ASSEMBLY, No. 4615

STATE OF NEW JERSEY

219th LEGISLATURE

 

INTRODUCED SEPTEMBER 14, 2020

 


 

Sponsored by:

Assemblywoman  CAROL A. MURPHY

District 7 (Burlington)

Assemblyman  RONALD S. DANCER

District 12 (Burlington, Middlesex, Monmouth and Ocean)

Assemblywoman  VALERIE VAINIERI HUTTLE

District 37 (Bergen)

 

Co-Sponsored by:

Assemblywomen Dunn, Gove and Speight

 

 

 

 

SYNOPSIS

     Revises and updates law pertaining to conservatorship to encourage ethical conduct by conservators and to provide stronger protections for conservatees and proposed conservatees.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning conservatorship arrangements and amending various sections of the New Jersey Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    N.J.S.3B:13A-1 is amended to read as follows:

     3B:13A-1.  [a.]  "Conservatee" means a person who has not been [adjudicated] adjudged to be incapacitated, but who, by reason of advanced age, illness, or physical infirmity, [is] has been found by a court to be unable to care for or manage property or [has become] to be unable to provide self-support or support for others who depend upon that support.

     [b.]  "Conservator" means a person appointed by the court to manage the estate of a conservatee.

     “Conservatorship” means an arrangement, ordered by the court, pursuant to which a conservator is authorized to manage the estate of a conservatee.

     “Proposed conservatee” means a person who is alleged to be unable to care for or manage property, or to be unable to provide self-support or support for others who depend on such support, due to advanced age, illness, or physical infirmity, but who is not yet subject to a conservatorship established by the court.

(cf:  P.L.2013, c.103, s.40)

 

     2.    N.J.S.3B:13A-2 is amended to read as follows: 

     3B:13A-2.  a.  The Superior Court [may], in a civil action brought [by the conservatee or some other person in his behalf] pursuant to this chapter, may appoint a conservator to manage the estate of a conservatee[, except that if]

     b.    A civil action for conservatorship may be brought either by the proposed conservatee or by another person, identified in N.J.S.3B:13A-5, who is acting on behalf of the proposed conservatee. 

     c.     In any case in which the proposed conservatee objects to the imposition of a conservatorship, a conservator shall not be appointed.

(cf:  P.L.1983, c.192, s.1)

 

     3.    N.J.S.3B:13A-3 is amended to read as follows:

     3B:13A-3.  a.  A conservatee or proposed conservatee shall be represented by counsel throughout the course of conservatorship proceedings and, if a conservatorship is established, until such time as the conservatorship is terminated.

     b.    Counsel shall personally interview the conservatee or proposed conservatee, as the case may be, not more than 72 hours before each scheduled hearing related to conservatorship, and shall certify to the court that the interview has been performed. 

     c.     If the conservatee or proposed conservatee is, at any time, not represented by counsel and is unable to afford counsel, the [The] court shall [have the right to] appoint counsel [for the proposed conservatee if it believes that counsel is necessary to adequately protect the interests of the conservatee] therefor.

(cf:  P.L.1983, c.192, s.1)

 

     4.    N.J.S.3B:13A-4 is amended to read as follows:

     3B:13A-4.  [The] A conservatee or proposed conservatee shall be present at [the] each hearing relating to the conservatorship unless [he] the person is unable to attend by reason of physical or other inability[, and that inability is] established to the satisfaction of the court.  [If] Whenever it is alleged that the conservatee or proposed conservatee is [found to be] unable to attend a hearing related to the conservatorship, the court shall, subject to [rules of court] the Rules of Court, order an investigation to be conducted to [assure] confirm that the conservatee [does not object to the conservatorship unless] or proposed conservatee is incapable of attending the hearing.  An investigation shall be ordered and conducted, pursuant to this section, regardless of whether the court believes[, in its discretion,] that the interests of the conservatee or proposed conservatee are adequately represented and protected by counsel [representing the conservatee].

(cf:  P.L.1983, c.192, s.1)

 

     5.    N.J.S.3B:13A-5 is amended to read as follows:

     3B:13A-5.  [By whom action for appointment of conservator in behalf of conservatee may be brought.  An] A civil action for the appointment of a conservator may be brought by the proposed conservatee, as provided in [section] N.J.S.3B:13A-2, or [in] may be brought, on the proposed conservatee's behalf, by: 

     a.     [His] the spouse of the proposed conservatee;

     b.    [His] the adult children of the proposed conservatee or, where there are [none] no adult children, the person or persons who are closest in degree of kinship to the proposed conservatee;

     c.     [Any person having concern for the financial or personal well-being of the conservatee;] (Deleted by amendment, P.L.    , c.    ) (pending before the Legislature as this bill)

     d.    [A] a public agency or a social services official of the State or [of the] county in which the proposed conservatee resides, regardless of whether or not the proposed conservatee is a recipient of public assistance; [or]

     e.     [The] the chief administrator of a State licensed hospital, school, or institution in which the proposed conservatee is a patient or from which [he] the proposed conservatee receives services[.]; or

     f.     [The] the chief administrator of a non-profit charitable institution in which the proposed conservatee is a patient or from which [he] proposed conservatee receives services.

