A person who is authorized to act in a representative capacity is a fiduciary and must follow certain fiduciary (legal) duties.  Application of the duties vary with the legal authority granted and the situation. 

Agents, conservators, trustees, personal representatives, and even spouses (in relationship to their spouse) are all fiduciaries.  Let us discuss how these fiduciaries may sale or gift real property using their fiduciary powers.

          First, an agent can be authorized in a written power of attorney to sell or gift real property belonging to the principal (whom they represent).  The power of attorney must specifically authorize the agent to sell and/or to gift the real property, as relevant, and must specifically state the real property subject to such authority; title companies require the real property’s legal description to be included in the power of attorney.  The original power of attorney (or a certified copy by a notary public) must be recorded with the county recorder where the real property lies soon after its execution (for title companies to respect it).  Gifting by the agent to themselves is prohibited unless the power of attorney specifically allows and waives the agent’s duty not to self-deal.

          Second, in California, conservators are appointed by the superior court to manage the affairs of the person and/or the estate of a conservatee (i.e., a conserved person).  Conservatorships occur due to the conservatee’s severe physical and/or mental disabilities or their severe inability to avoid fraud, coercion or undue influence. 

When appointed, the court issues the Conservator with “Letters of Conservatorship” (“Letters”).  If the Letters grant “independent powers” (under section 2590 of the Probate Code) the Conservator can sell the conservatee’s real property, other than the conservatee’s personal residence, without court confirmation (order).  Court certified copies of the Letters must be recorded with the County where the real property lies prior to sale.  If a conservatee’s personal residence is being sold a court order approving the sale must also be recorded.

          For a conservator to gift the conservatee’s real property, the conservator must first petition the court for an order of substituted judgment (under section 2580 of the Probate Code).  A substituted judgment proceeding requires notice to certain persons, a court petition and a court hearing (which may be contested) and, if successful, an order authorizing the action.   A certified copy of the court order of substituted judgment, and a certified copy of the Letters, must be filed with the county recorder where the real property lies.

Third, in California, personal representatives of a decedent’s estate are appointed by the superior court and act as officers of the court to represent and manage a decedent’s estate.  When appointed, the court issues the Conservator with either “Letters Testamentary” (to an Executor) or “Letters of Administration” (to an Administrator), “Letters”, as relevant.  If the Letters grant the Personal Representative “full authority” (not “limited authority”), under section 10400 et. seq. of the Probate Code, the Personal Representative can sell the decedent’s real property without court confirmation (approval).  To sell using “full authority”, a court certified copy of the Letters must be recorded with the County where the real property lies and signed consents (or signed waivers) by the heirs or beneficiaries of the estate (as relevant) – in response to a timely notice of proposed action regarding the sale — must be filed with the superior court overseeing the probate.

Fourth, in California, other than selling the married couple’s family home, a spouse acting alone may, in the best interest of both spouses, sell real property that is their community property in limited situations.  Nonetheless, the written consent of the other spouse, or a court order, is always necessary to gift real property or to sell the family home and to sell any real property of a conserved spouse.  Having a trust or a power of attorney is better planning.

The foregoing is a limited discussion and is not legal advice.  If needing guidance on such issues, consult a qualified attorney.

Dennis A. Fordham, attorney, is a State Bar-Certified Specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, Calif. He can be reached at Dennis@DennisFordhamLaw.com and 707-263-3235.

“Serving Lake and Mendocino Counties for nineteen years, the Law Office of Dennis Fordham focuses on legacy and estate planning, trust and probate administration, and special needs planning. We are here for you. 870 South Main Street Lakeport, California 95453-4801. Phone: 707-263-3235.”