Conservatorship

Terminology varies, and some states or jurisdictions may refer to a conservator as a guardian of the estate or as a trustee.

Conservatorships are generally put in place for people who are significantly disabled by mental illness, elderly individuals who lack mental capacity due to medical conditions such as dementia, or individuals with developmental disabilities who lack the capacity to manage their own affairs.

Generally, a conservator or guardian over the estate is only appointed if the conservatee has assets that need to be protected, marshalled, and managed.

If the proposed conservatee or ward is unable to have an attorney-client relationship because of some impairment, the court may appoint a guardian-ad-litem (who is often also an attorney).

In an LPS conservatorship, a court-appointed conservator over the person is responsible for managing the conservatee's placement, medical decisions, and mental health treatment.

This type of guardianship in Korea gives near total power over the ward to the Adult Guardian.

A general adult guardian is one who is in charge of both the ward's financial interests and personal welfare.

The Korean family court, or one of its branches, has authority over the ward's address and will hear the guardianship case.

[14] Robert Ramsey and John Head, law professors who both specialise in financial issues, suggest that an insolvent bank should go into receivership rather than conservatorship to guard against false hope and moral hazard.

Again, in the U.S. at the federal level, in September 2008, the chief executive officers and board of directors of Fannie Mae and of Freddie Mac were dismissed.

Then, the companies were placed into the conservatorship of the Federal Housing Finance Agency (FHFA) via the determination of its director James B. Lockhart III, with the support and financial backing of U.S. Treasury via Treasury secretary Hank Paulson's commitment to keep the corporations solvent.

[16] The intervention leading to the conservatorship of these two entities has become the largest in government history, and was justified as necessary step to prevent the damage to the financial system that would have been caused by their failure.

[17][18][19][20] An even more ambitious use of the conservatorship model has been proposed by Duke University professors Lawrence Baxter, Bill Brown, and Jim Cox.

They suggest that the troubled U.S. banks be placed in conservatorship, that some of their "good assets" be dropped into newly created "good bank" subsidiaries (presumably under new management), and the remaining "bad assets" be left to be managed under the supervision of a conservatorship structure.