wednesday, june 21, 2017 real estate rooms: 316-317 ...€¦ · iowa conservatorships 1. the case...

Wednesday, June 21, 2017 Real Estate

Rooms: 316-317 Conservatorship and Power of Attorney Issues in Real Estate

2:40 p.m. – 3:40 p.m.

Presented by Mark Cord

Moore, Heffernan, Moeller, Johnson & Meis, LLP 501 Pierce Street, Suite 300

Sioux City, Iowa 51101 Phone: 712-252-0020

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CONSERVATORSHIP AND POWER OF ATTORNEY ISSUES IN REAL ESTATE

Presented by: Mark C. Cord III, J.D.

Moore, Heffernan, Moeller, Johnson & Meis, LLP 501 Pierce Street, Suite 300

Sioux City, Iowa 51101 712-252-0020

[email protected] www.MooreHeffernanLaw.com

IOWA CONSERVATORSHIPS

1. The Case that Changed it All - Matter of the Guardianship of Hedin, a. 528 N.W.2d 567 (Iowa 1995), involved a mildly retarded adult who was the

subject of a voluntary guardianship by his older sister. The district court denied the ward’s petition to remove his sister as guardian and to terminate the guardianship claiming that the Iowa guardianship statute was unconstitutional because it denied him due process, and was vague and overbroad. The ward argued that the statute did not limit imposition of a guardianship to just those persons whose decision making incapacity was impaired to the point it affected their safety, and that a guardianship should only be imposed upon a ward to the extent needed for the ward’s protection. Summary of Court’s holdings: a.i. “First, in proceedings to establish, modify, or terminate a guardianship, the

district court may make a finding of incompetency only if the ward’s or proposed ward’s decision making capacity is so impaired that the ward is unable to care for his or her personal safety or to attend to and provide for such necessities as food, shelter, clothing, and medical care, without which physical injury or illness may occur. Credible evidence of third-party assistance produced from any source must be considered in this determination.

a.ii. Second, in determining whether a guardianship is to be established, modified, or terminated, the district court must consider whether a limited guardianship is appropriate.

a.iii. Third, in proceedings to establish, modify, or terminate a guardianship, the standard of proof for determining incompetency is clear and convincing evidence.

a.iv. Last, where the ward petitions to terminate the guardianship, the ward must make a prima facie showing that the ward has some decision making capacity. Once this prima facie showing is made, the guardian has the burden to go forward and prove by clear and convincing evidence the ward’s incompetency, if any. This burden of persuasion is on the party

mailto:[email protected]

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petitioning for guardianship, and always remains with the guardian when the proceeding is one to modify or terminate the guardianship.” Id. at 582-83.

b. Hedin Applied to Conservatorships. In Matter of the Guardianship and Conservatorship of Teeter, 537 N.W.2d 808 (Iowa App. 1995), a woman with a brain injury appealed the district court’s decision granting her adult children’s petition for involuntary conservatorship. The Court of Appeals reversed the lower court’s decision holding that petitioners failed to make required showing that subject was not able to care for her own personal safety or provide necessities of life as required by Hedin. Iowa Supreme Court then cited Teeter for the proposition that Hedin applies to conservatorships. Conservatorship of Leonard, 563 N.W.2d 193 (Iowa 1997).

2. Chapter 633. Iowa Conservatorship – Generally a. The Iowa Legislature codified the Supreme Court ruling from Hedin by

amendments to the Iowa Probate Code in 1997 and applied the holdings to both guardianships and conservatorships, except the amendments do not require, in the case of a conservatorship, that a ward’s incapacity endanger the ward’s personal safety or render the ward unable to provide the necessities of life. See Iowa Code §633.551, et seq.

b. Chapter 633 of the Code of Iowa, governs the establishment, administration and termination of conservatorships in Iowa.

c. Conservatorship c.i. A “conservator” is a court-authorized person appointed by the court to

have the custody and control of the property of a ward under the provisions of the probate code. Iowa Code §633.3(7). The term “guardian of the property” is synonymous with the term “conservator.” Iowa Code §633.3(21).

c.ii. Distinction. Iowa Guardianships c.ii.1. A “guardianship” is a court-authorized relationship established

under the provisions of the Iowa Probate Code in which one person, the guardian, assumes responsibility for the physical custody of another person, the ward. A “guardian” is the person appointed by the court to have custody of the person of the ward. Iowa Code §633.3(20).

d. Iowa Code § 633.566(2) specifies two categories of persons warranting conservatorships:

d.i. Persons whose decision-making capacity is so impaired that they are unable to make, communicate, or carry out important decisions concerning their financial affairs.

d.ii. Minors e. Estate. “[T]he real and personal property of a . . . ward, . . . as from time to time

changed in form by sale, reinvestment or otherwise, and augmented by any accretions or additions thereto and substitutions therefor, or diminished by any decreases and distributions therefrom” is called the estate. Iowa Code §633.3(15).

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3. Guardian Ad Litem in Real Estate Matters a. Appointed to protect the interests of the ward as an interested party arising when

an application is filed by the conservator of the ward. Since the conservator filed the application for a matter involving real estate (or any other matter), he or she cannot act in the adverse capacity of making a defense on behalf of the ward.

b. Rule 1.210 Minors, Incompetents. “An action of a minor or any person adjudged incompetent shall be brought by the person's conservator if there is one or, if not, by the person's guardian if there is one; otherwise the minor may sue by a next friend, and the incompetent by a conservator or guardian appointed by the court for that purpose. If it is in the person's best interest, the court may dismiss such action or substitute another conservator, guardian or next friend.”

c. Rule 1.211. Defense by Incompetents, Prisoners, etc. “No judgment without a defense shall be entered against a party then a minor, or confined in a penitentiary, reformatory or any state hospital for the mentally ill, or one adjudged incompetent, or whose physician certifies to the court that the party appears to be mentally incapable of conducting a defense. Such defense shall be by guardian ad litem; but the conservator (or if none, the guardian) of a ward or the attorney appearing for a competent party may defend unless the proceeding was brought by or on behalf of such fiduciary or unless the court supersedes such fiduciary by a guardian ad litem appointed in the ward's interest.”

d. Rule 1.212. Appointment of Guardians Ad Litem. “If a party served with original notice appears to be subject to rule 1.211, the court may appoint a guardian ad litem for the party, or substitute another, in the ward's interest. Application for such appointment or substitution may be by the ward, if competent, or a minor over 14 years old; otherwise by the party's conservator or guardian or, if none, by any friend or any party to the action.”

e. Rule 1.405(2) Answer by Guardian Ad Litem. All answers by conservators, guardians or guardians ad litem, or filed under rule 1.212, shall state whether proper service has been had on the ward; and they shall deny all material allegations prejudicial to the ward.

f. Rule 1.305(2) and (3). Service of Process. Court appointed guardians ad litem accepts service on behalf of minors or incompetents who are not confined to a state hospital for the mentally ill when the notice is served on behalf of a fiduciary and the fiduciary is the only person available upon whom service could be made.

g. “At or before the hearing in any proceedings under this probate code, where all the parties interested in the estate are required to be notified thereof, the court, in its discretion, may appoint some competent attorney to represent any interested person who has been served with notice and who is otherwise unrepresented. The appointment of an attorney under the provisions of this section, shall be in lieu of appointment of a guardian ad litem provided for in the rules of civil procedure.” Iowa Code §633.118.

