Conservatorships Generally Eliminate Informal Estate Planning Mechanisms
One issue with conservatorships is that if you have informal estate planning mechanisms in place, these mechanisms are generally displaced because of how conservatorships operate.
Primarily, a conservator will take title to your accounts, which means your accounts will be closed, and they will be placed into a conservatorship account title in the name of your conservator, with reference to the conservatorship estate.
Any beneficiary designations you had just went away. While there may be claims by the designated beneficiaries in certain respects, it's expensive and unlikely to ever be replaced as you intended.
For one thing, they would need to file some sort of lawsuit—whether that's a petition seeking a new beneficiary designation in the conservatorship action, or some other type of lawsuit. While you are alive, their claim is merely speculative to receive anything because, in theory, you could outlive your money.
Assuming that you didn't outlive your money, the longer that you do survive under a conservatorship, the more difficult it becomes for any claims to be made for your designated beneficiary because of the commingling of other conservatorship assets, the lack of ability to trace the funds to the original beneficiary designated account, and simply because your beneficiary may never know that they were a beneficiary under the account (i.e., financial institution may not have records back that far).
You may also be interested in:
- How Long Does a Conservatorship Last?
- The Cost of a Conservatorship Can Be Substantial
- What is a Conservatorship, and Do I Need One?
- Estate Plan Essentials That Could Save You Tens of Thousands in Your Lifetime
- My Parent Needs a Power of Attorney—Can I Have it Prepared for Their Signature?
- What is an Estate Plan?
- Why Should I Have an Estate Plan?
- Why Should I Use an Attorney Versus a Document Preparation Company?