What is a Conservatorship? | IRS Definition of a Conservatorship
Sometimes an individual is not able to take care of their own financial or legal responsibilities. This can be because someone has aged, because they have a physical incapability (such as being in a coma), or because they have a mental disability. A conservatorship lets someone else become their guardian.
Conservators will maintain the individual’s accounts, but the individual’s assets still remain their own. Their assets will be reported against their own EIN and they will pay taxes on it. The conservator will simply have access to maintain and manage the accounts.
Conservators are required to manage the individual’s accounts to their best interests. If the conservator is found to be making decisions that aren’t in the person’s best interests, they can be considered liable. Sometimes a conservatorship is permanent. Other times, it’s until the conservatee is able to manage their finances again, often when they have recovered from an ailment that prevented them from doing so.
Apart from individuals, it’s possible for someone to act as a conservator for a business, because a business can also be legally similar to a person. This can happen if the business has some issues, such as going through bankruptcy, and needs help restructuring.