4. Power Over Real Estate a. Ward Contractually Incompetent. “[Ward] … shall not have the power to convey,

encumber, or dispose of property in any manner, other than by will if the ward possesses the requisite testamentary capacity, unless the court determines that the

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ward has a limited ability to handle the ward's own funds. If the court makes such a finding, it shall specify to what extent the ward may possess and use the ward's own funds.” Iowa Code §633.637.

b. Title of Property. The title to all property of the ward is in the ward and not the conservator subject, however, to the possession of the conservator and to the control of the court for the purposes of administration, sale or other disposition, under the provisions of the law. Any real property titled at any time in the name of a conservatorship shall be deemed to be titled in the ward's name subject to the conservator's right of possession. Iowa Code §633.639.

c. Relevant Duties of a Conservator - Real Estate. c.i. Possession. “[To] take, possession of all of the real and personal property of

the ward. The conservator shall pay the taxes and collect the income therefrom until the conservatorship is terminated. The conservator may maintain an action for the possession of the property, and to determine the title to the same.” Iowa Code §633.640.

c.ii. Protect and Preserve. “[To] protect and preserve the estate of the ward, to invest it prudently, to account for it, and, at the termination of the conservatorship, to deliver the assets of the ward to the person entitled thereto. Iowa Code §633.641; Matter of Conservatorship of Rininger, 500 N.W.2d 47 (Iowa 1993) (conservator legal obligation to recognize restrictions that the law places on ward’s authority to dispose of property).

c.iii. Medicaid Reporting. Assets, income of a ward receiving medical assistance under chapter 249A, including changes. Iowa Code §633.641

c.iv. Prudence. To use sound judgment and discretion in pursuance of ward’s alleged best interests. See Matter of Guardianship and Conservatorship of Liggett, 327 N.W.2d 779 (Iowa App. 1982).

c.v. Restricted Self-Dealing. Permitted only with the consent of the court after notice to all interested persons, and only if the conservator derives no profit other than fiduciary’s distributive share. Iowa Code §633.155. c.v.1. See In the Matter of Guardianship and Conservatorship of Jordan

v. Remer, 616 N.W.2nd 553 (Iowa 2000) (1) ward is entitled to personal notice of hearing on proposed sale of real estate; (2) sale not binding of estate in absence of such notice; (3) sale of real estate was not in ward's best interest and thus would be judicially annulled; (4) ward was entitled to recoup certain charges against conservatorship made by conservator; and (5) punitive damages were properly assessed against conservator.

List Serve Question #15: FACTS: Beneficiary of estate, also being administrator, contracts to purchase real estate and provides notice of sale to all entitled persons, one of whom same beneficiary is acting as Conservator and Guardian for another beneficiary. QUESTION: Is there a title issue on the inherent conflict between the potential purchaser and his role as the Guardian/Conservator?

RESPONSE(S): I believe that an order in the conservatorship proceeding is also required and appointment of guardian ad litem to represent the ward. See also Iowa Code Section 633.647 (power of conservators requiring court approval.) 633.155. Self-dealing by fiduciary prohibited.

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d. Powers of Conservators Without Order of Court d.i. “To collect, receive, receipt for any principal or income, and to enforce,

defend against or prosecute any claim by or against the ward or the conservator.”

d.ii. “To sell and transfer personal property of a perishable nature and personal property for which there is a regularly established market.”

d.iii. “To vote at corporate meetings in person or by proxy.” d.iv. “To receive additional property from any source.” d.v. “[T]o continue to hold any investment or other property originally

received by the conservator, and also any increase thereof, pending the timely filing of the first annual report.” Iowa Code §633.646.

e. Powers of Conservators Subject to Court Approval e.i. “To invest the funds belonging to the ward.

e.ii. To execute leases. e.iii. To make payments to, or for the benefit of, the ward in any of the

following ways: (a) Directly to the ward; (b) Directly for the maintenance, welfare, and education of the ward. To the legal guardian of the person of the ward; (c) To anyone who at the time shall have the custody and care of the person of the ward.

e.iv. To apply any portion of the income or of the estate of the ward for the support of any person for whose support the ward is legally liable.

e.v. To compromise or settle any claim by or against the ward or the conservator; to adjust, arbitrate, or compromise claims in favor of or against the ward or the conservator.

e.vi. To make an election for the ward who is a surviving spouse as provided in §§ 633.236 and 633.240.

e.vii. To exercise the right to disclaim on behalf of the ward as provided in § 633E.5.

e.viii. To do any other thing that the court determines to be to the best interests of the ward and the ward's estate.” Iowa Code §633.647.

e.ix. Compromise of personal injury settlements. e.x. Breach a contract entered into by the ward prior to appointment for good

cause but the estate will be liable for the breach. See Iowa Code §633.650. e.xi. Subject to court approval, to sell, mortgage, exchange, pledge and lease

real and personal property belonging to the ward, including the homestead and exempt property.

List Serve Question #12. FACTS: The owner of real estate dies. One of the decedent’s children has Down syndrome and a conservator has been appointed for her. The executor of the owner’s estate has filed a petition to sell the real estate. Iowa Code § 633.646 points out the powers of a conservator without court approval but I wonder if the power to consent to a sale requires Court approval. QUESTION: May conservator consent to the sale without approval of the Court in the pending conservatorship? RESPONSE(S): I believe the Conservator has no authority to consent and must ask the Court to protect the ward’s rights. Standard Answer to the petition to sell. Formality, but required.

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5. Process for Sale of Real Property. a. The sale, mortgage, exchange, pledge, and lease must be in the best interest of the

ward. Iowa Code §633.652. b. Conservator must use the procedure and manner provided in the Iowa Probate

Code for sale, mortgage, lease, etc., of property by personal representative in administration of a decedent’s estate. Iowa Code §633.652. Also see Iowa Code §§633.383-.402.

c. See Title Standard 9.17 for abstract showings and process in detail. d. See Probate Bar Manual for Forms e. Chronological Steps:

e.i. Conservator files a petition and application for appointment of guardian ad litem to represent the ward at the hearing. Iowa Code §633.388; I.R.C.P. 1.211.

e.ii. Court order appoints a guardian ad litem, fixing time and place of hearing and prescribing the time and manner of service. The conservator serves notice as prescribed. See Iowa Code §§633.40 and .389; I.R.C.P. 1.308.

e.iii. Guardian ad litem files answer in involuntary proceedings. I.R.C.P. 1.211 and 1.404. See Title Standard 6.4.

e.iv. An order authorizing transaction involving ward’s property is entered if shown to be in ward’s best interest. See Iowa Code §633.396.

e.v. After completing the transaction, conservator files a report describing the transaction, to be approved by the court. See Iowa Code §633.399.

e.vi. An order approving the matter may be void or voidable if a guardian ad litem is not appointed to represent the ward in the hearing. Eighth Edition of Iowa Land Title Examination Standards §6.4 (2010), Caveat; See I.R.C.P. 1.211; In the Matter of Guardianship and Conservatorship of Jordan v. Remer, 616 N.W. 2d 553, 559 (2000).

List Serve #7 Selling Property in Voluntary Conservatorship. FACTS: In a petition to sell property in a voluntary conservatorship, is notice required just to the ward or to all children (provided that there are adult children)? The ward is fine with selling the property and I know the petition for the appointment of the conservator itself doesn’t have to be served on the adult children (I think we did anyway), but does the petition to sell property have to be served on the adult children as well? We just have a closing coming up and I’m not sure I can get consent from one of the children in time but I would prefer to do it correctly. QUESTION: Does the petition to sell property have to be served on the adult children? RESPONSE(S): You will want compliance with Title Standard 9.17 cut and pasted in full below, but in most direct answer to your question the standard says:

The procedure to support a court officer’s deed by the appointed conservator follows the procedures required for the executor or administrator to sell real property in an intestate estate or where the Last Will and Testament does not contain a power of sale (Iowa Code §633.652) (which for notice purposes sends you to 633.389) Notice to interested parties of the hearing on the petition for sale of real property includes the ward and such other parties as the court may determine to be interested parties.

What does that mean in a practical operation?

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f. Notes on Sales f.i. Petition for authority may be combined with the report of sale/mortgage if

the conservator already secured a buyer and mortgagor and has entered into a contract subject to court approval, the, See Iowa Code §633.400. See Iowa HotDoc Probate Manual for forms.

f.ii. The remedy for a party to a real estate contract subject to court approval in a conservatorship proceeding is an action for specific performance on the contract. The success in such a specific performance action may be questionable when conservator believes that the contract is not in the best interests of ward. Matter of Conservatorship of Summers, 316 N.W.2d 185, 186 (Iowa Ct. App. 1981).

f.iii. Order authorizing a sale has force and effect of judgment or final adjudication. Stake v. Cole, 133 N.W.2d 714 (1965).

f.iv. Ademption: Where the sale of specifically devised property of an incompetent is made by a conservator (guardian in facts) with court approval, the devisee is adeemed only to the extent proceeds are used for the care and maintenance of the ward and expenses of the conservatorship (guardianship). Id. at 720.

