Guardianship and Conservatorship

A guardianship is when the court appoints someone to manage health care and personal decisions for an incapacitated person. A guardian by law has all the duties and responsibilities that a parent has with respect to a minor child, except a guardian is not liable to third parties for the incapacitated person's actions solely by virtue of being the person's guardian. The incapacitated person under guardianship is called the “ward”. The person seeking to be appointed as guardian must petition the court and prove by clear and convincing evidence in a court hearing that:

• the person is incapacitated as defined under Arizona law i.e. is “impaired by reason of mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, or chronic intoxication to the extent that he lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person”, AND
• the appointment is necessary to provide for the demonstrated needs of the incapacitated person, AND
• the person’s needs cannot be met by less restrictive means, including the use of appropriate technological assistance.

• A guardianship is just a tool to get you where you want to go and should be considered a last resort when all else fails to protect an incapacitated person.

• If the incapacitated person has a valid health care power of attorney signed by the person at a time when they had capacity, in most cases you do not need to obtain guardianship over the person. However, health care powers of attorney lack the permanency of a guardianship because they can be revoked by the principal, who is the person for whom the document was created. If the principal is a vulnerable adult and is easily influenced by others, interested persons may try to use undue influence to get them to change their power of attorney and disputes can arise, creating a “dueling powers of attorney” conflict.

• If there is no valid Health Care Power of Attorney and a guardian has not been appointed, Arizona law dictates in order of priority, a default list of individuals who are authorized to make health care decisions on behalf of an incapacitated person. However, the person with priority may not be the best person to make decisions or is doing a poor job. A person designated by law to make health care decisions for an incapacitated person is called a surrogate. The order of legal priority for surrogates is as follows:

1. Court-appointed guardian
2. Agent under validly executed Health Care Power of Attorney
3. The patient’s spouse, unless the patient and spouse are legally separated.
4. An adult child of the patient. If the patient has more than one adult child, the health care provider shall seek the consent of a majority of the adult children who are reasonably available for consultation.
5. A parent of the patient.
6. If the patient is unmarried, the patient’s domestic partner.
7. A brother or sister of the patient.
8. A close friend of the patient. For the purposes of this paragraph, “close friend” means an adult who has exhibited special care and concern for the patient, who is familiar with the patient’s health care views and desires and who is willing and able to become involved in the patient’s health care and to act in the patient’s best interest.
9. If no one can be located under 1-8, the patient’s attending physician may make health care treatment decisions for the patient after the physician consults with and obtains the recommendations of an institutional ethics committee. If this is not possible, the physician may make these decisions after consulting with a second physician who concurs with the physician’s decision.

• In a case where police cooperation is required, for example when an incapacitated person wanders due to dementia and refuses to comply with directives, or has been detained by someone in their home or elsewhere where such detention is not in their best interests and the senior does not have the capacity to consent, the police do not place much credence on powers of attorney and are often hesitant to act without a court order or guardianship.

• A statutory surrogate who is not a guardian with mental health powers, or agent under a health or mental health care power of attorney specifically authorizing the agent to consent to inpatient psychiatric placement, cannot authorize inpatient psychiatric hospitalization.

• A statutory surrogate who is not a guardian or agent under a health care power of attorney cannot authorize the withdrawal of a feeding tube.

• A guardianship may be required to force the incapacitated person’s placement in a hospital or long-term care facility against the incapacitated person's will when the person does not have capacity to make rational decisions about their health care. (Note: A person with capacity may make bad decisions, but bad decisions alone are not a basis for obtaining guardianship.)

• A guardianship may be required even though the ward assents (agrees to) the placement but cannot give informed consent to treatment and there is no statutory surrogate willing and able to act, or the facility is uncomfortable with allowing the placement with the statutory surrogate’s authority alone, without a power of attorney or court appointed guardian.

• A guardianship may be required to have someone appointed to consent to medical procedures when the incapacitated person is either refusing or unable to consent.

• Even though guardians don’t typically handle the finances of their ward, in our experience IRS will allow a guardian to file tax returns.

For a guardianship, the petitioner must obtain a health professional’s statement supporting the finding of incapacity. If the petitioner is requesting mental health powers, the health professional must be either a psychiatrist or psychologist. For a conservatorship, a health professional’s statement is not required, but is recommended.

