I. INTRODUCTION
The Nebraska Legislature made changes to the conservatorship law during the 2011 Legislative Session that are of interest to NBA member financial institutions. Based upon the legislative changes, the Nebraska Supreme Court implemented county court rule amendments and adopted new forms to be used in conservatorship cases in county courts across Nebraska. The new conservatorships forms are discussed below and can be found by going to the Nebraska Supreme Court website (https://supremecourt.nebraska.gov/); click on Forms and scroll to the appropriate titled Document (Forms are listed alphabetically) or the Form Number listed below.
The new forms and laws became effective January 1, 2012. Changes were made to provide better protection of the protected person and to eliminate the differences in procedures which sometimes occurred from county to county.
II. NEW FORMS
A. Order Appointing Conservator (Form Number CC 16:2.1.3)
The first new form bank staff will see in a conservatorship case is the ORDER APPOINTING CONSERVATOR. This new Order will be delivered by the person who is seeking appointment as conservator. At this point in the conservatorship case, a court hearing will have already been conducted, but the person seeking appointment as conservator will not have been appointed by the court yet. Instead of appointing the conservator, the county court judge will order the person seeking the appointment to obtain all of the financial information known by the protected person to be gathered and filed with the county court.
The ORDER APPOINTING CONSERVATOR states that the person seeking appointment as conservator is authorized and ordered to obtain an ACKNOWLEDGEMENT OF FINANCIAL INSTITUTION form to be completed by each financial institution holding any assets or accounts titled in any manner in the name of the protected person.
B. Acknowledgement of Financial Institution (Form Number CC 16:2.6)
Each financial institution receiving the order appointing conservator will also receive the form titled ACKNOWLEDGEMENT OF FINANCIAL INSTITUTION. The ACKNOWLEDGEMENT OF FINANCIAL INSTITUTION should then be completed by bank staff, following the instructions as set forth on the form. Note that the bank is required to attach to the ACKNOWLEDGEMENT OF FINANCIAL INSTITUTION form, a printout of all assets/accounts of the protected person (also referred to in the forms as “ward”) held at the bank. The printout to be attached to the form will not be disclosed to the public, nor made a part of the court’s file available for public inspection. For this reason, the full account number for each account is required to be included on the printout attached to the form. However, since the top portion of the Form will be filed with the court’s file available for public inspection, only the last four digits of the account number should be included on the ACKNOWLEDGEMENT OF FINANCIAL INSTITUTION form.
C. Letters of Conservatorship Restricted (Form Not Published on Supreme Court's Website)
Once the county court obtains all of the ACKNOWLEDGEMENT OF FINANCIAL INSTITUTION forms from all of the banks holding assets of the protected person, the court will then review all of the asset information and decide on the amount of bond, if any, to be set. Once the county court sets the amount of bond and the person seeking the appointment as conservator has satisfied all of the other conditions established by the county court to be appointed as conservator, the county court will issue LETTERS OF CONSERVATORSHIP. The LETTERS OF CONSERVATORSHIP could be restricted or unrestricted. Attachment C included in this Update indicates that the Letters are restricted.
As you will note in Attachment C the LETTERS OF CONSERVATORSHIP restricted states that the conservator shall not withdraw money from the protected person’s account without a court order. If the LETTERS OF CONSERVATORSHIP are issued without being restricted, this language will not be included in the LETTERS OF CONSERVATORSHIP. If the LETTERS OF CONSERVATORSHIP are restricted, the bank will also receive a PROOF OF RESTRICTED ACCOUNT FROM THE DEPOSITORY OR FINANCIAL INSTITUTION form.
There will be a second time in which the bank will be asked to complete the ACKNOWLEDGEMENT OF FINANCIAL INSTITUTION form. This will be after the court actually issues the LETTERS OF CONSERVATORSHIP. By following the instructions, bank staff will check the box adjacent to “Letters of Conservatorship and/or Guardianship;” fill in the account information requested by using only the last four digits of the account number; and attach a printout of all assets owned by the protected person. As previously noted, the printout must contain the complete account number of each account appearing on the printout.
D. Proof of Restricted Account from Depository or Financial Institution (Form Number CC 16:2.11)
If the county court has ordered that all funds shall be restricted, the bank will also receive the PROOF OF RESTRICTED ACCOUNT FROM DEPOSITORY OR FINANCIAL INSTITUTION form. Bank staff will simply need to follow the instructions noted on the form, in order to complete the form and in titling the accounts so as to note that the accounts are restricted. Note in paragraph 2 of Attachment D that no withdrawals are allowed from a restricted account unless the bank is presented with a Certified Court Order authorizing the withdrawal. Reinvestments may be made without a court order, but the type of account cannot be changed, i.e. certificate of deposit cannot be moved to a money market account without a court order authorizing such action. The PROOF OF RESTRICTED ACCOUNT FROM DEPOSITORY OR FINANCIAL INSTITUTION must be signed by the bank manager and the form must be notarized.
III. MISCELLANEOUS
Commencing January 1, 2012, a conservator is be prohibited from making cash withdrawals from ATM transactions or receiving cash back on debit transactions from the protected person’s account without a court order. This restriction will be included on the LETTERS OF CONSERVATORSHIP. The restriction prohibiting ATM withdrawals and cash back on debit card transactions will not apply to conservatorships started prior to January 1, 2012, unless specifically ordered by the court.