6. Management of Real Estate.

a. “Conservators shall have the following powers subject to approval of the court after hearing on such notice, if any, as the court may require … [t]o execute leases [and] [t]o do any other thing that the court determines to be in the best interests of the ward and the ward’s estate.” Iowa Code §633.647.

b. See also §633.672. Conservators shall have the power to sell, mortgage, exchange, pledge and lease real and personal property belonging to the ward, including the homestead and exempt personal property, when it appears to be to the best interests of the ward, in the same manner and by the same procedure that is provided in this probate code for sale, mortgage, exchange, pledge and lease by personal representatives in administration of estates of decedents

c. Prudent Investor Rule: When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing property for the benefit of another, a fiduciary shall consider all of the following circumstances along with the circumstances identified in section 633A.4302, if applicable: a. The length of time the fiduciary will have control over the estate assets and the anticipated costs of complying with the provisions of this section. b. The unique nature of all of the following: (1) The duties of a personal representative or conservator. (2) The assets, income, expenses, and distribution requirements of the estate. (3) The needs and rights of the beneficiaries or the ward. Iowa Code §633.123.

d. Landlord/Tenant d.i. Eviction from house of ward – is the power in a guardian or conservator?

d.ii. Best interests of ward – companion vs maximize income d.iii. Authority to act in shoes of the ward if in best interest. d.iv. To be clear on capacity acting on behalf of ward.

https://1.next.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000256&cite=IASTS633A.4302&originatingDoc=N0655F8800F7511DCA306AC74CECB5275&refType=LQ&originationContext=document&transitionType=DocumentItem&contextData=(sc.UserEnteredCitation)

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List Serve Question #4 from supplement FACTS: I am conservator for a disabled veteran who owns a life estate in the house in which he resides. It is a full conservatorship with no limitations. A person (hereafter sponge) moved in with the ward almost a year ago with the ward’s permission, but without my permission. The sponge’s elderly mother owns the remainder interest in the house. While the sponge does some useful things for the ward, I do not trust him. I suspect he takes some of the ward’s weekly spending money and he is now demanding that the conservatorship pay him for doing house chores, such as mowing the lawn. The sponge thinks the house is his because his mother owns the remainder interest.

QUESTION: Can I, as conservator, have the sponge evicted even if the ward wants him to stay? To be safe, I would send a thirty day notice of termination of tenancy followed by a forcible entry and detainer action.

Excerpt: The needs and best interests that guide the conservator do not relate solely to the assets. Both Iowa Code Section s633.647(8) and 633.576 require doing things in the best interests of the ward. In addition 633.123 require the ward's property to be managed by considering the needs and rights of the ward. Iowa Code Section 633.123 also requires the conservator to consider the circumstances identified in Iowa Code Section 633A.4302, which include administration solely in the interest of the beneficiaries. In short, the conservator is not supposed to manage the assets just to get the highest return or to conserve the assets to the greatest extent possible. The conservator should be managing the assets by considering the needs and interests of the ward.

List Serve Question #10. Variation with Forfeiture.

List Serve Question #17. Holdover From a Forfeiture.

List Serve Question #16. Eviction based upon dependent adult abuse under 235B.19(7). Upon a finding of probable cause to believe that dependent adult abuse has occurred and is either ongoing or is likely to reoccur, the court may also enter orders as may be appropriate to third persons enjoining them from specific conduct. The orders may include temporary restraining orders which impose criminal sanctions if violated. The court may enjoin third persons from any of the following:

a. ….

c. Living at the dependent adult's residence. …

7. Foreign Conservatorship with real estate in Iowa a. Must an Iowa conservatorship be established? b. When there is no conservatorship, nor any application therefor pending, in this

state, the duly qualified foreign conservator or guardian of a nonresident ward may, upon application, be appointed conservator of the property of such person in this state; provided that a resident conservator is appointed to serve with the foreign conservator; and provided further, that for good cause shown, the court may appoint the foreign conservator to act alone without the appointment of a resident conservator. Iowa Code Ann. § 633.603.

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c. Uniform Adult Guardianship and Protective Proceedings Act. 2010 Ia. Legis. Serv. Ch. 1086 (H.F. 734). If the ward’s home state has adopted the UAGPPA, then it may be able to follow Iowa Code Ann. §633.719. Registration of Protective Orders. “If a conservator has been appointed in another state and a petition for a protective order is not pending in this state, the conservator appointed in the other state, after giving notice to the appointing court of an intent to register, may register the protective order in this state by filing as a foreign judgment in a court of this state, in any county in which property belonging to the protected person is located, certified copies of the order and letters of office and of any bond.”

d. “Protective order” means an order appointing a conservator as defined in section 633.3. “Protective order” does not include protective orders issued pursuant to chapter 664A or protective orders issued pursuant to sections 235B.18 and 235B.19. PROBATE PROCEEDINGS--GUARDIAN AND WARD--ADULT GUARDIANSHIP, 2010 Ia. Legis. Serv. Ch. 1086 (H.F. 734) (WEST)

e. A court of this state shall treat a foreign country as if it were a state of the United States for the purpose of applying this part and parts 2, 3, and 5. Iowa Code §633.802.

List Serve Question #6 FACTS: I’ve been asked to review a wind project lease and easement agreement for a non-resident individual who is serving as the guardian and conservator of his non-resident ward who owns Iowa real estate. Based on the information shown in the documents the drafter of the lease/easement refers to the out-of-state guardianship and conservatorship by the county, file and probate number, etc. to indicate the conservator’s authority to enter into this agreement.

I have only been asked to review the content of the wind project lease/ easement. However, my initial concern, even without considering the content of the lease/easement, is that there is no Iowa conservatorship, and the wind project lease/easement is long term with options to extend. I am sure that the out-of-state conservator is not contemplating opening an Iowa conservatorship, and up to this point, has not needed one. I think Iowa Code Sections 633.652 and 633.647 are applicable. These sections refer to leasing and powers of a conservator subject to approval of the Court. In this situation I think a conservatorship needs to be established, an inventory filed as to the Iowa real estate, and that the lease/easement would need to be approved by the Court.

QUESTION: Does the conservatorship need to be established in Iowa, an inventory filed as to the Iowa real estate, and the lease/easement be approved by the Court?

List Serve Question #13

FACTS: Iowa real property is owned by multiple parties, including an individual residing in Minnesota for whom a conservatorship proceeding is open in Minnesota. Conservator has the power (pursuant to Minnesota conservatorship order) to approve any contract which the ward may want to make. The same order provides that the conservator does not have the power to exchange or sell an undivided interest in real property.

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Title Standard 9.17 appears to address this issue, including referencing Iowa Code Section 633.603, which requires the opening of a conservatorship proceeding in Iowa. Iowa Code Section 633.652 further provides that conservators must follow the same procedure as personal representatives of an estate to sell real property. Thus, to convey clean title, must a conservatorship be opened in Iowa accompanied by a petition to sell the property? A response from the Probate Section stated that all that should be needed is to register the Minnesota conservatorship in Iowa pursuant to the “Iowa Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act,” Iowa Code Section 633.700 et seq.

QUESTION: If the land is to be sold by the owners, including the ward, what steps must be taken to convey clean title? Do you agree with the above course of action notwithstanding the possibly outdated reference in the Title Standard 9.17?

See also List Serve Question #19

8. Temporary Conservators. See Iowa Code §633.573. “Such conditions, as the court shall prescribe.”

a. Use in real estate transactions. To preserve the status quo during a pending involuntary proceeding

9. Limited Conservators. See Iowa Code §633.572, allowing the court to determine what powers the ward retains to deal with his or her own property. See Iowa Title Std. 9.17, considering this could reserve to the ward the right to sell or otherwise manage his or her own real estate without conservator participation.

10. Conservatorships for Absentees. a. “When a person owns property located in the state of Iowa, the person’s

whereabouts are unknown, and no provision for the care, control, and supervision of such property has been made, with the result that such property is likely to be lost or damaged, or that the dependents of such owner are likely to be deprived of means of support because of such absence, it shall be proper for any person to file with the clerk a petition for the appointment of a conservator of such property of the absentee.” Iowa Code § 633.580.

b. Several state statutes require that the missing person be a resident of the state before the jurisdiction of the appropriate court may be invoked. The remaining states, including Iowa, require only that the absentee be an owner of property within the state. Property Law: The Estates of Missing Persons. 1966 Duke Law Journal, 745-778. No period of absence is required to invoke the Iowa statute.

