Everything You Need to Know About Guardianship, Conservatorship, and Legal Dependents

Guardianship vs. Conservatorship

These two terms mean different things in different states. However, both are legal proceedings that make one person (the guardian or conservator) responsible for the affairs of another person (the ward).

Often, a guardianship involves a ward who is a minor, and conservatorship involves a ward who is an adult. But sometimes guardianship refers to authority over a ward's day-to-day decisions, while conservatorship refers to control over a ward's financial choices. You can find out how your state defines these terms via the American Bar Association's Adult Guardian Handbooks by State.

Guardianship of a Minor

Worst-case scenarios are difficult to think about. We never want to picture leaving our children behind. But if you do have minor children, it's in their best interest for you to designate a legal guardian in your will. That way, if you were to pass unexpectedly (and no other legal guardian, such as another parent, were alive), then your children would be under the loving care of the trusted person you've designated. Otherwise, a court would be left to decide the care of your children.

If you're the caring adult of a minor in need of guardianship, you can file a petition in court to become the child's legal guardian. Each state has its own procedures and forms for filing. People file petitions for guardianship for a variety of reasons. Examples include, in cases of abandonment, when the child's parents have consented to guardianship, or when parental rights have been terminated.

Conservatorship of an Adult

Conservatorships are intended for when an adult is incapacitated at some level and cannot make their own informed decisions about medical care, money, or daily living. Reasons for a conservatorship may include when an adult has dementia, has had a stroke, or has severe mental illness or disability.

If you have a loved one you think needs a conservatorship, you should consult an attorney to help you choose the right type and to file the proper paperwork. An attorney can also provide legal advice on alternative solutions if possible, such as durable power of attorney.

The American College of Trust and Estate Council (ACTEC) has a list of options for advanced planning with loved ones to avoid conservatorship down the road. Some alternatives may be more favorable to conservatorship because they empower the individual to make choices about care and finances before they potentially become incapacitated.

Only a court can grant a conservatorship after hearing evidence that an adult lacks mental capacity and needs the help of a conservator, according to the National Academy of Elder Law Attorneys (NAELA).

If someone has filed a petition seeking conservatorship for you, you have the right to an attorney, either someone you hire or a court-appointed one. A lawyer can help you object to the petition for the conservatorship or even take action for you to choose your own conservator if necessary.

Legal Dependents

The term "legal dependent" may also refer to a few different concepts. For tax purposes, a legal dependent is a qualifying child or relative whom a taxpayer claims on their taxes. A qualifying child must be under 19 or under 24 if they are a full-time student. A qualifying child can also be any age if they're considered permanently disabled.

A qualifying relative can be any age, and they don't necessarily have to live with you. For example, if you have a parent whose gross income is quite low and you provide that parent with more than 50 percent of their total support for the tax year, you can potentially claim them as a dependent on your taxes. Their income must be lower than the designated threshold amount. For the 2020 tax year, the threshold was $4,300.

Claiming a qualifying adult relative as a legal dependent on your taxes can be beneficial for reducing your income tax burden (through deductions and tax credits) or for adding a relative to your health insurance policy.

In some cases, legal dependent is a term used to describe someone who relies on another for support. And the designation can be used to enforce that help, as in the case of child support payments.

The Bottom Line

Even with a better understanding of the differences between guardianship, conservatorship, and legal dependents, these situations can be tricky.

Consult an attorney or a CPA to help. They're trained to navigate the complex paperwork, offer alternative solutions if needed, and ensure everything is handled to the letter. That way, you can concentrate on taking care of your loved ones.