1. The petitioner files the necessary paperwork at the Probate Court and obtains a hearing date, which is usually 30 to 60 days from the date of filing, or if a temporary guardian is necessary because an emergency exists and the welfare of the ward is found to require immediate action, 3 to 5 days. If the petitioner is requesting both temporary and permanent guardianship, the petitioner can request that the temporary hearing be held at the same time as the permanent hearing.
2. The court appoints an investigator to the case and an attorney to represent the proposed ward. Both of these appointments are required by law and add to the cost of the guardianship.
3. The petitioner must arrange for personal legal service of the court papers upon the ward and by mailing via certified or registered mail or hand-delivering to anyone else required to be served by the law, at least 14 days prior to the hearing. If a temporary guardianship without notice was granted on an emergency basis, the ward must be personally served within 72 hours of the date on which the temporary appointment was granted by the court. The court may enter an order appointing a temporary guardian without notice if immediate or irreparable injury, loss or damage will result before the proposed ward or the court-appointed attorney can be heard. Other procedural requirements for obtaining a hearing without notice are set forth in A.R.S. § 14-5310.
4. The proposed guardian must also complete the state’s online guardianship training and file the signed completion certificate with the court. The training modules are located at https://www.azcourts.gov/probate/Training/Non-Licensed-Fiduciaries-Training. 
5. The petitioner must attend a court hearing and explain why the petitioner or the nominee should be appointed guardian.

The petitioner, if qualified by the court, is appointed as guardian and is issued Letters of Guardianship, which are then used by the guardian to show their authority when they make decisions on behalf of the ward.

An order appointing a temporary guardian without notice is effective for up to 30 days. A temporary guardian appointed after a hearing with notice may be appointed for a period of up to six (6) months. However, normally the temporary guardian will be appointed until the date of the permanent hearing.

The guardian will be required to file annual guardian’s and health care professional’s reports with the court. However, there is no court hearing to consider the reports. The court order will set the deadline for the guardian to file the annual guardianship reports and the Probate Administration will review the matter to ensure compliance with the order.

• Any interested person may apply for the appointment of a guardian and the court may appoint any qualified person to act as guardian. However, pursuant to A.R.S. § 14-5311, the following persons are given priority for appointment in the following order:

1. A guardian or conservator of the person or a fiduciary appointed or recognized by the appropriate court of any jurisdiction in which the incapacitated person resides.
2. An individual or corporation nominated by the incapacitated person if the person has, in the opinion of the court, sufficient mental capacity to make an intelligent choice.
3. The person nominated to serve as guardian in the incapacitated person’s most recent durable power of attorney or health care power of attorney.
4. The spouse of the incapacitated person.
5. An adult child of the incapacitated person.
6. A parent of the incapacitated person, including a person nominated by will or other writing signed by a deceased parent.
7. Any relative of the incapacitated person with whom the incapacitated person has resided for more than six months before the filing of the petition.
8. The nominee of a person who is caring for or paying benefits to the incapacitated person.
9. If the incapacitated person is a veteran, the spouse of a veteran or the minor child of a veteran, the department of veterans’ services.
10. A licensed private fiduciary.
11. A licensed public fiduciary.

• The court may pass over a person who has priority, for good cause. Good cause may include a determination that (a) the ward’s power of attorney is invalid, (b) honoring the ward’s power of attorney would not be in the physical, emotional or financial best interest of the ward, and/or (c) the estimated cost of the fiduciary and associated professional fees would adversely affect the ability to provide for the ward’s reasonable and necessary living expenses. Another example of good cause would be if the person with priority is exploiting or abusing the ward.

• More than one person may be appointed and serve as co-guardians, which provides flexibility because they can act independently or in concert, and when one of the co-guardians becomes incapacitated or dies, the remaining guardian can act alone. Co-guardians share decision-making for the ward and neither co-guardian’s rights or responsibilities are superior except as otherwise ordered by the court.

• A guardianship lasts for the lifetime of the ward, unless it is terminated prior to that time.

• On the appointment of a guardian, the court may determine that the ward’s privilege to obtain or retain a driver license should be suspended and issue an order suspending the privilege. However, if the court is presented with sufficient medical or other evidence to establish that the ward’s incapacity does not prevent the ward from safely operating a motor vehicle, it may decline to suspend the ward’s privilege to obtain or retain a driver license and issue an order allowing the ward to obtain or retain a driver license.
• Pursuant to the Arizona Constitution Article 7 Section 2 (C), once a person has been adjudicated as an incapacitated person, the person is no longer qualified to vote at any election. Once a person is deemed incapacitated, which is a requirement for a guardian to be appointed, the ward loses his ability to vote. A person for whom a limited guardian is appointed may retain the right to vote if the person files a petition to retain voting rights, a hearing is held, and the judge determines by clear and convincing evidence that the person retains sufficient understanding to exercise the right to vote.
• The ward’s rights to make his medical and placement decisions are taken away from him unless there is a limited guardianship, in which the court appoints a limited guardian and specifies time limits on the guardianship and limitations on the guardian’s powers). Although the guardian is required to take into consideration the ward’s wishes, ultimately the guardian must base his decisions on what is in the best interests of the ward.

