Palm Springs Estate Planning Lawyer Blog
Assemblymember Evan Low’s assembly bill, AB 1194, dramatically changes conservatorships in California. In the wake of the #FreeBrittney movement and the 2020 Netflix film, “I Care a Lot”, California is poised to significantly tighten the rules governing conservatorships. Governor Gavin Newsom signed the bill on September 30, 2021 which will go into effect early next year.
In the words of Low, “California’s conservatorship system is failing people from every walk of life, whether they are a global superstar whose struggles unfortunately play out in the public or a family unsure of how to take care of an elderly parent.” This bill is the most comprehensive attempt to overhaul conservatorships in California since the Omnibus Conservatorship and Guardianship Reform Act of 2006.
This bill will amend Section 1051, 1460, 1471, 1826, 1850, 1850.5, 1851, 1851.1, 1860, 1860.5, 1862, 1863, 2250, 2250.6, 2253, 2401, 2620, 2623, 2640, 2641, 2653, and add Sections 1851.6 and 2112, and repeal Section 1458 of the Probate Code. It would also amend Section 6580 and add Section 6563 of the Business and Professions Code.
Some of the most notable changes include:
A professional fiduciary with a website is required to post a schedule of their fees online. If the fiduciary does not have a website, the fiduciary will be required to provide a written schedule of their fees to a prospective or current client. If the prospective or current client is conserved, the fee schedule must be provided to “all interested persons”.
The Professional Fiduciaries Bureau is required to investigate the actions of a professional fiduciary upon receipt of a complaint from any person. The bureau is required to revoke a license of a professional fiduciary in the case of breaches of a fiduciary duty that caused serious physical or financial harm or mental suffering to a client through gross negligence or gross incompetence.
Any professional fiduciaries who abuse conservatees will face a civil penalty of up to $10,000 for each separate act of abuse.
Courts are required to allow representation by an attorney for whom a conservatee, proposed conservatee, or person alleged to lack capacity, expresses a preference even if such attorney is not on any court-approved lists. The role of the legal counsel for the conservatee, proposed conservatee, or person alleged to lack capacity is a zealous, independent advocate.
Court investigators are required to gather and review additional information including medical reports from the proposed conservatee’s health care providers and at least one report from the proposed conservatee’s primary care physician. Investigators are required to ask the conservatee if he or she wishes to remove the conservator and appoint a successor conservator or if the conservatee wishes to terminate the conservatorship.
Expenses and compensation of a conservator must be not only just and reasonable but also in the best interest of the conservatee. This will limit the allowance of fees to only those fees and expenses that actually benefitted the conservatee. Conservators will not be compensated from the estate for any costs or fees incurred in unsuccessfully defending a fee petition. Under current law, such fees for unsuccessful petitions were allowed if they were made in good faith. The new provision removes the “good faith” standard altogether. This may mean that attorneys need to reexamine their engagement letter language when it comes to conservatorship matters and responsibility for fees incurred.
Due to the penalties that can be imposed against a professional fiduciary, any professional fiduciary should revisit their insurance coverage limits to ensure that they have an adequate level of professional liability coverage.
Only time will tell if the new rules will substantially reduce the abuses publicized in recent cases. Although many of the changes are designed to reign in unruly conservators, an unintended consequence of the new rules may be less practitioners and professional fiduciaries willing to take conservatorship cases.
The attorneys at Burt + Clerc are happy to answer your questions regarding conservatorships in California.