(cf:  P.L.1989, c.329, s.1)

 

     6.    N.J.S.3B:13A-6 is amended to read as follows:

     3B:13A-6.  Notice of the action to appoint a conservator shall be served upon the following persons:

     a.     The proposed conservatee unless he is the plaintiff;

     b.    The spouse and adult children of the proposed conservatee or, where there are [none] no adult children, [upon] the person or persons who are closest in degree of kinship to the proposed conservatee; and

     c.     The person with whom the conservatee resides[,] or, if the conservatee resides in an institution, [upon] the chief administrator of that institution.

(cf:  P.L.1983, c.192, s.1)

 

     7.    N.J.S.3B:13A-7 is amended to read as follows:

     3B:13A-7. The persons receiving notice pursuant to N.J.S.3B:13A-6 [may, upon approval of the court and in the interest of the conservatee,] shall be entitled to appear at all hearings and be heard [concerning] on all matters relating to the conservatorship. When making any material determination related to the conservatorship, the court shall consider, and shall determine the relevance and credibility of, and the weight to be given to, any testimony or other evidence provided by such persons. 

(cf:  P.L.1983, c.192, s.1)

 

     8.    N.J.S.3B:13A-17 is amended to read as follows:

     3B:13A-17.  [A] a.  At time intervals ordered by the court, but not less often than every six months during the course of a conservatorship, the conservator [may, and if required by the court] shall[,] file with the clerk of the court, under oath:

     (1)   an inventory[, under oath, of] identifying and appraising all of the real and personal property [which] that has come into [his] the conservator’s hands or control or has come into the hands of any other person [for him], on the conservator’s behalf, during the reporting period, under the auspices of the established conservatorship arrangement; and

     (2)   a formal accounting showing each expenditure and disbursement that has been made by the conservator from the conservatee’s estate during the reporting period

     b.    The court shall not require an initial inventory and [appraisement] accounting statement to be filed under this section until [3] at least three months have elapsed after the grant of letters of conservatorship.

     c.     The court shall review the inventories and accounting statements submitted pursuant to this section, on at least an annual basis, to ensure that the conservator is properly fulfilling the conservator’s duties with respect to the conservatee and is operating in a manner consistent with the conservatee’s best interests.  The court may, at any time, and shall, whenever an inventory or formal accounting submitted pursuant to this section indicates that the conservator may not be properly fulfilling the conservator’s duties or acting in the conservatee’s best interests, appoint a third-party to interview the conservatee and conservator and to undertake any other investigation the court may direct.

(cf:  P.L.1983, c.192, s.1)

 

     9.    N.J.S.3B:13A-18 is amended to read as follows:

     3B:13A-18.  a.  A conservator may expend or distribute so much or all of the income or principal of the conservatee for [his] the support, maintenance, education, care, general use, and benefit [and for the support, maintenance, education, general use and benefit] of [his] the conservatee and the conservatee’s dependents and other household members, in the manner, at the time or times, and to the extent, that the conservator, in an exercise of a reasonable discretion, deems suitable and proper, taking into account the requirements of the “Prudent Investor Act,” P.L.1997, c.36 (C.3B:20-11.1 et seq.) and the considerations specified in N.J.S.3B:13A-19 and N.J.S.3B:13A-20. 

     b.    The expenditure or distribution of funds pursuant to this section may occur either with or without court order[, with or without regard to the duty or ability of]

     c.     In expending or distributing funds pursuant to this section, the conservator shall be authorized, but not required, to consider:

     (1)   whether any other person has the duty or ability to support or provide for the conservatee[,]; and [with or without regard to]

     (2)   whether there are any other sources of funds, income, or property [which may be] available for [any of those] the purposes specified in this section.

     d.    All decisions made by a conservator with respect to the expenditure or distribution of funds pursuant to this section shall be consistent with the conservatee’s best interests and the specified wishes and preferences of the conservatee, to the extent that the conservatee retains the capacity to express such wishes and preferences.