11. Co-conservators a. Power to act alone.

a.i. None, if not specific to granting document. b. Execution of documents

12. Adjudication of Incompetency a. A person previously adjudicated “incompetent” cannot give a valid conveyance.

Galt v. Provan, 108 Iowa 561, 79 N.W. 357 (1899). b. “Incompetent” means the condition of any person who has been adjudicated by a

court to meet at least one of the following conditions:

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b.i. To have a decision-making capacity which is so impaired that the person is unable to care for the person's personal safety or to attend to or provide for necessities for the person such as food, shelter, clothing, or medical care, without which physical injury or illness may occur.

b.ii. To have a decision-making capacity which is so impaired that the person is unable to make, communicate, or carry out important decisions concerning the person's financial affairs

b.iii. To have a decision-making capacity which is so impaired that both paragraphs “a” and “b” are applicable to the person. Iowa Code §633.3(23).

c. Incompetency Test. “Whether the person possesses sufficient mind to understand . . . the nature and effect of the act in which the person is engaged.” Iowa Code §229.27(2).

d. “Hospitalization … , either voluntarily or involuntarily, does not constitute a finding of nor equate with nor raise a presumption of incompetency, nor cause the person so hospitalized to be deemed a person of unsound mind nor a person under legal disability for any purpose.” Iowa Code Ann. § 229.27(1).

e. “[T]he fact that a person is mentally ill and in need of treatment for that illness but because of the illness lacks sufficient judgment to make responsible decisions with respect to the person's hospitalization or treatment does not necessarily mean that that person is incapable of transacting business on any subject.” Iowa Code § 229.27(2).

f. The appointment of a conservator does not mean that the ward has been adjudicated “of unsound mind.” Iowa Code §633.636. Presumption that a ward may execute valid wills provided they have the requisite testamentary capacity. See Iowa Code §633.637; In re Guardianship of Hawk’s Guardianship, 288 N.W. 114 (1939).

g. See §597.6 Mental Illness – Conveyance of Property, et seq. 597.6 MENTAL ILLNESS -- CONVEYANCE OF PROPERTY. Where either the husband or wife is mentally ill and incapable of executing a

deed or mortgage relinquishing, conveying, or encumbering the husband's or wife's right to the real property of the other, including the homestead, the other may (emphasis added) petition the district court of the county of that spouse's residence or the county where the real estate to be conveyed or encumbered is situated, setting forth the facts and praying for an order authorizing the applicant or some other person to execute a deed or mortgage and relinquish or encumber the interest of the person with mental illness in said real estate.

597.7 PROCEEDINGS. The petition shall be verified by the petitioner, and filed in the office of the clerk of the district court of the proper county, notice of which shall be given as in other cases. Upon completed service, the court shall appoint some responsible attorney thereof guardian for the person alleged to be mentally ill, who shall ascertain the propriety, good faith, and necessity of the prayer of the petitioner, and may resist the application by making any legal or equitable defense thereto, and the guardian shall be allowed by the court a reasonable compensation to be paid as the other costs.

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597.8 DECREE. Upon the hearing of the petition the court, if satisfied that it is made in good faith by the petitioner, and the petitioner is a proper person to exercise the power and make the conveyance or mortgage, and it is necessary and proper, shall enter a decree authorizing the execution of the conveyance or mortgage for and in the name of such husband or wife by such person as the court may appoint.

h. Incompetent Spouse. h.i. Iowa Code § 633.238. Elective share of surviving spouse

“1. The elective share of the surviving spouse shall be limited to all of the following: a. One-third in value of all the legal or equitable estates in real property possessed by the decedent at any time during the marriage which have not been sold on execution or other judicial sale, and to which the surviving spouse has made no express written relinquishment of right, including but not limited to any relinquishments of rights described in paragraph “d”.”

h.ii. Iowa Code § 633.244. Incompetent Spouse - Election by Court “In case an affidavit is filed that the surviving spouse is incapable of determining whether to take the elective share, or to elect to receive a life estate in the homestead, and does not have a conservator, the court shall fix a time and place of hearing on the matter and cause a notice thereof to be served upon the surviving spouse in such manner and for such time as the court may direct. At the hearing, a guardian ad litem shall be appointed to represent the spouse and the court shall enter such orders as it deems appropriate under the circumstances. The guardian ad litem shall be a practicing attorney.”

h.iii. Iowa Code § 633.242. Rights of election personal to surviving spouse. “The right of the surviving spouse to take an elective share, and the right of the surviving spouse to receive a life estate in the homestead, are personal. They are not transferable and cannot be exercised for the spouse subsequent to the spouse's death. If the surviving spouse dies prior to filing an election, it shall be conclusively presumed that the surviving spouse does not take such elective share.”

h.iii.1. Can a spouse adjudicated as incompetent, release statutory share?

h.iii.2. See Matter of Estate of Wulf, 471 N.W.2d 850 (Iowa 1991). Presence of a non-owning “spouse’s name as grantor in a conveyance of property owned solely by the other spouse is presumed to merely release inchoate rights of dower and nothing more.”

h.iv. Spouse as Conservator Conveying Real Estate h.iv.1. Best Practices - Spouse will need to execute a court officer

deed in capacity as conservator and a quit claim deed or warranty deed in spouse’s individual capacity in order to release spousal/dower rights.

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h.iv.2. See List Serve Question #9. Spouse could sign twice, or once as long as the granting clause, signature block, and notary showed that he was specifically signing in the dual capacities.

i. List Serve Questions. See #1 in supplement to outline for details.

FACTS: Second marriage. Husband has NO children. Complete interest in farm real estate is vested in Husband. Wife has no interest in Husband’s real estate other than inchoate rights. Wife is diagnosed as being incompetent.

Husband has deed prepared and he and Wife sign it (at the time she was incompetent) and Husband records it. Deed purportedly transfers property to Trustee with income to Wife and remainder to someone outside of Wife’s lineage. Husband dies.

QUESTION: What is the effect of the Deed without having gone through foregoing required statutory process?

Does mentally ill equate to incompetence? Is the deed void ab initio – due to non-compliance with statute (probably if it was homestead, but assume not homestead)? Voidable by Wife’s Conservator for the same reason? Partially valid as to Husband’s interest subject to some form of challenge for some interest or monetary compensation by Wife’s Conservator brought in Husband’s estate? Valid as to Husband’s interest? Some form of Hybrid?

RESPONSE(S): Bottom line up front: Under current law governing findings as to persons suffering "mental illness" I think that (so far as Iowa Code Section 597.6 is concerned) Husband's deed probably stands as legal. Q1: What is effect of deed without having gone through foregoing required statutory process? A1: It's valid and legal, unless and until a court rules otherwise. Q2: Does mentally ill equate to incompetence? A2: No. See initial points below. Q3: Is the deed void ab initio - due to non-compliance with statute (probably if it was homestead, but assume not homestead)? A3: I think not void from inception, unless Wife had been court-adjudicated as incompetent prior to Wife's signing the deed. Compliance with Iowa Code Chapter 597 is not mandatory. It merely establishes a potential course or cause of action for Wife's conservator to challenge a prior conveyance. See the word "may" in Iowa Code Section 597.6. However, also see Allen v. Berryhill's discussion below, about the slippery terms "void" and "voidable". Q4: Voidable by Wife's Conservator for the same reason? A4: Possibly voidable, assuming Wife was only diagnosed incompetent but not so adjudicated at the time of deed execution.

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Diagnosis of mental incompetency and adjudication of mental incompetency are two separate concepts. You suggest a Conservator was appointed for Wife, but do not specify when. At time Wife was "diagnosed incompetent", and was said diagnosis made in connection with adjudication of incompetency? Or later? After Husband's death? Was Husband Wife's initial conservator, and after Husband's departing this life someone else now holds that role? Any invalidity should affect at most only Wife’s statutory share/dower (and any homestead) interests after Husband died. Q5: Partially valid as to Husband's interest subject to some form of challenge for some interest or monetary compensation by Wife's Conservator brought in Husbands estate? A5: Yes, I think so. At least partially and potentially completely valid as to Husband's interest. Potentially subject to some form of challenge for monetary compensation by Wife's Conservator, brought in Husband's estate, for the value of the dower relinquished by Wife. Q6: Valid as to Husband's interest? Q6: Yes, valid as to Husband's interest, at the very least.

…

For What It's Worth Department. Years ago I experienced a similar mental illness/incompetency issue, which to some extent frames my understanding of the void/voidable distinction addressing actions by incompetents. I represented a farmer whose uncle had been under guardianship-conservatorship for 20+ years. From 1981 onward Uncle was confined in the county home suffering severe paranoia and other mental illness. Nephew, his only living relative, served as guardian/conservator. Uncle still fancied himself a farmer and manager of his farms (conservatorship assets). Imagine our surprise when we discovered the old fellow had managed--from the county home--to somehow contact a logging company and enter a contract to log off some 50 acres of his timber! I told the nephew that I thought the contract was void, because uncle had been placed under conservatorship and deprived by the court of control over his affairs. But we talked to the logger, got a copy of the contract, and decided the contract terms were fair. So Nephew ratified the contract. Logger got his logs, and Uncle got to think he was in charge and had some control over his life.

j. Does current state of the law presume to favor that an individual is competent to act?

