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What are my priorities in using the individual's money?
Your first priority is paying for the present needs of the individual and other people whom the individual has supported. Make sure all taxes are paid when due.
The second priority is to pay necessary expenses to conserve the assets of the individual. Just debts can then be paid and the balance of assets invested for future needs.
Whom may the individual have supported?
The individual owes a duty of support to his or her spouse and minor children. There may also be members of the individual's household such as disabled children or parents to whom the individual has provided support.
How might I determine the present needs of the individual?
Talk with the individual, then any family involved. If there are caretakers, speak with them. If the individual has a guardian different from you, rely on the guardian to indicate these needs. Present needs include expenses for housing, food, clothing, health care, transportation, social services, education, entertainment and well-being.
What is the proper relationship between guardian and conservator?
In simple terms, the guardian will determine the needs and arrange for appropriate services, then the conservator will pay for those needs. It is important there be good communication between the two: the guardian may be well attuned to needs; the conservator should well know what the individual can afford.
What if the guardian is not reasonable?
It remains the responsibility of the guardian to see the individual's daily needs are met. If there are differences of opinion between you and the guardian that cannot be resolved, contact the probate court.
If there is no guardian, what standard of living should I aim to sustain?
A guide is the standard of living the individual had before the conservatorship was established - this would reflect the actual or presumed wish of the individual. You may make a judgment the individual cannot sustain that standard, given present income, asset value, and projected future needs over the course of the conservatorship.
Should I prepare a budget?
Yes. In consultation with the individual, if possible, and with the guardian, if any, it would be well to project the amount of annual income and the amount of all foreseeable expenses. You should consider any sources of income or support outside the conservatorship.
Once a budget is set, it could be decided who is to pay for each expense: the conservator directly, the guardian with funds provided by the conservator, or the individual.
Are there special rules if the individual lives with the conservator?
Yes. If the individual lives with you, and you are charging the individual for room or room and board, you must get court approval of the arrangement. The court will inquire whether the amount charged is reasonable.
If a different person is guardian, and the guardian provides room or room and board, the conservator can approve of the amount charged if it is reasonable.
What if the conservator lives in the home of the individual?
Unless you are the spouse of the individual, you should consider paying rent and a share of the utilities.
Can I question bills?
Yes. You have the same rights to question a bill the individual would have. If you feel the individual is being overcharged, or that services or products provided are inadequate, pursue satisfaction before paying the bill.
Is it my obligation to pay the bill of the guardian ad litem appointed in the court proceeding?
Yes, using conservatorship funds. If you have questions about the amount charged, first ask the guardian ad litem for an explanation. If you are not satisfied, ask the probate court for help in resolving the dispute.
Do I have authority to sign contracts for products or services for the individual?
Generally, yes. Make sure when you sign, you indicate by your name you are signing as conservator. You are committing the conservatorship to pay, rather than committing your personal funds.
You have the power to purchase health insurance, homeowner's insurance and automobile insurance.
What housing needs need I meet?
If the individual is living at home, it is likely he or she wishes to remain there. Keep any rent or mortgage payments, utility bills, and insurance premiums up to date.
You should also be prepared to pay for services which may be necessary to allow the individual to remain in his or her home. Although you might help arrange these services, the choice of services belongs to the individual or guardian.
What are some of these services?
- Chore services, including heavy cleaning and yard workTop of Page- Home repair, weatherization and remodeling
- Homemaker, including housekeeping, meal preparation and shopping
- Home delivered meals
- Personal care
- Home health care, hospice care
- Telephone reassurance
- Respite care
Can I sign an apartment lease?
Yes. You do not have the authority to determine where the individual lives; that right belongs to the individual or the guardian. But once the choice is made, you can co-sign a lease as conservator.
Can I prevent an individual from moving to another county or to another state?
No. Whether you have an obligation to provide funds for the individual to move may depend on the individual's financial circumstances and plans. Contact the probate court if you have questions.
Can I sign an admissions contract for nursing home care?
No. State law requires the admissions contract be signed only by the home and the individual or his or her guardian. You could sign a separate agreement regarding paying for care, as conservator.
Be careful. Read both the admissions contract and any other contract thoroughly. On the signature line of a separate contract, cross out any reference to "responsible party" and sign only as "conservator".
