Acts a Guardian Cannot Take Without Going Back to Court

A newly appointed fiduciary usually receives a list of powers with the order and assumes the list is the whole story. It is not. Statutes carve out a second category of acts that the appointment deliberately withholds, and taking one of them without a further order can be undone at the fiduciary's expense.

The line the statutes draw

Ordinary authority covers the work of keeping things running. A conservator may collect income, pay bills and taxes, maintain and insure property, invest prudently, settle small claims, and continue a business the adult was operating. A guardian may consent to ordinary medical care, arrange services, apply for benefits and decide day-to-day matters.

The withheld category shares a characteristic. Each act either moves value permanently out of the estate, changes who receives it later, or closes off a personal decision the adult might make differently if able. Statutes treat the reversibility of the act, not its size, as the organizing principle.

This is why a conservator may spend a substantial sum on a roof repair without asking anyone, but may not make a modest gift to a grandchild without a petition. The repair preserves the estate; the gift transfers it.

Financial acts that require authorization

The lists across statutes are similar enough to be treated as a common pattern. Specific authorization is generally required to make a gift beyond nominal value; to sell, encumber or surrender a lease on the adult's primary dwelling; to sell or encumber other real estate; to release or disclaim a contingent interest, including a right of survivorship; to exercise or release a power of appointment.

The list continues into estate planning. Creating a revocable or irrevocable trust from estate property, revoking or amending a trust the adult could revoke, changing a beneficiary or surrendering an insurance policy or annuity, exercising or renouncing an elective share in a deceased spouse's estate, and making or amending the adult's will all sit outside ordinary authority in statutes drawn from the uniform act.

Several statutes add a procedural layer to real estate specifically, requiring a further order directing what happens to the sale proceeds. That prevents the situation where a court approves a sale and the money then moves without supervision.

Personal decisions in the restricted category

The restricted list is not only financial. Statutes commonly require a separate hearing before a guardian may consent to procedures that induce convulsion, to psychosurgery, or to psychiatric interventions that restrict freedom of movement. Some require that the adult have counsel at that hearing and appoint one if the adult does not.

Florida groups the most serious personal decisions under a distinct procedure for extraordinary authority. Before granting it the court must appoint independent counsel who may present evidence and cross-examine, receive independent medical, psychological and social evaluations, meet the adult personally, find by clear and convincing evidence that the adult lacks capacity as to that specific question and is unlikely to regain it, and be persuaded that the authority sought serves the adult's interests.

Several states also require court approval before a guardian may move the adult to a more restrictive setting, or may consent to withholding life-sustaining treatment where the adult left no directive. The scope of what a particular order actually confers is a drafting question, addressed in tailoring the order to the areas where capacity is lacking.

How authorization is sought

The vehicle is a petition after appointment, sometimes called a petition for instructions or for authority. It identifies the act, explains why it serves the adult, and gives notice to the adult and to the persons entitled to notice of the original petition.

Courts look for three things. First, whether the act is necessary or clearly beneficial rather than merely convenient. Second, what the adult would have chosen, drawing on prior conduct, statements and any estate plan. Third, whether the fiduciary or the fiduciary's family stands to gain, which raises the level of scrutiny and often prompts appointment of independent counsel.

Where the request concerns real estate, expect the court to want a valuation, the listing terms and the intended use of proceeds. Where it concerns a gift, expect questions about the adult's remaining resources and projected care costs.

Consequences of acting without an order

An unauthorized act is not automatically void as to a good-faith purchaser, and statutes protect third parties who deal with a fiduciary in reliance on the letters. The exposure runs to the fiduciary instead.

Courts can order the transaction unwound where that is possible, surcharge the fiduciary for losses, deny compensation, and remove the fiduciary. The bond, if one was posted, is available to satisfy a surcharge, which is one reason the security requirement exists at all. That mechanism is set out in the bond, inventory and accounting requirements.

Compensation is the quieter version of the same rule. A fiduciary's fees and the fees of the fiduciary's attorney are usually payable from the estate only as the court allows, on a petition that describes the work and the rate. Paying oneself from estate funds without that approval is an unauthorized transaction even where the amount is reasonable, and courts routinely order repayment with the request to be made properly afterward.

Litigation raises a related question. Settling a claim on the adult's behalf, particularly a personal injury claim, generally requires approval, and courts examine the allocation of proceeds, the attorney fee and any lien before approving. Where the recovery is substantial, the court may condition approval on the funds being placed in a restricted account or a trust, which is itself an act requiring authorization.

Unauthorized acts also surface predictably, because the accounting shows them. A gift, a transfer or a sale appears in the report the fiduciary files, and a court visitor or an interested relative reading that report is the usual origin of a removal petition and the surcharge that can accompany it.