• The guardian has powers and responsibilities similar to those of a parent of a minor child, except that the guardian is not legally obligated to contribute to the support of the ward from the guardian’s own funds.

• Unless the order appointing the guardian provides otherwise, the guardian’s duties and responsibilities include (but are not limited to) making appropriate arrangements to see that the ward’s personal needs (such as food, clothing and shelter) are met.

• The guardian is responsible for making decisions concerning the ward’s educational, social, and religious activities. If the ward is 14 years of age or older, the guardian must take into account the ward’s preferences to the extent they are known to the guardian or can be discovered with a reasonable amount of effort.

• The guardian is responsible for making decisions concerning the ward’s medical needs, including but not limited to the decision to place the ward in a nursing home or other health care facility and the employment of doctors, nurses, or other professionals to provide for the ward’s health care needs. However, the guardian must use the least restrictive means and environment available which meet the ward’s needs.

• The guardian may arrange for medical care to be provided even if the ward does not wish to have it, but the guardian may not place the ward in a level one behavioral health facility against the ward’s will unless the court has specifically authorized the guardian to consent to such placement.

• The guardian typically makes healthcare and placement decisions for the ward but is not permitted to manage the finances of the ward, except that the guardian can receive a limited amount of money and tangible property deliverable to the ward and apply the money and property for support, care and education of the ward. As a general rule, “limited amount” means that the ward does not receive income (from all sources) exceeding $10,000.00 per year, does not accumulate excess funds exceeding that amount, and does not own real property. If more than these amounts come into the guardian’s possession, or are accumulated by the guardian, the guardian is required to petition the court for the appointment of a conservator.

• The guardian cannot accept any compensation of any kind for placing the ward in a particular nursing home or other care facility, using a certain doctor, or using a certain lawyer. “Compensation” includes, but is not limited to, direct or indirect payments of money, “kickbacks,” gifts, favors, and other kinds of personal benefits. If the guardian believes a certain placement or service, that might otherwise be considered self-dealing or a conflict of interest, is in the best interest of the ward, the guardian must document to the court their reasoning for selecting such placement or service and obtain court approval.

• The guardian is required to report annually, in writing, with respect to the ward’s residence, physical and mental health, whether there still is a need for a guardian, and if there is no conservator, the ward’s financial situation. The report is due each year on the anniversary date of the issuance of the Letters of Appointment as permanent guardian.

• If the ward’s physical address or other contact information changes, the guardian must notify the court by filing a Notice of Change of Ward's Contact Information within three court days of learning of the change in the ward’s physical address. If the ward dies, the guardian must notify the court in writing of the ward’s death within 14 calendar days of learning that the ward has died.

• Similarly, if the guardian's contact information changes, the guardian must file a Notice of Change of Fiduciary's Contact Information within ten court days after such change occurs. If the guardian dies, the guardian's agent or nominate personal representative should inform the guardian's attorney and the court as soon as possible, because the court may need to appoint a new guardian on an emergency basis if there is no co-guardian.

• The guardian must be conscious at all times of the needs and best interests of the ward. If the circumstances which made a guardianship necessary should end, the guardian is responsible for petitioning the court to terminate the guardianship and obtaining their discharge as guardian. Even if the guardianship should terminate by operation of law (for example, upon the death of the ward), the guardian will not be discharged from their responsibilities until they have obtained an order from the court discharging them.

A conservatorship is when the court appoints someone to manage the estate and financial affairs of a person in need of protection by the court. A person for whom a conservator is appointed is called a protected person.

To determine that a person is in need of protection, the court must find that both of the following apply:

1. The person is unable to manage their estate and financial affairs effectively for reasons such as mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power or disappearance.
2. The person has property that will be wasted or dissipated unless proper management is provided, or that funds are needed for the support, care and welfare of the person or those entitled to be supported by the person and that protection is necessary or desirable to obtain or provide funds.

