for the ward, including healthcare, property, and life insurance.
Documenting and Reporting Your Activities
As conservator you must keep detailed records of your conservator activities. Failure to do so can result in your personal financial liability or even your removal and replacement as conservator. A conservatorship is subject to the supervision by your assigned Commissioner of Accounts (COA)whose role is to ensure that conservators and all other court-appointed fiduciaries are fulfilling their legal responsibilities.
Shortly after your appointment as conservator, you must prepare and file an inventory of all of the ward’s assets under your supervision and control with your assigned COA. Thereafter, you will file an initial detailed accounting of all financial actions you undertook as conservator, complete with supporting documentation; after the initial accounting is reviewed and approved, you will file annual accounting with your COA showing all of the money coming into–and going out of–the conservatorship plus the status of remaining assets and their value. Your duty to account lasts until the ward has died (after which you need to file a final accounting), is restored to capacity, or you are no longer serving as conservator and have filed a final accounting. As conservator, you will generally be required to get the COA’s prior approval and follow a specific process to sell the ward’s real estate.
Keeping Conservatorship Assets Separate
Perhaps the most important duty you have as a conservator is to keep the conservatorship assets separate and apart from your own property. When you sign a contract as a conservator, for example, you should always indicate that you are signing in your conservator capacity and not individually. You should also legally re-title all of the ward’s assets to reflect that you are managing them in your role as conservator. You will also need to open a separate conservatorship checking account. Keep in mind, you will need to submit copies or images of any canceled checks with your periodic accountings, so do not bank online or make transactions using an automated teller machine. Note that if you are also serving in other fiduciary capacities for the ward—such as Representative Payee for Social Security, Veterans Administration, or Office of Personnel Management federal civil service benefits–you may have to maintain separate financial accounts for each program’s benefits so you can accurately report to each program.
Does a Conservator Get Paid?
Under Virginia law, a conservator is entitled to “reasonable compensation” for services rendered. Reasonable compensation is usually based on a schedule that calculates fees based on a percentage of the conservatorship’s income or principal and is offset for fees that the conservator pays for certain services in preparing the inventory or accountings.
If you have questions about the powers and duties of a conservator or need assistance in performing your duties to report to your assigned Commissioner of Accounts, please contact Promise Law today to schedule a consultation.