Matter of M.H.
Decided on September 27, 2011
Supreme Court, Bronx County
In the Matter of the Petition of G.F. Guardian of the Person and Property of M.H. An Incapacitated Person, For a Judgment Authorizing the Sale of Certain Real Estate Interest Belonging to the Said Incapacitated Person.
Attorney for Guardian: Christopher Edwards, Esq.
Alexander W. Hunter Jr., J.
The application by order to show cause of G.F., the guardian of the person and property of M.H. (hereinafter "IP"), for an order transferring the IP's interest in the real property located at XXX Burke Avenue in Bronx County to the IP's granddaughter and co-owner of the property, M.R., and upon said transfer, permitting the sale of said property to B.M., pursuant to the contract of sale between M.R. and B.M. dated January 20, 2011, is denied without prejudice.
The guardian asserts that the IP is 91 years old. She currently resides at Workmen's Circle Multicare Center and is not expected to leave the nursing home. The guardian seeks to transfer the IP's life estate interest in said house to M.R., the sole owner of the remainder interest in the premises. He asserts that the IP's interest will be substantially promoted by the disposition of the sale because the IP will not be leaving the nursing home and the co-owner of the property, M.R., wishes to sell the property as she is in the process of relocating her family to the State of Florida. The annual carrying charges for the property are $8,384 and the guardian does not believe that the IP's estate should continue to incur such expenses or even a portion of them. The guardian contends that the proceeds of the sale of the life estate interest in the real estate will be utilized to provide for the care and maintenance of the IP.
The house was appraised by a certified real estate appraiser who estimated the fair market value to be $365,000. On January 20, 2011, M.R. entered into a contract for the sale of the property in the amount of $334,000 to purchaser, B.M. (Exhibit H).[FN1]
The guardian submits a copy of a "Life Estate and Remainder Interest Table" and asserts that the market value of the IP's life estate interest in the premises is approximately $84,908.25 [*2]based upon a purchase price of $315,000 and the fact that the IP is 91 years old. From that amount, the IP's proportional share of the closing costs will also be deducted.
Even though it was unopposed, the application is denied. First, the guardian seeks to transfer the IP's life estate interest in the property to the co-owner, without explanation as to why such a transfer would be necessary. As guardian of the property, upon court permission, the guardian would be allowed to enter into a contract of sale on behalf of the IP as guardian. The guardian has not disclosed to this court why a transfer of the property is necessary prior to selling the home. Additionally, since the IP's interest in the property is an asset of the IP, in order to determine if a transfer of her interest to her granddaughter is appropriate, pursuant to Mental Hygiene Law §81.21(a), the court would have to determined if such a transfer would have been made if the IP had the capacity to act. The court would also have to determine what the purpose of the transfer would be (i.e. for medicaid planning purposes).
Moreover, it is troubling to this court that the co-owner of the IP's property, M.R., entered into a contract for the sale of the property, solely in her name, on January 20, 2011. The contract of sale does not reference any ownership interest by the IP in the subject property. Furthermore, the guardianship proceeding was not commenced until March 9, 2011 and the contract of sale was not disclosed to this court in the guardianship petition or at the hearing, even though M.R. testified and the attorney for the petitioner in the guardianship proceeding was the same attorney who represented M.R. when she entered into the contract of sale.
Additionally, the guardian was appointed by order and judgment of this court dated June 28, 2011 and the guardian did not obtain his commission until August 3, 2011. The order and judgment explicitly states that the guardian of the property may not "alienate, mortgage, lease or otherwise dispose of real property without the specific direction of the Court..." (Exhibit B). Therefore, it was improper for the co-owner of the IP's property to enter into a contract of sale for said property without court permission.
Finally, the guardian asserts that the proceeds of the sale of the IP's life estate interest will be used to provide for the IP's care and maintenance. However, if the property is transferred to M.R. and the contract of sale dated January 20, 2011 is approved by this court, there is no guarantee that the IP will receive her share of the proceeds. There is no bond in place to ensure that if M.R. fails to turn over the IP's share of the proceeds after the sale takes place, the IP will be protected.
Accordingly, the application by the guardian for permission to transfer the property to M.R. and upon said transfer, selling the property to B.M. pursuant to the contract of sale dated January 20, 2011, is denied without prejudice.
Dated:September 27, 2011___________________________ [*3]
Footnote 1:The contract of sale lists the purchase price of the property as $334,000. However, in his petition, the guardian asserts that the purchase price is $315,000.