The following issues are often addressed by the Commissioner’s office:

1. How do I, as conservator, handle joint bank accounts in the name of the incapacitated and a spouse?
2. How should I set up bank accounts for the conservatorship?
3. What about jointly owned accounts with persons other than the spouse?
4. What about certificates of deposit?
5. What should the conservator do with jewelry?
6. How does the conservator handle real estate?
7. What happens upon the death of the incapacitated adult?
8. I have a small amount of money remaining and no one has qualified to receive the remaining assets.
9. I left assets off of the inventory which should have been included.
10. What values do I use for personal property and real estate?
11. I have prepared the account but I cannot get it to balance.
12. If I hire a CPA or Attorney how do I pay the expenses?
13. I don’t have supporting vouchers for all of my disbursements.
14. The bank opened a non-interest bearing business checking conservatorship account.
15. I would like to borrow money from the conservatorship and I will pay interest.
16. I have health care providers who want to be paid in cash only.

Questions and Answers

1. How do I, as conservator, handle joint bank accounts in the name of the incapacitated and a spouse?
   
   Accounts jointly held should be considered as owned by the parties on a 50/50 basis.  The incapacitated person’s 50% interest should be shown on the inventory as an asset under the control of the conservator.  The interest earned on the account should likewise be treated as a 50/50 division.  The account should be split and deposited by the conservator in a conservatorship account preserving the pay on death designation that was on the account prior to the separation of the account.  For example, if the account was payable on death to the spouse, the new account should also be payable on death to the spouse.

2. How should I set up bank accounts for the conservatorship?
   
   All accounts set up by the conservator should reflect the incapacitated person’s name by the conservator and should reflect the incapacitated person’s social security number.  For example, if Mary Doe is appointed as conservator for her husband and the two had a joint account, 50% of that account should be divided and placed by Mary in an account in the name of John Doe, by Mary Doe his conservator.  Due to the fact that the account prior to the appointment was payable on death to Mary, the new account should also be payable on death to Mary.  If not, no designation should be made on the account.  Accounts should not be made payable to a beneficiary selected by the conservator.

3. What about jointly owned accounts with persons other than the spouse?
   
   If the funds are the funds of the incapacitated adult and the addition of another person to the account has been a matter of convenience only, those assets should be placed in the conservatorship account with 100% going to the incapacitated account.

   If evidence can be shown of ownership on some proportionate basis, that ownership would be appropriate.  When the new account is established, a survivorship designation previously made by the incapacitated adult should be preserved if possible.  If no survivorship provision applied to the account prior to the Court appointment, no beneficiary should be designated on the conservatorship account.

4. What about certificates of deposit?
   
   Certificates of deposit should be left until maturity.  If they are jointly held with a spouse they should also be divided on a 50/50 basis at maturity.  If a new certificate of deposit is purchased, the survivorship should be preserved.  If the account is solely in the name of the incapacitated adult and the certificate of deposit matures and is reinvested the survivorship existing on the original account should be preserved on the new account.  A different beneficiary should not be designated.

5. What should the conservator do with fine jewelry?
   
   The conservator is required to protect and preserve all assets of the incapacitated adult.  Fine jewelry, unless there is a strong insistence by the incapacitated adult that it be worn, should be preserved in a safe deposit box or other safe location and should be adequately protected by insurance against loss or theft if kept somewhere else.  Problems routinely arise upon the death of an incapacitated person about missing jewelry.  It is in the conservator’s best interest to list every item of jewelry and to preserve it for the incapacitated adult’s  estate for the conservator’s own protection.  If the incapacitated adult insists upon wearing the jewelry, unless it is unreasonable to allow that to occur, the conservator should make note of all items worn by the incapacitated and make provision for adequate insurance in the event of loss or theft.

6. How does the conservator handle real estate?
   
   If the incapacitated is living in the real estate it is appropriate to retain the real estate and to pay the costs  associated with maintaining the property as an expense of the estate.

   However, if the incapacitated person resides elsewhere, the conservator should consider the sale of the home in order to maximize its value to the estate and to protect it against damage as a result of its vacation or loss by fire.  Continued payment of expenses on a vacant home, including utilities, insurance, taxes and maintenance fees is generally not appropriate unless the incapacitated is expected to return home and is a drain on the estate that may be needed for  maintenance and support of the incapacitated.  The conservator should consult the order to determine if the power of sale exists and if so, under what circumstances a sale may be made.

   Generally, the prior approval by the Commissioner of Accounts of any proposed sale of an incapacitated person’s real estate is required.
    
   You should review the requirements set forth in the conservatorship material under real estate before signing a contract or listing agreement, and after obtaining a contract that is “subject to the approval of the Commissioner of Accounts”, furnish the information required to the Commissioner.
   

7. What happens upon the death of the incapacitated adult?
   
   The authority of the conservator terminates; however, the conservator has the obligation to preserve, protect, manage and account for the estate of the incapacitated adult until the delivery to the qualified personal representatives of the decedent’s estate.  The conservator, of course, has an obligation to file a final accounting through the date of distribution of the final assets under his control to the personal representative.

   No disbursements from the estate of the incapacitated  person should be paid by the conservator after the death of the incapacitated person.  Any expenses for administration including final commission payable to the conservator, costs associated with preserving the estate and/or Commissioner of Accounts and Clerk of Court fees should be paid by the estate of the formerly incapacitated adult unless there is no qualificiation on the deceased incapacitated’s estate, in which event the Commissioner should be consulted by written letter. See the following answer.

8. I have a small amount of money remaining and no one has qualified to receive the remaining assets of the now deceased incapacitated.

