From Retirement Now Newsletter August 5th 2021

One item that I’ve seen in the news a lot lately (right before I lose interest, I might add) is the Britney Spears conservatorship battle.

I can’t say this is a story that interests me very much. But it actually has some very surprising applications for a retiree. At the least it can be viewed as something of a cautionary tale that a retiree could learn from to avoid some potential pitfalls in retirement.

And the real lesson (as it pertains to a retiree) is on the importance of avoiding conservatorship entirely by having a power of attorney.

A little background…

As of writing this, Spears has lived under a conservatorship for 13 years. She had exhibited a lot of erratic behavior that would cause some to question her ability to manage her affairs. It’s not important to get into here, but I’m sure a lot of people that live a fast-paced surreal celebrity life go through these types of mental trials, making it harder to keep a level head.

But this word “conservatorship” is one that you may be familiar with, but we don’t hear it often and you may not know all that it entails. It is an arrangement where a person’s decision-making power is handed over to others. This can include personal decisions, financial decisions, and legal decisions.

Based on one article I was reading, it claims Spears didn’t have the authority to decide to get married or have kids for example (she claims she has no authority to have a doctor remove a birth control device from her), or spend her money as she wants.

Call me Switzerland on this topic. I’m not taking sides. I don’t know enough about the actors involved in all this to formulate an intelligent opinion, will probably never know, but I do hope for the best for all parties involved.

But as it relates to us everyday folk…

One way to help avoid a conservatorship is by having a power of attorney.

No, you are probably not going to have a conservatorship imposed on you because of the craziness that can be caused by a multi-million dollar celebrity lifestyle, or because of the mental break down caused by paparazzi never allowing you any privacy.

What is more likely to happen is if you ever become unable to make financial or health decisions for yourself, your relatives could potentially be put in a situation where they have to make those decisions for you. And if you don’t have a power of attorney that legally allows them to do this, they may have to ask the courts to appoint a conservator who has the legal authority to make these decisions.

This could largely be avoided with a power of attorney.

I am a financial advisor. I am not an attorney. So whenever I talk to my clients on the importance of certain estate planning documents, like a will, advance healthcare directive, or power of attorney, I always encourage them to see a licensed attorney for further advice.  

So what’s so bad about getting a conservator appointed when the time arises?

An article from NOLO called “Conservatorships and Adult Guardianships” describes it better than me.

It says that:

“Conservatorships are time-consuming and expensive; they often require court hearings and the ongoing assistance of a lawyer. The paperwork can also be a hassle, because the conservator must keep detailed records and file court papers on a regular basis.

All court proceedings and documents are a matter of public record, which can be an unwelcome intrusion for someone who values independence and privacy.”

It goes on to say that conservators must answer to court supervision to help protect the one in their care. Some courts may even require the conservator to get permission before making financial decisions like selling real estate, or permission for health care decisions like terminating life-support.

And the most important question: “How do I avoid conservatorship?”

The article recommends an older person to put in place durable powers of attorney before any health crisis occurs.

The “durable” in durable power of attorney means it stays in force after a person becomes incapacitated. If it’s not “durable” the arrangement can be terminated when the principal becomes incapacitated, thus defeating the purpose of trying to have someone legally appointed to act on your behalf when you no longer can.

The article continues, this time describing the court process to establish a conservatorship:

“When someone begins a conservatorship proceeding, a judge must hear evidence on the person’s mental capacity. If the judge concludes that a conservator is necessary, he or she will appoint one — commonly, the spouse or adult child.

It’s rare, but sometimes several family members or friends may vie for the job. If that happens, the judge follows preferences established by state law. Most states give preference to the conservatee’s spouse, registered domestic partner, adult children, adult siblings, or other blood relatives. But a judge who thinks someone else is best for the job may pick that person.”

The takeaway from all this should not be to understand all the nuances of the law just from reading one article. There’s a reason why attorney’s go to law school and must pass the Bar Exam. And also remember, living in a union of 50 different states means there will be variations of proceedings and what the law actually is.

So the real takeaway is to make sure you discuss this matter with an attorney if you don’t have a power of attorney document in place already. And lean on their advice.

Afterall, this falls under estate planning, and estate planning is one of the five pillars of financial planning.

There’s a lot to think about when it comes to retirement planning. And if you find yourself concerned or anxious, like there are just too many variables to keep track of, when it comes to planning your retirement and keeping it on the right track, then we should talk.

You can grab a 20 minute spot on my calendar for us to have a chat by clicking here.