A Man’s Home is His Castle: Selling a Protected Person’s Real Estate

There are certain things that Conservators can do without prior court approval:  paying ordinary living expenses, paying debts and expenses of the protected person,  managing the protected person’s property and investments (though prior court approval is required if the conservator is going to compromise debts/claims).

One thing that absolutely requires prior court approval is the sale, mortgage or lease of real property belonging to the protected person.  Why?  The statute doesn’t say why.  But if you look at the things that a conservator can do without court approval, and then compare that to transactions relating to real property, I think the answer is pretty simple.  As the English says:  A man’s home is his castle.   A person’s home is oftentimes special, holding special family memories.  One of the things that a court looks at in deciding whether to allow the conservator to sell the protected person’s home is whether or not the protected person will be returning home some day.  Although it is not required by statute, court’s oftentimes want to see a Physician’s Statement or other verification that the protected person will no longer be able to reside in the home.  This makes sense.  The courts don’t want to approve a sale of a protected person’s home if there is a chance the protected person will  be restored to capacity the following year.  Homes should only be sold if there is no possibility of the protected person living there anymore, and it no longer makes financial sense to continue to maintain and insure the home when it is vacant.

So how does one sell real estate belonging to someone under a conservatorship?  Look to Minn. Stat. 524.5.418 for the specific details, but in general, the conservator must proceed as follows:

  • First, the conservator needs 2 appraisals from appraisers appointed by the Court.  Each county does things differently, so consult with the court in your county to determine specifically how to proceed.  However, in most cases, the conservator should submit a proposed order to the court with the names of 2 appraisers.  The Court then signs the order appointing appraisers.
  • Conservator then coordinates with the 2 appraisers to appraise the property.  There is a form the appraisers fill out, swearing to do their duty and as to the value of the appraisal. 
  • Conservator then files a Petition with the Court to proceed with a private sale.  (Attaching the 2 appraisals).  Typically, the following documents are submitted with the Petition:  an Affidavit of the Conservator setting forth the factual basis for seeking sale of the home; a Physician’s Statement or letter indicating that the protected person will no longer be able to safely return home; a county assessor verification statement, which gives the property’s most recent appraised value by the county.
  • The court then issues a Notice of Hearing, which the conservator serves on all interested parties.
  • At the hearing, testimony is provided as to why the property needs to be sold.  Testimony should also be given as to the general plan that the conservator has to sell the property (i.e. hire a realtor, sell it to a family member, etc.)
  • After the hearing the Court will issue an Order Directing Sale, which will specify the manner of sale and any parameters (i.e. private sale, to be listed by a realtor with 5% commission, with a minimum sale price of X, etc.).
  • Before a conservator completes a sale of the property, it MUST be confirmed by the Court.  Obviously a buyer will want a purchase agreement signed.  However, the purchase agreement must be contingent upon approval by the Court.  When the terms of an agreement are arrived at, and a contingent purchase agreement signed, the conservator files a Report with the Court, setting forth the specific proposed terms, and seeking an Order Confirming Sale from the Court.  If the Court approves the proposed sale, it signs the Order Confirming Sale and the conservator then has the authority to proceed with a closing on the sale of the property.
  • Title Companies typically require the following documents in order to close on the sale of property owned by someone subject to a conservatorship:  certified copy of:  1) Order Approving Sale; 2) Order Confirming Sale; 3) Letters of Conservatorship; 4) Deed of Sale (conservator’s deed).

If a conservator wants to sell the property at a public sale (auction), the same procedures as above are followed, except that published notice of the auction is required.  (Which makes sense, because the Court wants to ensure that as many people as possible know about the sale, in order to ensure that a fair price is received for the property at the auction).  Even at a public auction, it must be made clear to the bidders that the sale is contingent upon approval by the court.

This is just a general overview of the procedures a conservator must follow in order to sell real estate belonging to a protected person.  As always, there may be other restrictions, limitations or idiosyncrasies that relate to your particular situation.  Therefore, you should consult with an attorney to be sure the proper procedures are followed.

New Minnesota Emergency and Temporary Conservator legislation

The legislature has new legislation regarding emergency and temporary conservators. It can be found at: https://www.revisor.mn.gov/laws/?id=334&year=2010&type=0

Previously, there was not specific statutory authority for an emergency conservator. Instead, if there was a financial emergency for a vulnerable person, one would either have the option of applying for an emergency guardian and hope that the emergency guardian could head off any sort of financial wrongdoings, or apply for a protective order and hope that the court crafted the protective order in such a manner that it would take care of the financial emergency. Now, with the new legislation, there is specific statutory authority for the appointment of an emergency and temporary conservator. The statutory procedures appear to closely mirror those necessary for an emergency guardian.

With the back log in the Courts, and the apparent increase in financial exploitation of vulnerable adults (as evidenced by what seems to be an increasing number of newspaper articles regarding the same), it will be interesting to see whether this new statutory provision for an emergency conservator is utilized. As with general guardianships and conservatorships, I think petitioners need to be selective in what they apply for and only apply for those powers which are necessary (and don’t just check the “all powers” box).

Emergency or General Guardianship in Minnesota?