   If there has been a Court qualification of a personal representative of the estate, any remaining assets are properly payable to that person who will give you a lawfully authorized notarized receipt.

   Where no one has qualified to administer the estate of a now deceased incapacitated adult within 60 days; no one is expected to qualify; and the value of that estate in the custody of the conservator is $25,000.00 or less, the conservator may pay the estate to the incapacitated person’s surviving spouse, or if none, to the distributees or other persons entitled to the estate including a funeral home or burial service.  Section 64.2-2026, Code of Virginia(1950), as amended.  Be sure final filing fees and/or compensation are considered before disbursing remaining assets. A Small Estate Affidavit (Section 64.2-601, Code of Virginia) is required by the Commissioner if there has been no qualification on the deceased incapacitated’s estate and none is expected.

   Be sure to obtain notarized receipts for the payments made. If the above section applies, be certain that you are paying to the proper heirs at law or appointed successor under the Small Estate Affidavit. You should consult the above referenced statutory provision, the course of descents in intestacy (see link on the top right hand side of this page), and seek the advice of an estate or elder law attorney to be sure the Commissioner will approve your final disbursements and distributions.

9. I left assets off of the inventory which should have been included.
   
   Generally these assets are reported by entering the date of qualification value of the omitted asset on line 4 ( adjustments) of the next account to be filed. You may file an amended Inventory if you are adding multiple assets. The addition of the assets may result in an increased bond requirement as determined by the Commissioner.

10. What values do I use for personal property and real estate?
    
    For tangible personal property including cars, furniture, collections, boats, tools and equipment and other items of personal property you will use the fair market value. This may be determined from trade journals, internet sources, the NADA valuation for automobiles or in the case of ordinary and customary household items by reasonable estimate of auction or backyard sale value. The expense of appraisals is not necessary and would be a waste of money.

    Bank accounts and stocks and bonds are valued as of the date of qualification.  Get those values and copies of the account statements from the bank or the broker handling the brokerage account. Request a listing of the number of shares and per share value of each stock from the broker and attach the list to the inventory.             

    Real estate is valued at the tax assessed value in the absence of an appraisal.  An appraisal should not be obtained unless and until you intend to petition the Commissioner of Accounts for approval of a proposed sale of the property. You may call 804-755-7380 and obtain the current tax assessed value or go online to the county real estate assessment page to obtain current assessed values.

11. I have prepared the account but I cannot get it to balance.
    
    Every account must balance before it is filed with the Commissioner. If you cannot balance the account based on the instructions provided by the court and on this website, you should engage a CPA or elder law Attorney to assist you in preparing a balanced account.

12. If I hire a CPA or Attorney how do I pay the expenses?
    
    If the conservator needs to hire an attorney to obtain advice on a legal matter or representation of the incapacitated personally or for some legal matter not normally handled by the conservator, the reasonable costs associated with such services are allowed as a cost of the conservatorship.

    If, however, the conservator hires the attorney to do the conservator’s work, such as preparation of the inventory or a non-complicated account, the fees will be charged against any compensation due to the conservator.

    The Henrico Commissioner will approve reasonable CPA fees incurred for the preparation of tax returns as that work is considered outside of the general responsibility of a conservator. No deduction is made against the conservator’s commission for reasonable tax related fees.

13. I don’t have supporting vouchers for all of my disbursements.
    
    This is a very troublesome situation and normally results in the disbursement being disallowed and the conservator being required to pay back to the conservatorship estate the amounts not substantiated by proper vouchers, paid receipts and cancelled checks.  Therefore it is essential that the conservator have an invoice for every bill paid and a cancelled check verifying payment. Do not pay any bills in cash or without a proper bill. Each disbursement requires a receipt no matter how insignificant you may think the disbursement is. If you are purchasing gas to take the incapacitated to medical appointments, receipts are required.
    
    Keep every piece of paper you receive associated with the conservatorship and get a receipt for each and every payment made from the incapacitated’s estate, or for which you intend to seek reimbursement.

14. The bank opened a non-interest bearing business checking conservatorship account.
    
    If you have minimal cash assets this type of account is proper; however, if you will have substantial cash assets on deposit, interest on the account should be accruing to the conservatorship estate.

    By statute you are required to invest cash assets under your control in an interest bearing account within 4 months of receipt of the cash asset. Failure to do so results in interest being charged personally to the conservator. If the amount on deposit costs a monthly service fee, look for the type of acount which results in the least cost to the estate.
                                            
    Consider maintaining a reasonable balance in a interest checking account and cash assets not immediately needed to provide for the incapacitated in a higher yielding money market account or, if feasible, in a certificate of deposit, remembering that withdrawal penalties are to be avoided.

15. I would like to borrow money from the conservatorship and I will pay interest.
    
    THIS IS ABSOLUTELY PROHIBITED. ANY SELF DEALING OR TRANSACTION WHICH BENEFITS YOU OR YOUR FAMILY OTHER THAN AS ALLOWED BY THE COURT ORDER OR LAWS OF THE COMMONWEALTH WILL BE DISAPPROVED.

16. I have health care providers who want to be paid in cash only.
    
    This is a prohibited procedure. All payments to health care providers (and all others) should be made by check drawn on the conservatorship checking account for tax and accounting reasons. Seek proper advice regarding the employment of health or daycare providers as there are Social Security considerations which must be evaluated so as not to expose the estate to taxes, matching social security payments and other issues.

    If a cash payment must be made, a notarized receipt signed by the recipient shall be presented with the account or the disbursement will be disallowed.  The receipt must be specific and state the dates of service, hours and hourly compensation paid.