(cf:  P.L.1983, c.192, s.1)

 

     10.  N.J.S.3B:13A-19 is amended to read as follows:

     3B:13A-19.  a.  In making expenditures [under] and distributions pursuant to N.J.S.3B:13A-18, a conservator shall consider any recommendations relating to the [appropriate standard of] expenditure and distribution of funds for the support, education, care, general use, and benefit [for] of the conservatee, the conservatee’s dependents, and other members of the conservatee’s household, which are made by any [party set forth] person listed in N.J.S.3B:13A-6.  [He may not be surcharged]

     b.    The conservator shall be subject to pay a penalty surcharge for any sums that are paid or distributed thereby, pursuant to the recommendation of a person listed in N.J.S.3B:13A-6, to persons or organizations actually furnishing support, education, or care to the conservatee [pursuant to the recommendations of a parent, spouse, or heir of the conservatee unless he] if the recommendation resulting in the payment or distribution is clearly not in the ward’s best interests or the conservator knows that the [parent, spouse, or heir of the conservatee] person making the recommendation is deriving personal financial benefit therefrom[, or unless the recommendations are clearly not in the best interests of the conservatee].

(cf: P.L.1983, c.192, s.1)

    

     11.  N.J.S.3B:13A-20 is amended to read as follows:

     3B:13A-20.  In [making expenditures under] addition to considering the recommendations of the persons listed in N.J.S.3B:13A-6 as provided by N.J.S.3B:13A-19, [the] whenever a conservator [shall expend or distribute sums reasonably necessary] makes an expenditure or distribution of funds for the support, education, care, general use, or benefit of the conservatee [with], the conservatee’s dependents, or other members of the conservatee’s household, the conservator shall give due regard to:

     a.  [The]  the size of the conservatee's estate;

     b.  [The]  the probable duration of the conservatorship and the likelihood that the conservatee, at some future time, may be fully able to manage [his] the conservatee’s own affairs and the estate [which] that has been conserved for [him] the conservatee; [and]

     c.  [The]  the accustomed standard of living of the conservatee, the conservatee’s dependents, and other members of [his] the conservatee’s household;

     d.    the best interests of the conservatee; and

     e.     the wishes and preferences of the conservatee, to the extent that the conservatee is capable of expressing those wishes and preferences.

(cf:  P.L.1983, c.192, s.1)

 

     12.  N.J.S.3B:13A-27 is amended to read as follows:

     3B:13A-27.  [The] A conservator shall [present to] annually provide the conservatee with an [annual] informal report or accounting statement setting forth the [collection and disposition of] income and other assets within the conservator's control that have been collected and expended or otherwise distributed by the conservator during the preceding year.  The annual informal report or accounting statement shall also be filed with the court and made available, upon request, for inspection by any party set forth in N.J.S.3B:13A-6.  [In addition, the court may order, upon a showing of good cause by the conservatee, a full accounting by the conservator of all the conservatee's assets within the conservator's control]  The annual informal report or statement distributed by a conservator under this section shall be supplemental to the formal inventories and accounting statements that are submitted to the court, under oath, pursuant to N.J.S.3B:13A-17.

(cf:  P.L.1983, c.192, s.1)

 

     13.  N.J.S.3B:13A-32 is amended to read as follows:

     3B:13A-32.  If [the exercise of power concerning the estate is] a court finds that a conservator has breached the conservator’s fiduciary duties to the conservatee by taking an action that is outside the scope of the conservatorship arrangement or that violates the rights of the conservatee, contradicts or violates the conservatee’s best interests, or is otherwise deemed by the court to be improper for a fiduciary, the conservator [is] shall be liable to the conservatee or other interested persons for damage or loss resulting from breach of [his] fiduciary duty to the same extent as a trustee of an express trust.

(cf:  P.L.1983, c.192, s.1)

 

     14.  This act shall take effect immediately.

 

 

STATEMENT

 

     This bill revises the law pertaining to conservatorship arrangements in order to encourage ethical conduct by conservators and provide stronger protections for conservatees and proposed conservatees.  Specifically, the bill makes the following substantive changes to strengthen the existing conservatorship law:

     Existing law requires a court to appoint counsel for a proposed conservatee only if it believes that counsel is necessary to adequately protect the conservatee’s interests.  The bill would amend the law to require a conservatee or proposed conservatee to be represented by counsel throughout the course of conservatorship proceedings and, if a conservatorship is established, until such time as the conservatorship is terminated.  The bill would further require counsel to personally interview the conservatee or proposed conservatee not more than 72 hours before each scheduled hearing related to conservatorship and certify to the court that the interview has been performed.  If the conservatee or proposed conservatee is, at any time, not represented by counsel and is unable to afford counsel, the court will be required to appoint counsel for the person.