13. Miscellaneous Issues. a. Septic System Inspection Exemption.

a.i. 455B. 172(11)(a)(3) Exception to Septic Inspection. “A transfer by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust.”

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a.ii. What guardianship owns real estate? a.iii. Even if exempt, buyers can demand inspection and subsequent remedial

actions. a.iv. Woodbury, Monona, and Plymouth county recorders offices do not require

trusts or conservatorships to provide for septic inspections. a.v. See List Serve questions #14, #20.

b. Residential Property Seller Disclosure Statements – Exceptions. b.i. Ordinarily prior to making or accepting a written offer for the transfer of

real estate containing at least one but not more than four dwelling units, the potential transferor must deliver a written disclosure statement to the potential transferee. Iowa Code §§ 558A.1(4) and 558A.2(1).

b.ii. Numerous types of transfers are excluded from the disclosure requirement including, but not limited to, transfers by a fiduciary during the administration of an estate, trust, guardianship or conservatorship, transfers made to a spouse, and transfers by quitclaim deed. See Iowa Code §558A.1(4)(a)-(i).

c. Title Corrective Action by Quit Claim Deed. c.i. Where there is a doubtful conveyance by a conservator, or where a

minor was not represented in a court proceeding by a guardian ad litem, and the minor has since reached majority. Excerpt from list. 1 MARLIN M. VOLZ, JR., IOWA PRACTICE SERIES § 2:13 (2009-2010 ed.).

d. Judgments Quieting Title. d.i. Old judgments

d.i.1. Owner of real estate becomes subject to a guardianship and conservatorship.

d.i.1.a. Judgments are lien for only ten years. Iowa Code §614.1 (6).

d.i.1.b. Judgment can be renewed.

List Serve Question #2. See supplement to outline. FACTS: I'm working on an abstract that has a couple of very old judgments. One is a right to any delinquent support payments from 1978 that was assigned to DHS (Iowa Department of Services) and another was a small claims judgment in 1983 for $65 (with 7% interest). These judgments remain uncancelled of record and the owner of the property later became subject to a guardianship and conservatorship, which is now trying to sell the property. QUESTION: Is there anything that would wipe out these judgments (except a guardianship and conservatorship) or should I just flag it and tell them they must be paid?

d.ii. Child support – ten years from when due, so payment due when child turns 18 – 22 could extend out for a very long time. Each month support payment is a new judgment.

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IOWA POWERS OF ATTORNEY

1. Generally a. A power of attorney is a principal-and-agent relationship between two persons

in which one person, the agent, is authorized in writing by another, the principal, to act in all or limited respects as the principal’s agent. See Iowa Uniform Power of Attorney Act, Iowa Code chapter 633B.

a.i. Powers of attorney are not court administered. a.ii. Power of attorney create “agency” relationships.

a.iii. “Agency” relationships are confidential and fiduciary in character and result from manifestation of consent by one person, the “principal,” that another, the “agent,” shall act on the former’s behalf and subject to the former’s control. Pillsbury Co. v. Ward, 250 N.W.2d 35 (Iowa 1977).

2. POA Benefits a. Simple. b. Inexpensive. c. Avoids court supervision as with a trust or conservatorship. d. Privacy. e. Gifting continued with proper language.

3. POA Concerns a. A tool for financial abuse of incapacitated individuals. b. Acceptance.

4. New Act in 2014. The Iowa Uniform Power of Attorney Act (UPAA) pertaining to powers of attorney (POAs) and codified at 633B. Under the Act, a principal gives an agent the authority to make decisions regarding the principal’s property and finances. Based on the Uniform Power of Attorney (UPOAA) issued by the Uniform Law Commission with some modifications.

5. New terminology a. Agent. We should change our forms to provide for this change. Use “I name

Mary Smith as my Agent” instead of keeping the now incorrect language “I name Mary Smith as my Attorney in Fact.”

b. Incapacity. Not disability. Iowa Code § 633B.4((7). 6. Durability. Iowa Code § 633B.104 establishes a default rule that a POA is durable.

The rationale for this default rule is that a principal who becomes incapacitated generally would prefer to have the agent designated in the POA rather than a court appointed conservator.

7. Fiduciary Duties. One objective of the Act was to address power of attorney abuse by spelling out the nature and extent of the agent’s duties.

a. Mandatory Fiduciary Duties. Section 633B.114 spells out fiduciary duties of an agent that are mandatory and not waivable by the principal. To act in good faith; within the scope of authority granted in the POA; and in accordance

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with the principal’s expectations to the extent known and otherwise in the principal’s best interest.

b. Waivable Default Fiduciary Duties. Duties which can be overridden by express language in a POA, including acting loyally for the principal’s benefit; avoiding conflicts of interests; acting with the care, competence and diligence exercised by agents in similar circumstances; and attempting to preserve the principal’s estate plan to the extent known and consistent with the principal’s best interest. Iowa Code § 633B.114

8. POA Real Estate – Generally a. Powers of attorney that affect real estate should be signed by the principal and

should be duly acknowledged. See Iowa Code § 557.10 (creation of power in relation to real estate must be executed in same manner as deeds of conveyances).

b. The execution of any deed, mortgage, or other written instrument by an attorney-in-fact may be acknowledged by such attorney-in-fact. Iowa Code § 558.36.

c. Recording the power of attorney completes the record title to the real estate involved. The power does not have to specifically describe the real estate involved in a specific transaction and may just grant the attorney-in-fact the general power to convey the principal’s real estate, except with respect to conveyance of the homestead. See Iowa Code § 561.13.

d. Copy of POA. Iowa Code §633B.106(4). “Except as otherwise provided by law, a photocopy or electronically transmitted copy of an original power of attorney has the same effect as the original.”

List Serve Question #22, Recording of POA

FACTS: I have always operated under the rule that any conveyance or grant of interest in land (including execution of mortgage) under a Power of Attorney, requires that said Power of Attorney be recorded. I have encountered some resistance to this stance for execution of a mortgage, where spouse signed as Power of Attorney for other spouse.

QUESTION: Am I incorrect to require recording of the Power of Attorney

RESPONSE(S): I’m with you. Not of record means of no use to the next title examiner!

* * * *

I’ve actually had more resistance from the non-title holder spouse complaining, “Why the heck do I need to sign the (deed/mortgage), I’m not on title. And I’m not going to sign it.” Then I have to explain Iowa law, and why they do need to sign. And they are grumbling all the while they are signing, and thinking I am the source of all their problems of the day.

* * * *

Also, if the original Power of Attorney is lost, can a copy of the Power of Attorney be recorded together with an agent certification under Iowa Code Section 633B.302?

* * * *

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Yes, most recorders will take a copy with a certification/affidavit of the copy being a true copy.

List Serve Question #23. Lost POA. Does title Standard 1.1 or Iowa Code 633B.106(4) help?

List Serve Question #24. Missing POA.

Recite that:

1) the Bank granted a valid Power of Attorney naming its Agent X to convey property.

2) this Power of Attorney was in force as of the date that Agent X signed the Quit Claim Deed of conveyance.

3) the Power of Attorney document was lost before it could be filed of record, but certainly did exist.

4) the Bank and Agent X both intended the act of Agent X to convey all of Bank's right, title and interest in the property.

5) the Bank claims no legal nor equitable interest in the property.

List Serve Question #25.

An affidavit filed with a copy of the Power of Attorney attached which states that it is an exact copy of the original and that the original cannot be found.

The new Uniform Power of Attorney statute says that a copy has the same effect as an original, but it does not go into effect until July 1, 2014.

RESPONSE(S): If three years have passed since the affidavit was recorded, I would think you could rely on Iowa Code Section 558.8. The facts set forth in the affidavit become conclusive after it has been recorded for three years, and I would argue that includes the facts set forth in the copy of the Power of Attorney attached to the affidavit.

The current statute specifically authorizes this procedure. See Iowa Code Section 633B.1(2).

