CAN A GUARDIAN SELL HIS WARD’S PROPERTY?

Can a Guardian sell property belonging to his ward? Typically, such sale is subject to Court approval. Consider the following example: Joe, a resident of New York County, suffers from Dementia.  A Mental Hygiene Law Article 81 guardianship proceeding was commenced in the beginning of last year for the appointment of a guardian for Joe.  The Court deemed Joe incapacitated and appointed a guardian for him.  

Joe resides in the first floor unit of a building that he owns and rents out the five other units to tenants.  Joe’s only assets are the building and $40,000 left in cash, and his only income is social security. Joe’s Guardian is concerned because Joe’s expenses exceed his income.  Without additional funds, Joe will deplete the entirety of his cash in less than a year. Joe’s guardian has a duty to protect Joe and, as such, wants to sell Joe’s property and use the sales proceeds to continue to pay for Joe’s care. What should he do?  

Is Court Approval Required so that the Guardian Can Sell Property?

In order to determine whether Court approval is required, the guardian has to read the Order and Judgment appointing the guardian. In most cases, Court approval will be required before the Guardian can sell the incapacitated person’s property.  It is imperative that the Guardian review the Order and Judgment for any special instructions regarding the sale of the incapacitated person’s real property.

Can a Guardian Sell Property?

How Can a Guardian Sell Property belonging to His Ward?

The Guardian will first market his ward’s property.  It is recommended that the Guardian hire a broker to sell the Property, especially where the Property is a multi-family home. This will ensure that the Guardian is obtaining fair market value for the property.  Once the Guardian receives an acceptable offer, the parties will sign a contract. The Guardian signs on behalf of the incapacitated person. (Please note that the Guardian cannot sell the incapacitated person’s property in his own name.)  The contract should include language indicating that the contract is subject to Court approval.

Once the Guardian has a signed contract, he should then Petition for the court to approve the sale.  The Guardian should include background information such as the incapacitated person’s name and the date the Order & Judgment was signed by the Court, a description of the property to be sold, the reason that the property is being sold, and any information that can be provided about the purchaser and the contract.  Additional information may need to be provided, such as the incapacitated person’s assets, income, and expenses, especially where the purpose of the sale is to provide needed funds to the incapacitated person whose expenses exceed her assets and income.

 The Guardian should also include in his petition details regarding plans to relocate the incapacitated person.  Court approval is often required to relocate the incapacitated person, so the Guardian should request in the petition that the Court authorize the Guardian to relocate the incapacitated person.

Is an Appraisal Required?

While an appraisal is not always required, it is sometimes recommended to ensure that the incapacitated person will truly benefit from the sale.  The Court may appoint an appraiser to appraise the incapacitated person’s property. The Court will choose the appraiser from the part 36 Fiduciary List.

What are Potential Problems that Can be Encountered when a Guardian tries to Sell Ward’s Property?

One problem that may arise during the sale of the incapacitated person’s property is where and how to relocate the incapacitated person.  The incapacitated person might be able to move into another traditional home setting. However, it is likely that the property is being sold partly because the incapacitated person’s functioning is so limited that he or she can no longer reside in a traditional home setting.  In that case, if the Guardian has the authority to hire professionals to assist in the care of the incapacitated person, it would be a good idea for the Guardian to hire a qualified Geriatric Care Manager (hereinafter referred to as a “GCM”) to assist in the relocation process.  The GCM will guide the Guardian through the process of relocation and advise the Guardian on different options for the incapacitated person’s new home. The GCM will be able to assist in determining the best living arrangements for the incapacitated person (for example, whether it’s more appropriate to move the incapacitated person to a nursing home or assisted living facility) and may know which facilities are the best and most affordable for the incapacitated person.

If the Guardian does not have the power to hire a GCM, he might want to petition the Court for such power.

Another problem that may arise during the sale of the incapacitated person’s property is if the purchaser wants the property delivered vacant and there are tenants still residing at the property.  New York eviction proceedings have very strict and specific procedures that must be followed in order to lawfully and properly evict tenants. If the Guardian was granted the power to hire counsel, the Guardian will want to hire a landlord-tenant attorney to ensure that the specific procedures are followed and to litigate where problems arise.

We can help obtain Court approval to sell the ward’s property. Contact us for more information.

For more information, please contact Guardianshipprobate and estate planning attorney Regina Kiperman:
Phone: 917-261-4514
Email: rkiperman@rklawny.com
Or visit her at her office:
80 Maiden Lane
Suite 304
New York, NY 10038

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