On September 30, 2021, Governor Gavin Newsom signed California AB 1194 amending numerous statutes pertaining to conservatorships.  The following are highlights:

Internet Posting of Fees of Licensed Professional Fiduciary:  On or before January 1, 2023, an individual licensed as a professional fiduciary (LPF) by the State of California, and who has an internet website, is required to post on their website a schedule or range of the LPF’s fees, including, but not limited to, the LPF’s hourly rate for services rendered.

If the LPF does not have an internet website, the LPF is required to provide a prospective client, before the execution of a contract for services, a schedule or range of the LPF’s fees, including, but not limited to, hourly fees, for services offered.  The same information is also required to be provided to a current client, upon that client’s request.  If the prospective or current client is a proposed or current conservatee, then, in addition to the client, the LPF is required to provide the information to the proposed or current conservatee’s spouse and all relatives within the second degree.

Investigation of LPF:  The California Professional Fiduciary Bureau (Bureau), on its own, or shall, upon receipt of a complaint from any person, investigate the actions of a LPF.  The Bureau shall investigate a LPF’s alleged violation and any other complaint referred to it by the public, a public agency, or the Department of Consumer Affairs.  A mandatory sanction is imposed if the Bureau finds that the LPF did any of the following:

  • Breached a legal or fiduciary duty to a client and thereby caused financial or physical harm or mental suffering to the client
  • Abused an elder or a dependent adult client
  • Violated an applicable statute or regulation

The above includes all of the following referrals:

  • A report from a court that the court has taken any of the following actions: (1) imposed a penalty on the LPF, such as surcharge, punishment for contempt, suspension, or removal; (2) removed the LPF as a conservator or guardian for cause; (3) determined that the LPF has abused a conservatee, with “abuse” as defined in the Welfare and Institutions Code, i.e., physical abuse, neglect, abandonment, isolation, abduction, or other treatment with resulting physical harm or pain or mental suffering; the deprivation by a care custodian of goods or services that are necessary to avoid physical harm or mental suffering; and financial abuse.
  • Receipt of a certified copy of a judicial or administrative finding that a LPF’s violation of law, breach of fiduciary duty, or abuse, caused harm to a conservatee or ward in their care.

Sanctions shall include administrative citations and fines, or license suspension, probation, or revocation.  Revocation is required if the Bureau finds that the LPF did either of the following:

  • Knowingly, intentionally, or willfully breached a legal or fiduciary duty to an elder or dependent adult client that constitutes abuse of the client, as defined above; or
  • Caused serious physical or financial harm or mental suffering to a client through gross negligence or gross incompetence.

What is interesting about the above modification of Business and Professions Code section 6580 is that the Bureau is mandated to conduct an investigation for “any complaint referred to it by the public.” Given the vocal Free Britney movement, this would seem, for example, if a LPF was appointed as a conservator for Britney Spears, any member of the public could submit a complaint to the Bureau and the Bureau would be compelled to investigate the complaint.

Potential Penalties for Both LPF and non-LPF Conservators.  If the court finds that a conservator who is a LPF has abused a conservatee, the conservator shall be liable for a civil penalty of up to ten thousand dollars ($10,000) for each separate act of abuse, payable to the estate of the conservatee.  For a conservator who is not a LPF, the penalty shall not exceed $1,000 for each separate act of abuse.

Any act of a LPF for which the court imposes a penalty, including, but not limited to, surcharging, punishing for contempt, suspending, or removing the LPF for cause, shall be reported by the court to the Bureau.

Ex Parte Communications:  Probate Code section 1051 prohibits “ex parte” (essentially, “one side”) communications between any party, or the attorney for that party, and the court, in the absence of a stipulation between the parties.  This means, for example, that an attorney cannot speak with the court about the pending matter without the attorney for the other party being a participant as well.  Probate Code section 1051 has been amended to provide that, if the court does receive an ex parte communication, it may refer to the court investigator, or take other appropriate action in response to that communication if it relates either to (1) a fiduciary and the performance of their duties and responsibilities, or (2) a person who is the subject of a conservatorship or guardianship.  The court would be required to disclose the ex parte communication to all parties, except if good cause exists to dispense with the disclosure if necessary to protect the ward or conservatee from harm.