Below are some examples of when a conservatorship may be necessary:

• A conservatorship may be necessary if no financial power of attorney exists, the person is unable to manage their own finances, and no one else has legal access to the person’s assets to pay for their needs. This is a problem that often arises when selling jointly held real property, accessing individual retirement accounts and other assets held only in one person’s name without a joint account holder, designated power of attorney, or representative payee, and even for filing tax returns.

• If the agent appointed under financial power of attorney or anyone else is financially exploiting the person, a conservatorship may be necessary where there are no other means to stop the exploitation. In some cases there may be other ways to stop the exploitation, however. If the person has a trust then the person can be removed as trustee according to the terms of the trust due to incapacity and a successor trustee can take over and remove the incapacitated person on his or her accounts as the acting trustee and have the successor trustee listed on the trust account to have access instead. However, retirement plans cannot be titled into the name of a trust, and therefore sometimes a limited conservatorship may be required for the retirement plans even if the trust assets are not under the supervision of the court.

• The incapacitated person is mishandling their own assets. (Note: the person has to be in need of protection as defined above for a conservatorship to be put in place. If the person is making bad financial decisions but doesn't meet the legal definition of a protected person, a court will not approve a conservatorship.)

• It should be noted that when exploitation or irresponsible spending is a problem, a financial power of attorney will not cure the problem. A financial power of attorney will give another person the ability to handle the incapacitated person’s finances but does not take any authority away from the incapacitated person to handle his own financial affairs.

• The person seeking to be appointed as conservator must petition the court and prove by a preponderance of the evidence in a court hearing that:

1. The proposed protected person is unable to manage his/her estate and affairs effectively due to incapacity, AND
2. The person’s assets will be wasted or dissipated without proper management, OR funds are needed for the support, care and welfare of the person or their dependents and that such protection is necessary or desirable.

Any interested person may petition for the appointment of a conservator and the court may appoint any qualified person to act as conservator. However, pursuant to A.R.S. § 14-5410, the following persons are given priority for appointment in the following order:

1. A guardian or conservator of the person or a fiduciary appointed or recognized by the appropriate court of any jurisdiction in which the incapacitated person resides.
2. An individual or corporation nominated by the incapacitated person if the person is at least fourteen years old and has, in the opinion of the court, sufficient mental capacity to make an intelligent choice.
3. The person nominated to serve as conservator in the incapacitated person’s most recent durable power of attorney.
4. The spouse of the incapacitated person.
5. An adult child of the incapacitated person.
6. A parent of the incapacitated person, including a person nominated by will or other writing signed by a deceased parent.
7. Any relative of the incapacitated person with whom the incapacitated person has resided for more than six months before the filing of the petition.
8. The nominee of a person who is caring for or paying benefits to the incapacitated person.
9. If the incapacitated person is a veteran, the spouse of a veteran or the minor child of a veteran, the department of veterans’ services.
10. A licensed private fiduciary.
11. A licensed public fiduciary.

• The court may pass over a person who has priority, for good cause. Good cause may include a determination that (a) the protected person’s power of attorney is invalid, (b) honoring the protected person’s power of attorney would not be in the physical, emotional or financial best interest of the protected person, and/or (c) the estimated cost of the fiduciary and associated professional fees would adversely affect the ability to provide for the protected person’s reasonable and necessary living expenses. Another example of good cause would be if the person with priority is exploiting or abusing the protected person.

• More than one person may be appointed and serve as co-conservators, which provides flexibility because they can act independently or in concert, and when one of the co-conservators becomes incapacitated or dies, the remaining conservator can act alone. Co-conservators share decision-making for estate and financial affairs of the protected person and neither co-conservator’s rights or responsibilities are superior except as otherwise ordered by the court.

Other Requirements

• Notice and service requirements for conservatorship are the same as the requirements in guardianship proceedings (see above).
• As with guardianship, proposed conservators who are not non-licensed fiduciaries are required to complete the training program for non-licensed fiduciaries. The training modules are located at https://www.azcourts.gov/probate/Training/Probate-Training-Non-Licensed-Fiduciaries. If appointment is made on an emergency/temporary basis, the conservator must complete his or her non-licensed fiduciary training within 30 days of appointment.

The Hearing

As with guardianship proceedings, if the proposed protected person or a person entitled to notice objects at the time of the initial hearing or objects in writing at least three days prior to the hearing, the hearing will be reset and a discovery schedule will be set.

