Conservatorship is the legal process for management of your property and providing for your financial needs when you become "incapacitated." If a court determines you can no longer handle your financial affairs, a conservator is appointed. The conservator must list your assets in the court file, manage your property under court supervision and file periodic accountings with the court.
If you transfer all of your assets to a revocable living trust and give your trustee detailed instructions on how to handle your assets if you become disabled, there should be no need for a conservatorship. Your written agreement or declaration can specifically authorize your trustee to rely on a letter from your physician as proof of your incapacity.
A conservator can establish, or fund, a revocable living trust if (1) the trust would be a more efficient way to administer the property of the incapacitated person and (2) use of the trust would be consistent with the person's overall estate plan. A special court order is needed to do this, however.