Appointment of Legal Counsel for the Conservatee.  Currently, if the court considers it necessary, it will appoint counsel to represent a conservatee or a proposed conservatee.  Depending upon the County, this could be the Public Defender or a panel or list of attorneys who have volunteered for such appointment and have met the legal requirements to be appointed in such cases.  AB 1194 provides that, if a conservatee, proposed conservatee, or person alleged to lack legal capacity expresses a preference for a preferred attorney, the court shall allow representation by the preferred attorney, even if that attorney is not on the court’s list.  The attorney is required to provide “zealous representation” unless the attorney determines that he or she cannot do so.  In that case, or in the case where the attorney has any conflict of interest with respect to the representation of the conservatee, the attorney is disqualified.  This means that the attorney is not permitted to substitute his or her judgment for that of the conservatee.  The attorney’s duties are to represent the wishes of their conservatee client.

Medical Reports.  The probate court investigator assigned to investigate the pending conservatorship petition now is required, in addition to their other duties, to gather and review relevant medical reports from the proposed conservatee’s primary care physician and other relevant mental and physical health care providers.

Court Review of Conservatorship.  Six months after establishment of the conservatorship, the court investigator shall visit the conservatee and conduct an investigation and report its findings to the court.  If appropriate, the court now is empowered to order the conservator to submit an accounting.  In addition, the court may consider holding a hearing to terminate the conservatorship.

On any review of the conservatorship by the court investigator, the investigator shall determine if the conservatee wishes to remove the conservator and appoint a successor conservator.  In addition, the court investigator shall determine whether the conservatee still meets the criteria for a conservatorship and if the conservatorship remains the least restrictive alternative needed for the protection of the conservatee.

Request to Court for Investigation of Abuse:  A new statute has been added, Probate Code section 1851.6, which allows any “interested person” or any person entitled to receive notice of the petition to establish conservatorship to petition the court to investigate an allegation of abuse.  The court is required to investigate all such allegations that establish a prima facie (“first impression) case of abuse.

Termination of Conservatorship.  For both a limited and general conservatorship, if a hearing is held to consider the termination of the conservatorship, the conservatee is to appear at the hearing unless excused because he or she is out of state and is not the petitioner, is unable to attend due to medical inability, or the court investigator reports that the conservatee (i) is not willing to attend the hearing, (ii) does not wish to contest the continuation of the conservatorship, and (iii) does not object to the current conservator or prefer that another person act as conservator, and the court makes an order that the conservatee need not attend the hearing.

The court is required to terminate the conservatorship unless it finds, by clear and convincing evidence, that (1) the conservatee still meets the criteria for appointment of a conservator; and (2) a conservatorship remains the least restrictive alternative needed for the conservatee’s protection.

Elimination of Filing of Original Account Statements.  Currently, if the conservator is a LPF, when the LPF files their accounting with the court, the LPF is required to file all original account statements or verified electronic statements covering the entire period of the accounting. This requirement now has been eliminated, leaving in place only the requirement, imposed on all conservators, that the account statement showing the account balance at the close of the account period be submitted.  If it is the first account, then the originals of the account statements immediately preceding the establishment of the conservatorship also must be submitted.

Fees.  AB 1194 imposes a new criteria on the court’s consideration of a petition for payment of the conservator’s fees and fees to the conservator’s attorney – the court must determine that the compensation requested is “in the best interest” of the conservatee. And, if the conservator unsuccessfully defends “any action made by, or on behalf of” the conservatee, the conservator shall receive no compensation for the unsuccessful defense, unless the court determines, by clear and convincing evidence, that the defense, opposition, or other action was made in good faith, was based upon the best interest of the conservatee, and did not harm the conservatee.  In such circumstances, the court may reduce the compensation instead of denying it completely.

In addition, if a conservator is removed for cause, the court shall award the petitioner all costs and expenses of the litigation, including attorneys’ fees, and the conservator is not permitted to deduct from or charge to the conservatee’s estate the costs of opposing the removal.

Caveat:  Unless a conservator is absolutely certain that his or her opposition to any request of the conservatee, or any petition requesting his or her removal is without merit, that conservator’s best course of action is to resign.

It is important to note that several of these new requirements, such as making a referral to the court investigator are subject to funding.  The court is not required to perform any of the duties relating to the amendments in the statutes until the Legislature makes an appropriation identified for that purpose.

California conservatorships have been under intense scrutiny for at least the past year.  To address the concerns which have been raised, AB 1194 also requires the Judicial Council to conduct a study measuring court effectiveness in conservatorship cases and to report its findings to the Legislature.  The deadline for the report is January 1, 2024.

Conservatorships are complex proceedings and involve curtailment on individual rights.  However, they also are necessary to protect California’s vulnerable individuals.  A balance must be achieved so that individual rights are protected, while also not discouraging the establishment of conservatorships by concerned individuals who are unwilling to take on the risk of possible sanctions and personally incurring fees.  It’s like agreeing to do a firewalk and hoping not to get burned.