7.12 Guardianship And Conservatorship Procedures

7.12.1

In General

The purposes of statutes relating to guardianship/conservatorship proceedings are to safeguard the personal and property rights and interests of minors and incompetent persons.

The provisions for the appointment of guardians/conservators and the extent of their powers, duties, and responsibilities are determined by the laws of the jurisdiction in which the guardians/conservators were appointed and remain subject to the control and supervision of the court in which they were appointed.

In most jurisdictions, guardianship/conservatorship statutes are experiencing radical changes as a consequence of the desire of the legislatures to achieve a more rational balance among the rights of incapacitated individuals, the duty of society to care for its citizens unable to care for themselves, and the rights of the public to be safe from dangerous behavior.

A principal feature of these changes has been the "destigmatization" of the guardianship/conservatorship terminology. The following can be cited among the new terms that have been added or those which meaning has been redefined:

  • Incapacitated Person
  • Partially Incapacitated Person
  • Guardian
  • Limited Guardianship
  • Ward
  • Guardian Ad Litem
  • Disabled Person
  • Partially Disabled Person
  • Conservator
  • Limited Conservator
  • Protectee
  • Conservator Ad Litem
  • Least Restrictive Environment Principal

In this respect, state law must be thoroughly examined in order to ascertain the jurisdictional meaning and extent of such terms.

7.12.2

Sale, Mortgage, Or Lease Of The Ward's/Protectee's /Conservatee's Property By The Guardian/Conservator

In general, a guardian/conservator has no authority without an order from a court of competent jurisdiction to sell, mortgage, lease, or otherwise encumber any property owned by the ward/protectee/conservatee unless the guardian/conservator is acting under statutory authority.

An act of a guardian/conservator, if not executed with proper authority, is voidable and may be totally void.

Statutory law usually sets forth the requirements that must be complied with in regard to transactions affecting property owned by the ward/protectee/conservatee. These procedures vary among the states although there is a certain degree of similarity. They tend to reflect many provisions that also apply to court-approved sales of decedent's real property and may be generally summarized as follows:

  • The issuance of proper letters of guardianship /conservatorship.

  • A court's having jurisdiction to order the sale, mortgage, lease, or encumbrance of the ward's/protectee's/conservatee's property.

  • The specific statutory purposes for which the ward's/ protectee's/conservatee's property may be sold, mortgaged, leased, or encumbered.

  • An appraisal report of the property filed with the court.

  • The filing of a petition by a guardian/conservator stating the information required by statute in connection with the proposed sale, mortgage, lease, or encumbrance of the property.

  • The form of the notice of hearing.

  • The method of service of the notice of hearing.

  • A hearing.

  • The order of the court authorizing the sale, mortgage, lease, or encumbrance of the property. This order must be responsive to the petition presented and describe the property with sufficient certainty in order to identify it.

  • The oath of the guardian/conservator.

  • The bond of the guardian/conservator.

  • The execution by the guardian/conservator at a public or private sale and under the terms and provisions of the order of the court of an agreement to sell, mortgage, lease, or encumber the property.

  • The report of sale, mortgage, lease, or encumbrance of the property filed by the guardian/conservator with the court.

  • The order of confirmation issued by the court.

  • The execution of the deed, mortgage, lease, or encumbrance by the guardian/conservator.

Note: The above procedures are not applicable or pertinent in some jurisdictions so state law must be fully researched.

7.12.3

Purchase Of Real Property By The Guardian/Conservator

In the absence of specific authority, given either by statute or by an order of the court, the guardian/conservator has no power to purchase real property with the ward's/protectee's /conservatee's funds.

Any unauthorized acquisition may be rescinded by the ward/protectee/conservatee when attaining majority (if a minor) or upon a restoration (if an incompetent).

7.12.4

Title To Real Property Owned By The Ward/Protectee/ Conservatee

The guardian/conservator has no title to any property owned by the ward/protectee/conservatee. Title to any real property of a minor or incompetent is neither vested in the "estate" nor in the "guardian/conservator."

Guardians/conservators are merely custodians of the assets of the wards/protectees/conservatees, without any title thereto. Legal title to any real property of a minor or incompetent remains always vested in the person of the minor or the incompetent.

Guardians/conservators are empowered, under the supervision of the court, to manage, care, and control any property owned by the ward/protectee/conservatee.