With all the budget cut-backs and increased caseloads that the Courts are facing, it may be awhile until your petition for a guardianship can be head. If your situation is extreme, you may be able to apply for the appointment of an emergency guardian. The procedures for an emergency guardian are set forth in Minnesota Statue 524.5-311. Each county does things a bit differently. For example, in Hennepin County emergency guardianships are rarely granted. In some other counties, including Wright County and Sherburne County, emergency guardianships are granted in the appropriate situation. Essentially, the Courts look at the emergency petition and decide whether the proposed ward will be substantially harmed before the court can have a full hearing on the guardianship petition. I have had emergency petitions granted when elderly individuals clearly suffering from advanced dementia are endangering themselves in their homes (cooking food and leaving the burners on all night or wandering outside of their home in sub-zero temperatures without appropriate winter clothing on, etc.). There is no hard and fast rule for whether a court will grant emergency petitions. It is very case specific – depending on the specific facts of the case and how long until the general petition will be heard. If you are contemplating bringing an emergency guardianship, consult with an attorney to have your specific case evaluated.

Statutory Authority:

Emergency: Guardianships: 524.5-311; Conservatorships/protective arrangements: 524.5-406(f) and 524.5-412

General: 524.5-301 et. seq. (guardianships); 524.5-401 et. seq. (conservatorships)

How long from time of filing petition until order?

Emergency: Can be the same day; often times within a couple of days

General
: Minimum 15 days, but typically 4 – 6 weeks.

Is notice to respondent and a hearing necessary before Order issued?


Emergency Guardianships
: Appointment without notice and preliminary hearing if Court finds from affidavit or other sworn testimony that respondent will be substantially harmed before a hearing on the appointment can be held. If granted, notice of the appointment must be given to respondent within 48 hours and the Court must hold a hearing within 5 days.
Conservatorship/protective proceeding: must have preliminary hearing, but do not need to give notice to others. See Minn. Stat. 524.5-406(f)

General:
Yes, a hearing is held after at least 14 days notice given to proposed ward (via service by Court Visitor, who files Visitor’s Report) and interested persons.

How long does Order last?


Emergency
:
60 days

Guardianship:
Indefinitely

Special filing requirements?

Emergency: A petition for a general guardianship must either be filed at the same time as emergency petition or it must indicate in petition that it will soon be filed; For an emergency conservatorship, a petition for general conservatorship must be filed at the same time.

Standard/Burden of Proof?

Emergency:
Court must find that compliance with the procedures of for a general petition “will likely result in substantial harm to the respondent’s health, safety or welfare, and that no other person appears to have authority and willingness to act in the circumstances. See Minn. Stat. 524.5-311

General:
Clear and convincing evidence that respondent is incapacitated and that respondent’s needs can’t be met by less restrictive means. See Minn. Stat. 524.5-310

Order appealable?

Emergency:
No

General: Yes

Minnesota Bill of Rights for Wards and Protected Persons

Recently, a 76 year old client suffering from Alzheimers Disease was asked by opposing counsel what he would do if the Court denied the petition to establish a guardianship and the elderly gentlemen could therefore leave the locked Alzheimers facility. My client responded, “Well, I would like to be able to walk outside and get the newspaper on my own. What I’m doing now, being locked up, isn’t living. It’s existing. I’m 76 years young. I want to be living, not just existing.”

Very insightful for someone suffering from fairly advanced Alzheimers. It got me thinking about the Minnesota Bill of Rights for Wards and Protected Persons. If you aren’t already familiar with it, and you practice law in this area, or have a loved one that is subject to a guardianship, or are a guardian yourself, then you should read it. And read it again. It’s important stuff. It boils down to this: just because a person has a guardianship or conservatorship imposed upon them by the Court, does not mean that the person gives up his or her basic human rights. They are still a person with feelings and desires and opinions. They deserve to live, not just exist.
So here you go, take these to heart:

524.5-120 MINNESOTA BILL OF RIGHTS FOR WARDS AND PROTECTED PERSONS.

The ward or protected person retains all rights not restricted by court order and these rights must be enforced by the court. These rights include the right to:


1) treatment with dignity and respect;

2) due consideration of current and previously stated personal desires, medical treatment preferences, religious beliefs, and other preferences and opinions in decisions made by the guardian or conservator;

3) receive timely and appropriate health care and medical treatment that does not violate known conscientious, religious or moral beliefs of the ward or protected person;

4) exercise control of all aspects of life not delegated specifically by court order to the guardian or conservator;

5) guardianship or conservatorship services individually suited to the ward’s or protected person’s conditions and needs;

6) petition the court to prevent or initiate a change in abode;

7) care, comfort, social and recreational needs, training, education, habilitation and rehabilitation care and services, within available resources;

8) be consulted concerning, and to decide to the extent possible, the reasonable care and disposition of the ward’s or protected person’s clothing, furniture, vehicles and other personal effects, to object to the disposition of personal property and effects, and to petition the court for a review of the guardian’s or conservator’s proposed disposition;

9) personal privacy;

10) communication and visitation with persons of the ward’s or protected person’s choice, provided that if the guardian has found that certain communication or visitation may result in harm to the ward’s or protected person’s health, safety, or well-being, that communication or visitation may be restricted but only to the extent necessary to prevent the harm;

11) marry and procreate, unless court approval is required, and to consent or object to sterilization as provided in section 524.5-313, para (c) clause (4), item (iv);

12) petition the court for termination or modification of the guardianship or conservatorship or for other appropriate relief;

13) be represented by an attorney in any proceeding or for the purpose of petitioning the court; and

14) vote, unless restricted by the Court