Trusts and Estates

LEGISLATION ALERT: Conservatorship 2021

By Ryka Farotte

AB 1194 is a comprehensive bill that makes several notable changes to conservatorship and guardianship law.   It is effective as of January 1, 2022.

Short summary: 

This bill has a number of important components that attorneys in the field should be aware of:

  • Requires explicit disclosures of professional fiduciary fees up-front, and limits fees if a fiduciary unsuccessfully challenges a fee denial or otherwise acts against the best interest of a conservatee or ward. 
  • Expands the Professional Fiduciaries Bureau’s authority to impose sanctions and revoke fiduciary licenses, and allows the courts to impose civil penalties on both professional and non-professional conservators.
  • Clarifies that court appointed counsel shall act as zealous advocates representing the wishes of the client in conservatorship proceedings instead of representing the “best interests” of the client.
  • Expands the duties of court investigators and the courts in overseeing conservatorships.

Summary:

This bill modifies and adds a number of sections to the Business and Professions and Probate Codes: 

Section 6563 was added to the Business and Professions Code requiring professional fiduciaries with websites to post a schedule or range of fees, including hourly fees, for services offered.  Professional fiduciaries without websites are required to give prospective clients a schedule or range of fees and give the same to current clients upon request. 

Business and Professions Code section 6580 has been amended to direct the Professional Fiduciaries Bureau to investigate certain complaints and impose sanctions if the professional fiduciary (1) caused financial or physical harm or mental suffering to the client through a breach of duty, (2) abused an elder or dependent adult, or (3) violated applicable statutes or regulations.  The changes include expanded rules for referrals made by courts.  Moreover, the statute expressly states that the Bureau shall revoke the license of a fiduciary that (1) knowingly, intentionally, or willfully breached a duty to an elder or dependent adult client constituting elder abuse or (2) caused serious physical or financial harm or mental suffering to a client through gross negligence or gross incompetence. 

Probate Code section 2112 was added and introduces monetary civil penalties the court may impose on both professional and non-professional conservators.  Furthermore, under Probate Code section 1051, courts must now report impositions of penalties on professional fiduciaries to the Bureau.  The court is also obligated to provide the Bureau with access to information, including confidential information, to assist in the investigation. 

The new Probate Code section 1458 directs the Judicial Council to provide a report to the Legislature measuring court effectiveness in conservatorship cases. 

Probate Code section 1471 was changed to make clear the role of counsel appointed by the court to represent conservatees, proposed conservatees, and persons alleged to lack legal capacity.  Statutory language stating counsel was to represent the “interests” of the person was removed.  Additionally, the statute now states that the role of counsel is that of “a zealous, independent advocate representing the wishes of their client . . . .”  The amendments also direct the court to allow representation by the preferred attorney of the person unless the attorney cannot provide zealous advocacy or has a conflict of interest. 

The bill further expanded the duties of court investigators and courts in investigating and reviewing conservatorships.  Many of these changes involve the subject of terminating conservatorships or situations where the conservatee wishes to do so.  Alongside, the Legislature modified and added to the statutes governing the hearing process for termination of conservatorships. 

Probate Code section 2401 now expressly prohibits guardians or conservators who are not a trust company, or their employees, from hiring or referring any business to an entity in which the guardian, conservator, or employee has a financial interest.  Though professional fiduciaries may still hire and compensate individuals as employees with court approval. 

Compensation for guardians and conservators under Probate Code sections 2623, 2640, and 2641 was also modified.  The statutes prohibit guardians and conservators from being compensated for fees and costs incurred in unsuccessfully defending their fee request petitions, opposing petitions, or any other unsuccessful request or action made by, or behalf of, the ward or conservatee.  However, if the court determines, by clear and convincing evidence, the request or action was made in good faith, was based upon the best interest of the ward or conservatee, and did not harm the ward or conservatee, the court may reduce the compensation instead of wholly denying it. 

Under Probate Code section 2653, courts are now required to award petitioners costs, including attorney’s fees, on successful petitions to remove a guardian or conservator for cause. 

You can find a full summary of notable 2021 legislation in the upcoming 28.1 edition of the Trusts and Estates Quarterly out this March.


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