9. Authority of Agent a. Actual Authority. When a principal intentionally confers authority on the

agent either by writing or through other conduct that, reasonably interpreted, allows the agent to believe he or she has power to act. Dillon v. City of Davenport, 366 N.W.2d 918 (Iowa 1985).

a.i. Actual authority includes both “express” and “implied” authority. Express authority is that specifically mentioned by the principal in setting out the extent of the agent’s duties. Implied authority includes all such incidental authority as is necessary, usual, and proper to effectuate the main authority expressly given. Newberry v. Barth, Inc., 252 N.W.2d 711 (Iowa 1977).

a.ii. Whatever an agent does within the scope of actual authority binds the principal. Dillon.

b. Apparent authority for an agent to act is that which, although not actually granted, has been knowingly permitted by the principal or which the principal holds the agent out as possessing. Mayrath Co. v. Helgeson, 139 N.W.2d 303

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(Iowa 1966)(holding principal liable to third parties for actions of agents taken within apparent scope of authority).

b.i. See List Serve Question #27. c. Ordinarily, agents are not liable on contracts of their principals unless the

principal is undisclosed. Powell v. Khodari-Intergreen Co., 334 N.W.2d 127 (Iowa 1983).

d. Execution. d.i. Signature. Attorneys-in-fact, in order to avoid personal liability,

should always disclose their agency status and their principal (e.g., “______, as attorney-in-fact for ___________, under power of attorney dated ___________”). Issue – Principal may need to ratify the actions of the attorney-in-fact.

d.ii. Acknowledgement. Iowa Code 9B.16. Short Form. 2. For an acknowledgment in a representative capacity:

State of ......................... [County] of ......................... This record was acknowledged before me on..........(Date) by....................Name(s) of individual(s) as (type of authority, such as officer or trustee) of (name of party on behalf of whom record was executed). ......................... Signature of notarial officer Stamp [....................] Title of office [My commission expires:..........] List Serve Question #26. Signing in a Representative Capacity. FACTS: We recently encountered a situation where buyer’s attorney rejected a deed signature. It was typed under the signature line “ Lawrence Smith by Craig Jones, as attorney in fact.” The seller signed in cursive “ Lawrence Smith by Craig Jones, attorney in fact.” The buyer’s attorney said that the deed set up was correct but that that form of signature was unacceptable. He said an attorney in fact must sign just his name, not the name of the principal, just like a corporate officer signs only his or her name, not the name of the company.

I am always ready to learn, but this seems form over substance to me because the attorney in fact did sign his name indicating he was not signing in his personal capacity but in his attorney in fact capacity. RESPONSE(S): The new Iowa State Bar Association Power of Attorney form instructs the agent to sign exactly as was done on the deed.

* * * *

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I see nothing wrong with how the signature was handled. I always use “(Principal’s Name), by (Agent)”. When signing under a Power of Attorney myself, I print the principal’s name, “By (my normal signature)”. The acknowledgment may not be in exactly the same form as set out in Iowa Code Section 9B.16(2), but I would not have objected to it. It may be true that this is “easy to correct before closing”, and I am sure we have all cured title objections we do not agree with, just to avoid hassle and delays.

10. Iowa Code §633B.204. Real Property

Unless the power of attorney otherwise provides and subject to section 633B.201, language in a power of attorney granting general authority with respect to real property authorizes the agent to do all of the following: 1. Demand, buy, lease, receive, accept as a gift or as security for an extension of credit, or otherwise acquire or reject an interest in real property or a right incident to real property. 2. Sell; exchange; convey with or without covenants, representations, or warranties; quitclaim; release; surrender; retain title for security; encumber; partition; consent to partitioning; be subject to an easement or covenant; subdivide; apply for zoning or other governmental permits; plat or consent to platting; develop; grant an option concerning; lease; sublease; contribute to an entity in exchange for an interest in that entity; or otherwise grant or dispose of an interest in real property or a right incident to real property, including the transfer or release of any and all of the principal's homestead rights under section 561.13 and chapter 597. 3. Pledge or mortgage an interest in real property or a right incident to real property as security to borrow money or pay, renew, or extend the time of payment of a debt of the principal or a debt guaranteed by the principal, including the transfer or release of any and all of the principal's homestead rights under section 561.13 and chapter 597. 4. Release, assign, satisfy, or enforce by litigation or otherwise, a mortgage, deed of trust, conditional sale contract, encumbrance, lien, or other claim to real property which exists or is asserted. 5. Manage or conserve an interest in real property or a right incident to real property owned or claimed to be owned by the principal, including but not limited to by doing all of the following: a. Insuring against liability or casualty or other loss. b. Obtaining or regaining possession of or protecting the interest or right by litigation or otherwise. c. Paying, assessing, compromising, or contesting taxes or assessments or applying for and receiving refunds in connection with them. d. Purchasing supplies, hiring assistance or labor, and making repairs or alterations to the real property. 6. Use, develop, alter, replace, remove, erect, or install structures or other improvements upon real property in or incident to which the principal has, or claims to have, an interest or right.

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7. Participate in a reorganization with respect to real property or an entity that owns an interest in or a right incident to real property and receive, hold, and act with respect to stocks and bonds or other property received in a plan of reorganization, including by doing any of the following: a. By selling or otherwise disposing of the stocks, bonds, or other property. b. By exercising or selling an option, right of conversion, or similar right. c. By exercising any voting rights in person or by proxy. 8. Change the form of title of an interest in or right incident to real property. 9. Dedicate to public use, with or without consideration, easements or other real property in which the principal has, or claims to have, an interest.

List Serve Question #28. Affidavit by Power of Attorney.

FACTS: An abstract contains entries related to real estate transferred by a Trust. Entries include an Affidavit re: Inheritance Tax, and the Purchaser’s Affidavit. Both such Affidavits were shown to be executed by a Power of Attorney for the Affiant.

QUESTION: Can such Affidavit be signed and executed by a Power of Attorney for the Affiant?

RESPONSE(S): The Power of Attorney is under the same penalties for perjury as the principal would be, and the Power of Attorney likely knows as much or more about the principal’s affairs that the principal does. I see no reason to object on this basis.

* * * *

I think an affidavit is supposed to show what is known by the affiant from the affiant’s personal knowledge. I don’t see how the agent could be affirming that his or her principal knows something. However, if the agent is merely identifying how the agent has come to know something, as a result of being the agent, and the facts are now within the personal knowledge of the agent, that would be acceptable to me. That should work for the Affidavit re: Inheritance Tax, but I would want the Trustee to sign the Trustee’s Affidavit (assuming this is a revocable trust). Of course, the Purchaser’s Affidavit would be signed by a purchaser, so that should not be a problem.

See List Serve Question #30. Requiring Specific Authorization pursuant to 633B.201(1)(g) to exercise fiduciary Powers.

11. Types a. Specific/Limited Purpose.

a.i. transferring real estate; a.ii. providing access and control over bank accounts;

a.iii. transferring title to automobiles; a.iv. handling tax matters (IRS Form 2848).

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NOTE: Drafters must be careful to provide language broad enough to enable the attorney-in-fact to do all of the various acts the principal expects an attorney-in-fact to do.

List Serve Question #27. Limited Power of Attorney. FACTS: August 21, 2013 – Seller deeds real estate to Buyer by Attorney-in-Fact. Buyer gives mortgage to Bank 1. Bank 1 assigns mortgage to Bank 2.

August 23, 2013 – Deed, Mortgage and Assignment are recorded.

September 25, 2013 – Document titled “Limited Power of Attorney – HUD-1 Form” recorded which is dated August 13, 2013. Limited Power of Attorney states as follows:

“Seller hereby appoints Agent for the limited purpose of completing the sale of (address and legal description). I specifically grant Agent full power and authority to execute in my stead on my behalf the HUD-1 Settlement Statement. The signature of my attorney-in-fact, indicating his/her fiduciary capacity, shall be acceptable as my own and this attorney in fact shall have full power and authority to do and perform any act in connection with the above power which I could do personally.”

The Agent under the Limited Power of Attorney is also the notary who acknowledged the signature of the Seller on the Limited Power of Attorney. I see from Iowa Code Section 9B.4 that the notarial act is voidable, but is not per se void.

List Serve Question #3. Limited Power of Attorney FACTS: Limited Power of Attorney in which Federal Home Loan Mortgage Corporation (Freddie Mac) by Jane Doe, Assistant Treasurer appoints Chicago Title Insurance Company dba Service Link, as attorney-in-fact, with full power and authority…to execute deeds and instruments that convey title to real estate owned by Freddie Mac.

Deed from Federal Home Loan Mortgage Corporation by Chicago Title Insurance Company, its Attorney in Fact, by Ann Smith, AVP to John Homeowner.

Neither document states that Jane Doe or Ann Smith has authority to sign on behalf of the companies.

QUESTION: Is the Limited Power of Attorney to Chicago Title sufficient? Would you pass on the title?

RESPONSE(S): Reliance upon the Limited Power of Attorney seems reasonable in these circumstances. State ex rel. Havner v. Associated Packing Co., 219 Iowa 419, 258 N.W. 456 (1935)

b. Plenary. b.i. Powers of attorney may be established to give the attorney-in-fact full

authority to handle all of the principal’s business affairs. 12. Agent’s Power to Make Elections for Surviving Spouse

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A. None. See 633.236 and 633.242 – power is personal to spouse or spouse’s conservator if one is appointed.

