Steps for Guardians Selling Property on Behalf of Wards
By Howard Morrel, Esq.
Nothing in real estate is quite so fraught with emotional, ethical, and legal hazards as selling property on behalf of a person under guardianship.
Unfortunately, well-meaning family members and guardians may fail to see the hazards or take the necessary steps to avoid them.
Over the last two decades, I have quietly helped many celebrities and high-profile individuals to manage and sell their properties when they became unable to act for themselves. I have worked closely with guardians, estate attorneys, and financial advisors as properties were sold to raise necessary funds for the individual under guardianship, or to restructure their assets. I know that performing this work requires the highest standards of discretion, privacy, and sensitivity—as well as strict adherence to the law.
To handle guardianship real estate sales properly, I obtained my law license, and became a court-approved fiduciary real estate broker and property manager under Part 36 of the New York Surrogate’s Court. Recently, I founded the Trusts & Estates Division at Christie’s International Real Estate Group, creating a one-stop service for families dealing with estate, trust, and guardianship-controlled properties, especially here in New York City.
In a Guardianship Sale, the Order of Events Is Crucial
What is the most common mistake made by guardians and family members? Entering the real estate sales process without an experienced guide and a clear understanding of the legal requirements or the correct sequence of events. Indeed, that last factor is crucial: taking the steps in the wrong order can lead to delays, angry family members, and worse. In short, do not pick up the phone and call a broker without doing all the necessary legal and emotional preparation.
When Is a Guardian Appointed by the Court?
Guardianship may be appointed by a court when an individual is deemed incapable of managing their own affairs, whether due to age, illness, or disability. In such cases, it often falls to a court-appointed guardian to manage their property, including real estate. At some point, that property may need to be sold—a process that involves navigating not only the real estate market but also the legal requirements mandated by the court.
In this article, I want to walk you through some of the essential considerations and steps when selling real estate for people under guardianship. Whether you’re a court-appointed guardian or a family member helping to oversee the process, understanding these key points will help ensure the sale is handled correctly and in the best interest of the person under guardianship.
For help selling a property on behalf of a ward, please contact us here at the Christie’s International Real Estate Trusts & Estates Division as soon as you even begin considering the sale of a property. You may wish your attorney to make the first call.
Here’s my brief look at the steps you need to follow when selling a guardianship property.
1. Gain an Understanding of the Complete Process Before You Begin
As I mentioned earlier, you must follow the correct order of events in a guardianship sale of real estate. That means working with an expert, but it also means understanding the full process before you take any step at all. I can’t emphasize that enough. Your understanding must include careful and documented planning for the use of funds after the sale.
2. Handle the Emotional Aspects with Care Starting on Day One
It goes without saying that this may be an emotional process for both the ward and their family members. The home may hold important sentimental value, and the idea of selling it can be difficult for everyone. A guardian or relative may also face family disagreements, even turmoil when making decisions about the sale.
As a broker, I always keep in mind that it’s not just about the transaction—it’s about helping the family navigate a significant life change while honoring the wishes and needs of the person under guardianship.
The emotional issues cannot wait until a court process begins—they must be considered by everyone involved from day one. That means having the difficult conversations with family members and the wards themselves before any steps are taken, keeping everyone informed, and handling emotional questions as they arise.
3. Fully Understand the Role of the Guardian in Real Estate Transactions
The guardian’s primary responsibility is to manage the affairs of the person under guardianship (the ward) with their best interests in mind. This includes safeguarding and maximizing their financial assets, including real estate holdings.
A guardian must not only act ethically and legally, but wisely. Indeed, a guardian may be liable for errors of judgment that endanger the financial well-being of the ward.
When the time comes to sell property, that means the guardian must ensure that the sale properly benefits the ward while complying with a significant set of legal obligations.
A qualified, court-approved broker (see below) can help you understand these obligations—so bring one in early to advise you.
4. Consider the Long-Term Financial Impact & Make an Advance Plan
It’s essential to consider not just short-term needs, but the long-term financial impact of the sale on the ward. The proceeds from the sale must be used to support the ward’s ongoing needs, and the court will likely require an advance plan for how the funds will be managed.
That means in most cases the guardian should work with financial and legal professionals to ensure that the sale proceeds will be invested or used in a way that provides for the ward’s care, whether for medical expenses, housing, or other necessary costs.