You might also add a statement to the contract, "I sign as conservator and I only agree to pay nursing home expenses from the individual's funds, not from my own funds."
As conservator, do I have the power to authorize or refuse medical treatment?
No. Depending on circumstances, that belongs to the individual himself or herself, his or her patient advocate, or his or her guardian. The same is true for choosing a doctor or hospital.
Nothing prevents the conservator from inquiring as to medical needs, including assistive devices such as eyeglasses and hearing aids.
What is a patient advocate?
A patient advocate is someone the individual has appointed in a written durable power of attorney for health care, to make health care and personal care decisions when the individual can longer make them for himself or herself.
As conservator, you are responsible for dealing with bills for health services to which the individual, patient advocate or guardian has consented.
What can I do if an individual suffers from alcoholism?
You can pay for treatment, although you have no authority as conservator to force an individual to accept treatment.
Unless required by court order, you can refuse to provide money directly to the individual if he or she spends it on alcohol.
How do I pay for health care costs?
Depending on the age and circumstances of the individual, you may need to be familiar with Medicare, Medicaid, Veterans Administration Hospital services and private health insurance.
What is Medicare?
Medicare is a federally-funded program that covers part of the cost of hospital and doctor care. People are eligible if age 65 or older, or permanently disabled, or receiving kidney dialysis. Part A of Medicare generally pays for hospital care and Part B for doctors' services.
Some services, such as annual checkups, routine foot care and hearing aids are not covered at all by Medicare.
There are both deductibles and co-payments for covered services. A premium is deducted each month from the individual's Social Security check. More information is available in Your Medicare Handbook, available from the Social Security Administration.
When should application for Medicare be made?
Contact the Social Security office a month before the individual turns 65.
May a doctor charge a Medicare beneficiary any amount?
No. There are strict limits to the amount a doctor can charge.
A doctor who accepts assignment will only charge what Medicare considers reasonable. He or she bills the patient for any deductible and coinsurance, and collects the balance directly from Medicare.
What if a doctor does not accept assignment?
The patient must pay the bill. Medicare will reimburse the patient for the reasonable charge. The patient must pay the difference between the reasonable charge and the actual charge, but the doctor cannot charge more than 115 percent of the reasonable charge.
An individual may also choose to enter a private contract with a doctor who does not participate in Medicare. The charge is whatever is negotiated.
Do I have to complete paperwork to claim benefits from Medicare?
No. Federal law requires the doctor to complete the paperwork. You will receive an Explanation of Benefits from Medicare, showing what Medicare has and has not covered.
Does Medicare cover long term care?
Medicare covers skilled nursing home care for a limited time, and only in certain circumstances. Medicare covers no basic care.
Medicaid does cover both skilled and basic care.
What is Medicaid?
Medicaid is a program funded jointly by the federal government and Michigan, administered by the Michigan Family Independence Agency. Eligibility depends on an individual's age, income, assets, and in some cases, amount of medical bills. Eligibility is re-determined once a year.
There are relatively small co-payments for some services. Reimbursement is always made directly to the health care provider.
Are there instances when an individual would have a conservator and yet be eligible for Medicaid?
Yes. One set of circumstances is when the individual is married, he or she is in a nursing home, and the spouse lives at home. There are special eligibility rules in those circumstances.
You would also have to be cognizant of these rules if the individual for whom you are conservator were at home and his or her spouse were in the nursing home.
What is the purpose of the special eligibility rules?
The complex rules, based on federal law, are designed to help prevent the impoverishment of the spouse still living at home. The asset and income levels set by rule for the community spouse are amenable to upward adjustment through court order.
More information is available in the pamphlet, Medicaid Nursing Home Eligibility for Residents with a Spouse at Home, available from Citizens for Better Care. Citizens for Better Care can be reached at 1-800-292-7852.
Are there other circumstances when a conservator might need to apply for Medicaid?
Yes. You might be conservator for an unmarried individual who spends a number of years in a nursing home. If countable assets will go below $2,000, and present income is less than the cost of care, the individual will be eligible for Medicaid. (Countable assets do not include the value of the individual's home.)
You should apply for Medicaid just before countable assets fall under $2,000.
If the individual has been paying premiums for private insurance, should I continue to pay?