7.12.5

Condition Of The Title By A Purchaser, Mortgagee, Or Lessee From A Guardian/Conservator

The condition of the title to real property acquired by a purchaser, lender, or lessee through a guardian/conservator's deed is unaffected by the fact that the deed is executed in compliance with an order of a court. The purchaser acquires the same kind of title that was owned by the ward/conservatee/protectee. The order of the court has no bearing whatsoever in regard to the clearing, release, or cancellation of matters, liens, or encumbrances that may be affecting the title. Consequently, unless the property is released of record, any such matters, liens, or encumbrances must be shown as proper title exceptions in title commitments and policies.

7.12.6

Ratification By The Ward/Protectee/Conservatee

Any unauthorized or otherwise void sale, mortgage, or lease executed by a guardian/conservator may be ratified by the ward/protectee/conservatee upon attaining majority (if a minor) or upon restoration (if an incompetent).

State law must be researched to ascertain the procedure to be followed and the period of time within which the ratification my be effected.

7.12.7

Rescission By The Ward/Protectee/Conservatee

Any unauthorized sale, mortgage, or lease executed by a guardian/conservator may be rescinded by the ward/protectee/conservatee upon attaining majority (if a minor) or upon restoration (if an incompetent).

State law must be researched in order to ascertain the procedure to be followed and the period of time within which the rescission may be effected.

7.12.8

Foreign Guardians/Conservators

A foreign guardian/conservator is one appointed by a judicial authority outside the state where the property is located or the ward/protectee/conservatee is domiciled.

In general terms, the authority of a guardian/conservator is limited to the state in which the guardian/conservator has been appointed and cannot exercise rights of guardianship/conservatorship elsewhere without first obtaining ancillary letters of guardianship/conservatorship from the local courts except:

  • As otherwise authorized by local statute.
  • As allowed by the comity of the state, as expressed by the legislature or its courts.

Except as authorized by statute or the principle of comity, a foreign guardian/conservator cannot make a valid conveyance, mortgage, or lease of property located beyond the limits of the state where the guardian/conservator qualified.

7.12.9

Guidelines For The Examination Of Guardianship/Conservatorship Proceedings

In connection with the sale or encumbrance of any real property owned by a minor/incompetent/ward/protectee /conservatee, the following items must be fully ascertained and satisfied:

  • Has the guardian/conservator been duly appointed and qualified?

  • If required by statute, has a bond been filed?

  • Have letters of guardianship/conservatorship been issued?

  • Has the guardianship/conservatorship been terminated as a consequence of the happening of any of the following:

    • Death of the minor/incompetent/ward/protectee/conservatee.
    • Majority of the minor/ward/protectee/conservatee.
    • Marriage of the minor (in certain jurisdictions).

  • Has the guardian/conservator resigned, been discharged, or has authority otherwise been terminated?

  • Have an inventory and appraisal been filed?

  • Is the property in question shown in the inventory?

  • Has the guardian/conservator filed with the court a proper petition for the sale, mortgage, or lease of the minor/incompetent/ward/protectee/conservatee's property?

  • Does the petition conform with the provisions of the pertinent local statutes.

  • Are the proceedings prior to the entering of the order or decree of the court in strict compliance with the pertinent statutes? Compliance must be ascertained in connection with the following:

    • Purposes for which a sale, mortgage, or lease can be authorized.
    • Property or interests that may be sold, mortgaged, or leased.
    • Contents of the application or petition for the order of the court authorizing the sale, mortgage, or lease.
    • Parties required to be served with notice.
    • Form of notice.
    • Compliance with notice.
    • Hearing
    • Order or decree of the court authorizing the sale, mortgage, or lease.
    • Special bond for sale (in some jurisdictions).

  • Has an order or decree of the court authorizing the guardian/conservator to sell, mortgage, or lease the property been entered by the court?

  • In the case of a sale, has the sale been conducted in strict compliance with the pertinent statutes and the provisions of the order or decree of the court? Compliance must be ascertained with each of the following:

    • Form of notice (if required by statute).
    • Manner and conduct of the sale.
    • Whether there is any relation between the guardian/conservator and the purchaser of the property.
    • Report to the court of the sale.
    • Adequacy of the consideration received by the guardian/conservator.
    • Order or decree of confirmation entered by the court.
    • Execution of the deed to the purchaser.
    • Delivery of the deed.
    • Recording of the deed.

  • If the transaction is other than a sale, has the transaction has been conducted in strict compliance with pertinent statutes and provisions of the order of the court?

  • Does the deed, mortgage, or lease contain all the pertinent information or recitals required by statutes?

  • Have all the liens and encumbrances affecting the property been shown as proper title exceptions?