B. See provisions of 633.244 for procedure to have guardian ad litem appointed if spouse is incapable to make election.

C. See Durable Power of Attorney Short Form #119 which authorizes agent to relinquish all rights of dower, homestead and distributive share in real estate.

D. Incompetent spouse. Iowa Code 633.244 – procedure to have guardian ad litem appointed if spouse is incapable to elect.

List Serve Question #3 Facts: H and W own home as JT. H dies November 2014. No administration of H’s estate. W dies March 2016. Affidavit of Surviving Spouse” executed by a third party with signing showing as December 2014, but not recorded until March 2016 after W’s death, but before W’s Will admitted to probate. Nothing is of record that the person signing the Affidavit is POA or Conservator of W. Is the Affidavit valid? Can the estate convey clear title because there was no showing that’s H’s share is free and clear of federal estate tax?

e. Is there an issue of timing and capacity of agent after death of principal f. How to correct it with subsequent Affidavit? g. How does Iowa Code 558.66(3) help? “An affidavit of or on behalf of a

surviving joint tenant or a person who owns the remainder interest.”

List Serve Question #5. Does POA have power to make elections for surviving spouse? For background discussion. Respondent Note: If incompetent spouse – look at Iowa Code Section 633.244 – procedure to have guardian ad litem appointed if spouse is incapable to elect.

13. Hypothetical: Real estate owned by Agent’s mother who has dementia; agent

executes deed from mother to mother and agent as joint tenants. POA under new statute 633B regarding authority to make gifts to self.

14. Co-Agents - Power to act alone a. Section 633B.111 provides that a principal may designate a coagent or coagents in

the POA. b. Iowa Default Rules. Powers held by co-agents shall be exercised by majority rule and

that in case of impasse an agent may petition the court to resolve the resulting conflict or a majority of agents may consent to alternative dispute resolution. This rule differs from the UPOAA default rule that co-agents may exercise their authority independently. If one or more agents resigns or becomes unable to act, the remaining coagents may act.

c. Because of potential problems associated with co-agents such as difficulties in communication and conflicts between agents, the UPOAA comment suggests that a” more prudent practice is generally to name one original agent and one or more successor agents” and that “[i]f desirable, a principal may give the original agent

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authority to delegate the agent’s authority during periods when the agent is temporarily unavailable to serve.” §111.cmt.

d. So, what happens if a deed, mortgage or affidavit is executed only by one agent in each of the following situations (void, voidable, other)

d.i. POA states that each agent may act alone d.ii. POA states that all must agree

d.iii. POA states that majority vote required e. Include a process to resolve the dispute

15. Successor Agents a. Section 633B.111 provides that a principal may designate a successor agent or agents

to act in the event that an agent declines to serve, resigns, dies, becomes incapacitated or is not qualified to serve, establishing a default rule that a successor agent has the same authority as the original agent had.

b. In some circumstances, however, this may not be appropriate in which case the principal may choose to override the default rule through express language in the POA. A UPOAA comment gives as an example a principal who wishes to authorize a spouse-agent but not an adult child successor agent to create, amend, or revoke an inter vivos trust, or to create or change survivorship and beneficiary designations.

16. Power of Attorney vs. Conservator a. Does the appointment of a conservator by court order automatically revoke a

previously executed power of attorney? List Serve Question #21

FACTS: I am looking at an abstract showing appointment of conservator in 2009 and conveyance of real estate by attorney in fact in 2011.

RESPONSE(S): “I believe the conservator has the power to revoke the Power of Attorney, but the Power of Attorney is not automatically revoked. However, any conveyance made after filing the petition is presumed to be a fraud unless approved by the Court. Was there court approval?”

“Is there authority that the conveyance is presumed fraudulent? There was no court approval in this case.”

* * * *

My opinion, Power of Attorney had very limited if any, authority after Conservator appointed. Opine, only Conservator could transfer title to any real estate; further submit Conservator needs Court authority to transfer same. Review Iowa Code Section 622.636 et seq.

17. Power of Attorney vs. Living Trust

See List Serve Question #18. Woman executes a “Farm Management” Power of Attorney in 2002 giving Nephew the authority to convey interest in property, and lease and manage Blackacre. Power of Attorney indicates it shall not expire.

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Woman executes Living Trust in 2005 and conveys Blackacre into Living Trust. Terms of the trust grant Woman as Trustee the authority to sell, manage, lease, convey, etc Blackacre.

Living Trust by its terms does not explicitly revoke Power of Attorney.

Terms of Living Trust indicate Woman is Trustee until her death when her two children become Successor Co-Trustees.

QUESTION: Does the 2005 Living Trust automatically trump 2002 Farm Management Power of Attorney? If woman does not have contractual or testamentary capacity, must a conservatorship be filed? Do actions of the parties of letting Nephew manage farm between 2002 and present impact who has authority to sign Real Estate Contract?

a. Should court take jurisdiction? b. Any different result if successor trustee named in event of incapacity

b.i. Author: Yes, as successor trustee can act in the place of the principal and void POA and manage assets owned by trust.

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RELEVANT IOWA LAND TITLE STANDARDS –

CONSERVATORSHIPS AND POWERS OF ATTORNEY

5.6 PROBLEM:

Revised 6/2010 Is a release of a spouse’s statutory share or homestead rights sufficient if made by one spouse acting as an attorney-in-fact for the other under a duly executed power of attorney? STANDARD: Yes. Authority:

Iowa Code §§ 561.13, 597.5, and 633.211(1), .212(1) and .238(1) (2009). COMMENT: The legal description of a homestead property no longer needs to be included in the power of attorney as to instruments executed on or after April 16. 2007 (2007 Iowa Acts Chapter 68, H.F. 298). As to instruments executed prior to April 16, 2007, the power of attorney pursuant to which such instruments were executed would need to have the legal description of the homestead included. The statutory share of the spouse, even though inchoate while the owner spouse is alive, would be property subject to the provisions of Iowa Code § 597.5 allowing one spouse to appoint the other as an attorney-in-fact to dispose of the appointing spouse’s property. A power of attorney affecting rights in real estate should be filed of record in the county or counties where the property affected is located, so it will appear of record as evidence of the authority of the attorney-in-fact to convey the interest of the appointing spouse. The spouse’s homestead and statutory share claims become unenforceable if no suit or notice of claim has been filed on behalf of the spouse under Iowa Code § 614.15 within ten years of the date of the conveyance. A deed given in satisfaction of a contract is not governed by this Standard but is subject to the provisions of Standard 5.7.

© 2011, The Iowa State Bar Association, 625 East Court Avenue, Des Moines, IA 50309-1904

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5.7 PROBLEM:

Revised 1/06 When an owner and spouse enter into a contract selling real estate and the contract is recorded, is it necessary for the owner’s spouse to join in the execution of the deed given to fulfill the contract? STANDARD: No. Once a spouse has relinquished homestead rights and statutory share in a real estate contract, it is not necessary for the spouse who has relinquished such rights to execute a second instrument, such as the deed given in fulfillment of the contract. In the event a contract seller is single and marries subsequent to the execution of the contract, or the interest of a contract seller is conveyed or transferred to a married person, nothing is required from the new spouse or the spouse of the married transferee since the legal interest held by the contract seller is only personal property. Because of equitable conversion, the contract seller holds merely a security interest in the property. This Standard applies only to the situation where the spouse has no record title interest. Authority:

Iowa Code §§ 561.13, 597.5 and 633.211(1), .212(1) and .238(1) (2005). © 2011, The Iowa State Bar Association, 625 East Court Avenue, Des Moines, IA 50309-1904

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6.4 PROBLEM: Rev. 3/2005

When is the failure to appoint a guardian ad litem for a minor, incompetent or unborn

heir defendant a jurisdictional defect? STANDARD:

A guardian ad litem need not be appointed for a minor or incompetent if there is some other person described in Iowa R. Civ. P. 1.305 who may be served on behalf of the minor or incompetent. If there is no such person, a guardian ad litem must be appointed to be served and to defend for the minor or incompetent.

