Once a conservator of the estate is appointed and Letters of Conservatorship have been issued, the conservator must marshal the conservatee’s assets. This means that the conservator of the estate needs to determine what assets the conservatee owns, they need to make sure that titling of those assets reflect that there is a conservatorship, and they must preserve the assets from loss or waste. In most of the conservatorships of the estate that I handle the main types of assets include bank accounts, brokerage accounts, retirement accounts, personal property, and a personal residence. I will address the authority that a conservator of the estate has over retirement accounts in a separate post and will focus on real property in this post.
The first action I advise my conservator of the estate clients to take is to record the Letters of Conservatorship against the title of any real property in California. This will help protect the title from being changed by someone including the conservatee who may be susceptible to fraud or undue influence. Next step is to determine if there is a mortgage secured by the real property and make contact with the mortgage company. Along that same line, the conservator of the estate needs to make sure that the appropriate utilities bills (depending on if the real property is rented to a tenant) and property tax bills are routed to the conservator of the estate. The real property has to be inventoried and appraised by a probate referee. All real property owned by the conservatee including real property in a different state must be inventoried even though the California conservator of the estate has no authority over out-of-state real property. Some courts will calendar a hearing date to ensure that the Inventory and Appraisal is filed within 90 days of the issuance of Letters of Conservatorship. It is important to get started on the Inventory right away so that the court does not suspend powers if the Inventory is not timely filed.
Generally, other than maintaining the home of the conservatee or dependents, court approval is required for any other transaction involving real property. There are certain transactions that may require court approval and there are certain transactions that definitely require court approval. As the best protection for the conservator of the estate, I advise them to always get court approval.
An issue that comes up a lot in conservatorships of the estate is the sale of the conservatee’s personal residence. If the court has granted the conservator of the estate the independent power to sell the conservatee’s residence, then less court involvement is required. However, there are still several specific requirements that the conservator of the estate must do before they can sell the residence. If the conservator of the estate does not have the independent power to sell the conservatee’s real property, then practically every step of the process has to be approved by the court starting with hiring a real estate agent. And the sale itself has to be confirmed by the court before it is completed. This means that the sale can turn into a bidding war in the court room because the sale is opened up for the public to make overbids.
Independent powers can be granted with the initial Petition for Appointment of Probate Conservator or the conservator of the estate can separately petition for the authority at a later date. There are specific allegations that have to be made for the independent powers and the court has to appoint counsel for the conservatee. It is my experience that the court is reluctant to grant independent powers to sell the conservatee’s personal residence in the initial petition and more often than not, a separate petition is filed after appointment. This is primarily due to the several allegations that must be made such as overcoming the presumption that the personal residence is the least restrictive appropriate residence for the conservatee. The process to sell the residence of the conservatee when the conservator of the estate has the independent power to sell it is much quicker because the conservator of the estate does not have to have the court confirm the sale before it can be completed. However, the conservator of the estate must still provide notice with specific details contained in the Probate Code to the court and the court has to determine if the conservator of the estate has provided clear and convincing evidence that the personal residence must be sold. Clear and convincing evidence and notice is not required when the conservator of the estate has the independent power to sell property if the real property being sold is not the personal residence of the conservatee.
A conservator of the estate should always consult with an attorney when dealing with real property in a conservatorship. Even if the conservator of the estate is just renewing an existing lease on real property in the conservatorship it is best to be sure that it is not a transaction that requires them to get court approval.