Yes. If the individual is age 65 or older, the insurance is likely a Medicare supplemental policy.
You may have to complete the paperwork to make a claim for benefits under a private insurance policy.
If the individual has no private insurance, can I purchase a policy?
Yes. Try to comparison shop to obtain the best value. If the issue is joining a health maintenance organization, you should make sure the individual's doctor is part of the HMO.
What benefits are available through a Veterans Hospital?
A veteran may be eligible for hospitalization and outpatient care. The VA also contracts with nursing homes for care.
Am I responsible for paying taxes when due?
Yes. For example, you would pay winter and summer property taxes when due. If the individual is an older adult, and there are cash flow problems, you can apply to defer payment for several months. You may also be able to defer special assessments such as those for new curbs or sewer installation.
Must I file any federal, state or city income tax returns that are due?
Yes.
What determines whether a return is due?
Factors include the age of the individual, the amount of income, the source of income, and whether there have been capital gains on the sale of assets.
How can I determine if required returns were filed in previous years?
If you suspect required returns were not filed, contact the Internal Revenue Service and the Michigan Department of Treasury.
Might I file a Michigan return even if no tax is due?
Yes. An individual with no tax liability may be due a homestead tax credit, home heating credit, or prescription drug credit. Returns can be filed for the present year and three prior years.
An individual who rents an apartment or is in a nursing home may qualify for a homestead tax credit.
May I hire an accountant or other tax advisor to prepare tax returns?
Yes. You may need advice as to whether a federal return need be filed, and what credits are available on a federal and state return.
If you feel you need professional tax assistance, consider seeking it soon after you are appointed conservator. You may pay the tax advisor a reasonable amount for his or her services, using the funds of the individual.
Can I sign an income tax return?
Yes.
If an individual's income is not sufficient to meet his or her present needs, must I use my own money?
No. Being conservator creates no obligation to use your own funds.
In these circumstances should I lend the individual money?
You have the right to advance the conservatorship money, and to be repaid for money so advanced. You would not charge interest unless the probate court approved.
It may be best to avoid financial transactions involving your personal funds and the conservatorship.
What do I do to make ends meet?
You would begin to use assets of the individual. At the same time, you might try to scale down expenses.
What should I consider in choosing assets to use?
You would usually begin by using liquid assets such as a savings account certificate of deposit, or mutual funds.
You should consider how long the conservatorship might last, including the possibility the individual might regain the ability to manage his or her own affairs.
How do I make withdrawals if funds are in a restricted account?
You must petition to the court for authority, and obtain the court's approval. In the petition, you would explain your need to use restricted funds.
What if bank funds are insufficient?
Then you might sell some stocks and bonds.
As conservator you have an obligation to be sensitive to the estate plan of the individual. In choosing assets to use, you should disrupt the estate plan as little as possible. The individual may also have sentimental attachment to certain assets but not others.
Do I have the right to read the individuals will to know the estate plan?
Yes. Although you have no right to amend or revoke the will, you have a right to know its contents.
What if I deplete bank accounts, certificates of deposit, mutual funds and stocks and bonds?
You will need to look at other assets. The sale of real estate is covered in the next chapter. You must continue to be sensitive to the estate plan of the individual.
Assets of the individual should never be purchased by you or a family member or business associate of yours without prior court approval.
How should I make payment for present needs?
Use the checking account to pay bills and obligations of the individual. The monthly statements and cancelled checks provide a good record of the expenditures.
Except for small expenditures do not use cash. Keep a detailed record of cash expenditures, and obtain receipts when possible.
Can I pay for goods and services in advance?
Yes, if you reasonably believe the goods will be delivered or the services rendered as promised.
May I provide cash to the individual to make expenditures he or she wishes?
Yes.
If I give cash to the individual, do I need a receipt?
No. It is demeaning to request a receipt from someone receiving his or her own money. Do keep a record of the cash outlays.
May I provide funds to the guardian and allow the guardian to make purchases?
Yes. The guardian can then account to you for those funds.
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Last Updated 12-12-02
Send your comments, questions and suggestions to Phil Harter at 161
E Michigan Avenue, Battle Creek, Michigan 49014 or
e mail to pharter@calhouncountymi.gov