Choose wisely, and use advisors that not just you, but others will trust. The credentials of these professionals may be critical to everyone: the court, the family, the guardian, and of course, to the ward.
5. In New York, Use a Court-Approved Broker Under Part 36 of the NY Surrogate’s Court
If the court is involved in the transaction, the real estate broker managing a sale in New York must be court-approved under Part 36 of the NY Surrogate’s Court, ensuring that the process is transparent and conducted with the utmost integrity. An approved broker will understand the unique considerations that come with selling real estate for people under guardianship—including compliance with legal standards. Choosing a broker with experience in these types of sales ensures that the property is marketed effectively and that the legal requirements are met. A qualified broker will help with:
- Deciding the timing of a sale: It is absolutely crucial to time the sale not just against market conditions but court processes.
- Accurate Pricing: Setting a realistic price based on market conditions and the court’s requirements.
- Marketing the Property: Developing a strategy to attract the right buyers while adhering to court guidelines.
- Managing Offers: Ensuring that all offers are reviewed and presented in a way that aligns with the court’s expectations.
- Providing evidence to the court that you are acting wisely in your fiduciary duties.
Of course, every state is different. Make sure your attorney and broker have a deep understanding of your state’s laws and court processes.
6. Get a Professional Appraisal
The court will typically require a professional appraisal of the property to ensure that it is being sold for a fair market price. This should be obtained in cooperation with your broker before you attempt court approval.
7. Obtain Court Approval to Sell
Selling real estate for someone under guardianship requires court approval. In New York, this is a mandatory step, and the guardian must follow the strict guidelines under Part 36 of the NY Surrogate’s Court.
That means the guardian must petition the court, explaining why the sale is necessary and how it will benefit the ward long-term. The petition must include details about the property, its value, and how the proceeds will be used to support the ward. The court will only approve the sale if it determines that it’s in the best interest of the ward.
You should work with a lawyer and with your broker to prepare your petition. Again, timing is critical, and the laws in each state will be different.
8. Properly List the Property for Sale
Once the court grants approval, the property can be listed for sale. However, the guardian may need to follow specific guidelines set by the court regarding the listing price and sale terms. These guidelines must not be neglected. Once again, in New York, work with an approved broker to do this correctly.
9. Prepare the Property for Sale
Like any real estate transaction, selling property for someone under guardianship requires preparation to ensure it is market-ready. Read more about property preparation here, but at a minimum, you will need to consider:
- Decluttering and Cleaning: If the ward was living in the home, it may need to be decluttered and cleaned before listing. A professional cleaning and staging service can make the home more appealing to buyers. Your broker can recommend such a service.
- Maintenance and Repairs: Depending on the condition of the property, it may require some minor repairs or upgrades to ensure it sells at the highest possible price. However, all expenses charged to the estate should be carefully managed to ensure they are in the best interest of the ward. This can be tricky, and remember that the court may be looking over your shoulder.
10. Ensure Proceeds Are Handled Properly
Work with your attorney or accountant to make sure that the proceeds from a guardianship sale are handled correctly to minimize taxes, not endanger any public assistance, and strictly follow the rules of trusts for the benefit of the ward. Each case is different, and expert guidance is often required. The pathway for the funds should be established well beforehand.
11. Maintain Transparent and Accurate Records
One of the most important duties of the guardian when selling real estate for a ward is to maintain detailed records of the sale process. The guardian must provide the court with an accurate accounting of all aspects of the sale, including the listing price, repair and cleaning costs, the final sale price, and how the proceeds are allocated. Also, keep a timeline of the process and note how decisions were made.
Transparency is critical, and the court will review all aspects of the sale to ensure that the ward’s best interests are upheld. A court-approved broker understands these requirements and can help ensure that everything is documented properly, from initial listing through the final sale.
12. Contact Us at Christie’s to Learn More
If you’re a guardian or family member involved in the sale of real estate for someone under guardianship, my team at Christie’s International Real Estate Group’s Trusts and Estates Division is here to guide you through every step of the process, from securing court approval to closing the sale. We are committed to protecting the interests of those under guardianship and ensuring that their real estate transactions are handled with the utmost care.
Please don’t hesitate to reach out to us for expert guidance and support during this challenging time.
All the best,
Howard Morrel, Esq.
Co-Founder
Christie’s International Real Estate Group
Trusts & Estates Division
Please note that this article does not constitute legal advice, and is intended only for educational purposes. Always contact a qualified attorney for specific legal advice.