Conservator - Should the conservator pay a credit card bill for a protected individual generated after appointment of a conservator?

Return to Citizen Questions Menu
Return to Calhoun County Courts Home Page

Question

We have a client who is conservator of both person and finances for his sister with Alzheimer disease. She is applying for, receiving and using credit cards! What does he do? Is he liable? We are not as concerned with the conservator's personal liability as we are with the protected individual's. In other words, credit card companies cannot collect from any protected individual (i.e.. minor) or can they? Can they extend credit to a protected individual? (I understand they do so, just wondering whether they can collect in Michigan.)

Should the conservator pay a credit card bill for a protected individual generated post appointment of a conservator? In doing so, are they modifying the contractual arrangement between the lender and the protected individual?

Answer

A guardian or conservator would normally not be liable for the obligations of the ward. I believe that conservator should notify the credit card company as soon as he or she becomes aware of the card and demand the card be canceled if the conservator determines that the ward can not handle the responsibility of a credit card.

The appointment of a conservator vests in the conservator title as trustee to all of the protected individual's property. A person under a conservatorship may not legally enter into a contract. By recording the letters of conservatorship the conservator can give record notice of title as between the conservator and the protected individual.

It would be my opinion that unless the creditor was aware of the conservatorship, any contracts entered into by the protected individual would be voidable. In some instances where the protected individual has obtained good value, the conservator may be obligated under equitable principles to pay the creditor or return the goods. However, if the creditor knew of the conservatorship, equity may not support a recovery from the conservatorship.

In my opinion you may return goods purchased by the protected individual and cancel any obligation to the creditor by showing that a conservatorship was in existence at the time of the purchase. You may possibly be obligated to pay where good value was received and the goods can no longer be returned. If you question a bill, you need not pay it. The creditor would then need to submit a claim against the conservatorship and the conservator may file a disallowance of the claim. The creditor would then need to petition the court to determine the validity of the claim.

Return to Citizen Questions Menu

Return to Calhoun County Courts Home Page

Last Updated: 12-10-07

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