     Existing law requires a conservatee or proposed conservatee to be present at each hearing relating to the conservatorship unless the person is unable to attend by reason of physical or other inability established to the court’s satisfaction.  If it is alleged that the conservatee or proposed conservatee is unable to attend, the existing law requires the court to order an investigation unless the court believes, in its discretion, that the interests of the conservatee are adequately protected by counsel.  The bill would amend the existing law to require a court to order an investigation in any case where it is alleged that the conservatee or proposed conservatee is unable to attend the hearing in order to verify that the conservatee or proposed conservatee is, in fact, incapable of attending the hearing.  The investigation is to be ordered regardless of whether the court believes that the interests of the conservatee or the proposed conservatee are adequately represented and protected by counsel.

     Existing law authorizes a civil action for conservatorship to be filed either by the proposed conservatee or by one of the following individuals:  1) the spouse of the conservatee; 2) the adult children of the conservatee or, if there are no adult children, the person or persons who are closest in degree of kinship to the conservatee; 3) a public agency or social services official of the State or county in which the conservatee resides; 4) the chief administrator of a State licensed hospital, school, or institution in which the conservatee is a patient or from which the conservatee receives services; or 5) any other person having concern for the financial or personal well-being of the conservatee.  The bill would amend the law to remove the catch-all provision that allows a civil action to be filed by any person who has concern for the financial or personal well-being of the conservatee. 

     The bill provides that every person who is entitled by law to receive notice of a conservatorship proceeding, including:  1) the proposed conservatee; 2) the spouse and adult children of the conservatee or, if there are no adult children, the person or persons closest in degree of kindship to the conservatee; and 3) the person with whom the conservatee resides or, if the conservateee resides in an institution, the chief administrator of that institution, are entitled to appear at all hearings and be heard on all matters relating to the conservatorship.  Existing law authorizes such persons to appear at hearings and be heard on matters related to the conservatorship only if the court approves of such action and deems it to be in the interest of the conservatee.  Although the bill would entitle these persons to appear and present testimony and other evidence, it would preserve the court’s ability to use its discretion in determining the relevance and credibility of, and the weight to be given to, the testimony and evidence. 

     Existing law provides for a conservator to file with the clerk of court, under oath, an inventory identifying and appraising all of the real and personal property that has come into the conservator’s hands or control or has come into the hands of any other person, on the conservator’s behalf; however, such inventory need only be submitted if the court expressly requires such reporting.  The court is not currently required, by existing law, to review any inventory that is filed therewith.  The bill would amend the existing law to require a conservator, in all cases, to file with the clerk of court, under oath, at time intervals ordered by the court, but not less often than every six months during the course of a conservatorship, the inventory required by existing law, as well as a formal accounting that shows each expenditure and disbursement that has been made by the conservator from the conservatee’s estate during the reporting period.  The bill would further require the court to review the inventories and accounting statements submitted pursuant to the bill, on at least an annual basis, in order to ensure that the conservator is properly fulfilling the conservator’s duties with respect to the conservatee and is operating in a manner consistent with the conservatee’s best interests.  The bill authorizes the court, at any time, and requires the court, whenever an inventory or formal accounting indicates that the conservator may not be properly fulfilling the conservator’s duties or acting in the conservatee’s best interests, to appoint a third-party to interview the conservatee and conservator and to undertake any other investigation the court may direct.

     The bill would clarify that a conservator will also be required to annually provide, to the conservatee and the court, an informal report or accounting statement setting forth the income and other assets within the conservator’s control that have been collected and expended or otherwise distributed by the conservator during the preceding year.  This informal report or accounting statement will be supplemental to the formal inventory and accounting statements that are to be submitted to the court, under oath, at least every six months under the bill.

     The bill would require a conservator, when expending or distributing funds from the conservatee’s estate, to take into account the requirements of the “Prudent Investor Act,” P.L.1997, c.36 (C.3B:20-11.1 et seq.).  The bill also specifies that the conservator will be required to give due regard to, and to take actions that are consistent with, the ward’s best interests and the ward’s expressed wishes and preferences, to the extent that the ward is capable of expressing those wishes and preferences.

     Although existing law already provides that a conservator will be liable to the conservatee or other interested parties, to the same extent as a trustee of an express trust, whenever the exercise of a conservator’s power is improper, the bill would clarify this provision by providing a list of examples of instances where a conservator’s exercise of power is improper.  Specifically, the bill provides that a conservator will be liable to the same extent as a trustee of an express trust whenever a court finds that the conservator has breached his or her fiduciary duties by taking an action that is outside the scope of the conservatorship arrangement or that violates the rights of the conservatee, contradicts or violates the conservatee’s best interests, or is otherwise deemed by the court to be improper for a fiduciary.

     Finally, the bill amends the existing conservatorship law to modernize and clarify the existing language and paragraph and sentence structure and ensure that appropriate language is used consistently, and is presented in an active and direct voice, throughout the law.