What Exactly Is a Conservatorship?
July 27, 2018AAPM Tips, Conservator, Conservator Responsibilities, Conservatorship, Guest Post,
What Exactly Is a Conservatorship?
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| What Exactly Is a Conservatorship? (Photo Credit: Pixabay) |
A conservatorship is a legal arrangement in which an individual is appointed to manage the legal and financial affairs of a person who is unable to do so independently, such as a minor or one who is incapacitated. The responsibilities of the conservator include filing federal and state taxes on that person's behalf using the IRS-EIN-Tax-ID.
How Conservatorships Are Established
A court order is required to create a conservatorship for either a minor or a person who has physical and mental disabilities that make independent legal and financial management impossible. This may include individuals who have Alzheimer's disease or other forms of dementia as well as those who have a severe mental illness with psychosis or suicidal tendencies. The conservatorship must be supported with the testimony of the person's physician, psychologist or psychiatrist for the court's decision to be valid.
Conservator Responsibilities
When a conservator is appointed for an incapacitated individual, he or she has the following financial responsibilities:
- Investigating the individual's liquid assets and appointing a financial advisor to invest them on his or her behalf
- Deciding whether to buy or sell real estate, vehicles, and other assets
- Paying the person's bills
- Filing the person's income tax returns
- Deciding where the individual will live and overseeing necessary care
- Filing annual reports about the care and oversight provided
- Requesting court approval for decisions as required
- The Tax Impact of Conservatorship
If you are a conservator, you must apply for an EIN number with the IRS to file taxes on behalf of the conservatorship. Using this ID number, you can file the individual's Form 1040 for federal income taxes. You must also file Form 56, Notice Concerning Fiduciary Relationship, which lets the IRS know that you are the court-appointed conservator for the taxpayer in question.
Contact IRS-EIN-Tax-ID to apply for an estate tax ID number or EIN. With our secure online application, you can complete IRS Form SS-4 in minutes and receive your EIN via email. If you apply before 7 p.m. EST, you'll have your tax ID number the same day with no associated rush fee.
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