Conservatorships for an Incapacitated Adult
Conservatorships for an Incapacitated Adult
1. How should a conservatorship bank account be titled?
The accounts should be titled as “(Fiduciary Name(s)), Conservator for (Ward’s name), Incapacitated Adult” or similar language.
2. Is a conservator allowed to provide spending money directly to the ward?
A court order may authorize small amounts of money which can be paid directly to the ward. If the conservator believes that providing funds to the ward will enhance the quality of living for the ward, the conservator should request permission from the Commissioner to provide spending money directly to the ward. Such request must be in writing and will generally not be considered until after the first account is filed.
3. What is the difference between carrying value and market value when reporting on an account?
The carrying value is the fair market value of an asset when the conservator first gains control of the asset. The carrying value will remain static unless funds are added to the account or withdrawals are made from the account. A bank account or a money market account will always have the same carrying value and market value. Investment assets such as stocks or mutual funds fluctuate in value. Real estate usually fluctuates in value from year to year. For these assets, you will have a different carrying value and market value.
4. May I borrow money from the conservatorship provided that I pay back the loan?
No. A fiduciary is never allowed to borrow money from the ward’s estate.
5. What should a conservator do with the ward’s personal property, such as jewelry?
The conservator should safeguard the ward’s personal property especially if it is of significant value. Depending on the ward’s financial resources, the conservator may need to sell personal property of value.
6. What is required of the conservator when the ward dies?
In most cases, the conservator will pay all funds under their control to the personal representative of the decedent’s estate. If the asset has a beneficiary designation or is payable on death to another person, the asset will pass directly to the named beneficiary(s). If the assets on hand at death are less than $25,000, the Virginia Code does authorize direct payment to certain individuals. Please consult with your attorney if you are unsure what to do. Nevertheless, the conservator will need to file a final account with the Commissioner of Accounts to show that the ward’s funds have been properly spent and distributed.