If the court grants the petition, the court will issue a written order appointing the conservator, and the proposed conservator must file an acceptance of the appointment after which time Letters of Conservatorship are issued by the probate registrar of the court. Further obligations of the conservator are set forth in the “Order to Conservator,” which is signed by the conservator and the court.

Temporary Conservatorship

As with guardianships, temporary conservatorship appointments may also be made in the event of an emergency if immediate or irreparable injury loss or damage will result if a temporary order is not issued. The procedures are the same as for temporary guardianship (see above).

Petition for Single Transaction Authority

In some cases, the petitioner may not want to go through the expense and hassle of being appointed as a conservator on a permanent basis. He or she may only need the court to authorize a single transaction. For example, if a house is held in joint tenancy by a married couple and one spouse is incapacitated and the house needs to be sold, the competent spouse may petition the court to request the court to authorize the sale of the house and the placement of the proceeds in a joint account. There is no guarantee, however, that the court will not require a full conservatorship with the annual accountings. Whether the court will grant the Petition for Single Transaction Authority depends on the circumstances of the case.

• BOND: In most cases, the conservator must be bonded for the value of the estate to which the conservator has access without court order.

• RESTRICTED ASSETS: Some assets may be restricted (i.e. conservator cannot access them without an additional court order), which reduces the bond amount and premium and offers additional protection for the incapacitated person. Normally, assets which are not going to be used to pay for care or other expenses during the next year and a half or so can be restricted. For example, a home is often restricted from sale or encumbrance without a court order unless the conservator anticipates selling the property in the near future.

• DUTY TO COLLECT AND RETITLE ASSETS: Once the conservator is appointed, the conservator should investigate all of the protected person's assets and retitle them into the name of the conservatorship with the conservator's name listed on the assets as "conservator". If the assets are ordered to be restricted then the conservator will need to file proof with the court that the assets have been in fact been restricted. If there is real property then the Letters of Conservatorship will have to be recorded.

• INVENTORY: Within 90 days of the conservator’s appointment, the conservator must prepare and file an inventory of the property owned by the protected person and their values as of the date of the appointment. Along with the inventory, a copy of the protected person’s consumer credit report must also be filed. The report must be from a credit reporting agency and dated within 90 days before the filing of the inventory. A.R.S. § 14-5418.

• SUSTAINABILITY REPORT: Each conservatorship account (see below)must include a statement regarding the sustainability of the conservatorship estate, including whether the annual expenses of the conservatorship exceed income and, if so, whether the assets available to the conservator less liabilities are sufficient to sustain the conservatorship for the duration of time the protected person needs care or fiduciary services, and if the estate is not sustainable, the conservator must include a discussion of available options. See Rule 45(e)(3) of the Arizona Rules of Probate Procedure. Forms can be located at www.azcourts.gov/probate/probateforms.

• BUDGET: The conservator must also prepare and file a conservatorship estate budget (details regarding the anticipated income and anticipated costs) not later than the date the inventory is due, and thereafter with each conservator’s account (see below). See Rule 45(d) of the Arizona Rules of Probate Procedure. Forms can be located at www.azcourts.gov/probate/probateforms. If the conservator determines that any category of expenditures is projected to exceed the budgeted amount by the threshold set forth in the instructions to Form 5, Conservatorship Estate Budget (currently, the greater of 10% or $2,000), the conservator must file an amended budget no later than 30 days after making the determination.

• ACCOUNTING: In most cases, the conservator will be required to file annual accountings with the court. Annual accountings must reflect all activity relating to the conservatorship estate within the accounting period and must describe all money and property received or disbursed by the conservator during that period. As to money and property received, the conservator must provide the date of each receipt, the source of the receipt, the purpose of the receipt, and the amount of the receipt. As to money and property disbursed, the conservator must provide the date of each disbursement, the payee/distributee, the purpose of the disbursement, and the amount of the disbursement. With each account that the conservator files, the conservator must also submit a bank statement or financial account statement that supports the ending balances of each bank or financial account shown on the conservator account filed with the court.
• The first accounting period runs from the date the conservator’s letters were first issued through and including the last day of the ninth month after the date the conservator’s permanent letters were issued and must be filed with the court on or before the anniversary date of the issuance of the conservator’s permanent letters.
• Subsequent accountings run from the ending date of the most recent previously filed account through and including the last date of the twelfth month thereafter, and must be filed with the court on or before the anniversary date of the issuance of the conservator’s permanent letters.