Minn. Stat. 524.5-313(c)(3) provides the guardian with “the duty to take reasonable care of the ward’s clothing, furniture, vehicles and other personal effects, and, if other property requires protection, the power to seek appointment of a conservator of the estate.”
So what happens if a guardian decides the certain items of the ward’s must be sold or otherwise disposed of? For example, the guardian might decide that funds are needed for the ward’s care, so items must be sold. Or the guardian may decide that items are no longer used and are too expensive to maintain. For example, a vehicle that the ward doesn’t drive anymore, but that requires insurance. Can a guardian sell some of the ward’s personal property? Yes. Minn. Stat. 524.313(c)(3) sets forth the procedures that must be followed before disposing of personal property.
If the guardian wants to dispose of items such as these, notice must be given to interested persons. The form Notice of Intent to Dispose of Clothing, Vehicles, Furniture or Other Personal Effects is found on the State Court website. It must be completed by the guardian and served on Interested Persons at least 10 days before the items are disposed of by the guardian. Interested Persons are those listed in Minn. Stat. 524.5-102, Subd. 7. The Interested Persons then have the 10 day period in which to serve the guardian, by mail or personal service, with an objection. If the guardian receives an objection and still wants to sell or dispose of the item, the guardian must first petition the court for approval of the proposed disposition.
For specifics regarding a guardian selling a ward’s personal property and the proper procedures to follow, see Minn. Stat. 524.5-313 or speak with an experienced Minnesota guardianship attorney.
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.