A guardian ad litem need not be appointed for others later born if the doctrine of virtual representation applies under Iowa R. Civ. P. 1.278. If the doctrine of virtual representation does not apply, a guardian ad litem must be appointed to be served and to defend for others later born. Authority:

Iowa R. Civ. P. 1.211. Iowa R. Civ. P. 1.278. Iowa R. Civ. P. 1.305. Irwin v. Keokuk Sav. Bank & Trust Co., 218 Iowa 477, 255 N.W. 671 (1934). COMMENT:

If original notice on the minor or incompetent is served on behalf of one who is the guardian or other fiduciary and the guardian or fiduciary is the only person who would be available upon whom service could be made, Iowa R. Civ. P. 1.305(2) and 1.305(3) provide that the court or a judge shall appoint, without prior notice on the ward, a guardian ad litem upon whom service shall be made and who shall defend for the minor or incompetent. Iowa R. Civ. P. 1.211 provides that no judgment without a defense shall be entered against a minor or incompetent.

Unless services can be made on the guardian, parent or person aged 18 years or more who has care and custody in accordance with Iowa R. Civ. P. 1.305(2), in the case of a minor, a guardian ad litem must be appointed to be served and to defend for the minor in accordance with Iowa R. Civ. P. 1.211.

Unless service can be made on the guardian, spouse or person aged 18 years or more who has care and custody in accordance with Iowa R. Civ. P. 1.305(3), in the case of an incompetent, a guardian ad litem must be appointed to be served and to defend for the incompetent in accordance with Iowa R. Civ. P. 1.211.

Where persons composing a class which may be increased by others later born do or may make a claim affecting specific property involved in an action, a guardian ad litem must be appointed to be served and to defend for others later born in accordance with Iowa R. Civ. P. 1.278, unless all living members of the class are parties to the action.

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CAVEAT:

A judgment entered against a minor or incompetent person without appointment of a guardian ad litem is merely voidable under Iowa R.C.P. 1.211 if the minor or incompetent was actually represented by an attorney or court-appointed guardian. The judgment is void only if the minor or incompetent person received no such representation. The same rules apply to prisoners. In re Marriage of Payne, 341 N.W.2d 772 (Iowa 1983).


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Can a person serving in a representative capacity (such as an executor, conservator or

guardian ad litem), or as an officer of a corporation or as a public official, lawfully acknowledge service of a notice in a probate proceeding or of an original notice in an action at law or equity or other proceeding, which could be served upon such person in a representative capacity? STANDARD: Yes. Anyone serving in a representative capacity which is recognized by law can lawfully acknowledge service of any notice, whether in a probate proceeding or in an action at law or equity or other proceeding, which could be served on such person in a representative capacity, where service is directed or required by either statute of Iowa or by proper order of the court. Authority:

Collinson v. City of Dubuque, 242 Iowa 986, 47 N.W. 2d 839 (1951). McCartney v. City of Washington, 124 Iowa 382, 100 N.W. 80 (1904). Methods of Service of Original Notice and Return of Service, 26 Iowa L. Rev. 96 (1940). G. F. Madsen, Marshall’s Iowa Title Opinions and Standards §9.3(B) (2d ed. 1978).


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9.1 PROBLEM:

Rev. 9/2009 In proceedings to sell real estate is it necessary to join as a party a person who has filed a claim or a spouse of a distribute or to serve notice upon them? STANDARD: No, unless they have requested notice in accordance with Iowa Code §633.42. Authority: Iowa Code § 633.389 (2009). COMMENT: A sale by a fiduciary is governed by Iowa Code §§ 633.386 through 633.402. A fiduciary must serve a notice of hearing upon “all persons interested,” which Iowa Code § 633.389 defines as including “only distributes in the estate and persons who have requested notice as provided by this probate code.” Claimants and spouses of distributes are not necessary parties, and it is not necessary to serve notice upon them.


Last updated 2015

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Is a showing required to demonstrate that the personal representative has given notice by ordinary mail to each claimant pursuant to Iowa Code §§ 633.230 or .633304? STANDARD: (a) If the real estate is sold during administration of the estate, no.

(b) If the real estate is sold within five years after the estate is closed, yes. (c) If the real estate is sold five years or more after the estate is closed, no.

Authority:

Iowa Code § 633.230 (2009) (notice in intestate estates). Iowa Code § 633.304 (2009) (notice in testate estates). Iowa Code § 633.488 (2009) (five-year statute of repose). COMMENT:

Iowa Code §§ 633.230 and 633.304 require the personal representative to give notice by ordinary mail to a “person believed to own or possess a claim which will not or may not be paid or otherwise satisfied during administration” and to publish a notice of estate administration. When notice is given by mail, proof of such mailing should be by affidavit or certified statement under Iowa Code § 622.1. Likewise, if the personal representative believes there is not such “person believed to own or possess a claim which will not or may not be paid or otherwise satisfied during administration” upon whom to serve a notice, a showing should be made by an affidavit, certified statement, or final report to that effect. See also Iowa Land Title Standard 9.5.


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9.17 PROBLEM: What showing must be made in the abstract in connection with a conveyance from a conservator? STANDARD: The abstract should show: 1. Procedures to Appoint Conservator A. Petition to appoint the conservator showing the following portions thereof: 1. whether the petition is voluntary or involuntary; 2. whether the proposed ward is a minor or an adult; and 3. whether the proposed ward is married and if so, the name of his or

her spouse, and if none, the name of his or her adult children, if this information is contained in the petition, and if it is not stated in the petition, the same must be established and shown in the abstract by other documents of record.

B. Perfection of notice of: (a) the date set for hearing on the petition, (b) the date set for hearing on representation, (c) appointment of counsel, if appropriate, (d) notice of the right to representation, to be personally present and (e) a description of conservatorship’s powers.

1. Parties Who Must Receive Notice a. If the petition is voluntary, no notice is required. b. If the petition is involuntary and the proposed ward is an adult, the notice should be served upon: (1) the ward; (2) the ward’s spouse, if any, and if none, then on the ward’s adult children, if any; and

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(3) the court-appointed representative, if any, or upon the ward’s

own legal counsel if reflected in the court’s order establishing that a representative is not necessary because of existing legal counsel (Iowa Code §633.576).

c. If the proposed ward is a minor, notice to the following: (1) the ward (Iowa Rule of Civ. P. 1.305(2)); (2) if the court determines the ward is entitled to representation, then to said representative; (3) if no representative is appointed and if Iowa Rule of Civ. P. 1.305(2) is applicable, then to the guardian ad litem appointed by the court for the minor ward; and (4) to the parents of the minor ward unless their consent is on file. 2. Manner Notice is Served a. The manner of service of notice is that of original notice unless

otherwise ordered by the court, in which event the notice must comply with said order. Service of notice on required recipient other than the ward is by mailed notice (Iowa Code §633.568 and §633.40(5)).

b. Either included in the notice of the petition to appoint conservator or

by separate notice, serve upon the proposed ward notice in compliance with Iowa Code §633.576 advising the proposed ward of the conservatorship’s powers and the ward’s rights to representation.

C. Orders of the court abstracted briefly: 1. An order indicating whether the court has appointed a representative for the proposed ward plus compliance with the notice requirements, if any, established by the court for a hearing to determine representation and findings of fact regarding notice of right to representation and to be present at said hearing (Iowa Code §633.575). 2. An order appointing a guardian ad litem on behalf of the ward where the court has determined that no representatives shall be appointed for the proposed ward who is a minor or adult named in an involuntary proceeding.

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3. An order by the court appointing the conservator. D. Letters of Appointment issued by the Clerk of Court under the seal of the court. E. The report of the attorney representing the ward reflecting compliance with the requirements of Iowa Code §633.575(4) and (5), if applicable. II. Procedures to Support Sale of Real Property A. The procedure to support a court officer’s deed by the appointed conservator

follows the procedures required for the executor or administrator to sell real property in an intestate estate or where the Last Will and Testament does not contain a power of sale (Iowa Code §633.652).

B. Notice to interested parties of the hearing on the petition for sale of real property

includes the ward and such other parties as the court may determine to be interested parties. COMMENTS

A. For sale by a foreign conservator, see Iowa Code §633.603 et seq. B. For sale by a temporary conservator, see Iowa Code §633.573. Note that the

appointment of the temporary conservator is subject to “such conditions” as the court shall prescribe”. These conditions may restrict the power of the temporary conservator to sell real property. The abstract should reflect such conditions.

C. For conservatorship for absentees, see Iowa Code §633.580 et seq. D. Caveat. This title standard is based upon the provisions of the 2002 Iowa Code

which becomes effective on July 1, 2002. The conservatorship proceedings involving the sale of the ward’s real property should comply with the conservatorship’s opening procedures, including the recipients of notice, manner of service of notice and if reflected in the applicable code provisions existing at that time which provided different recipients of notice in the conservatorship’s opening procedures and excluded the present provisions for the appointment of a representative of the ward. Note prior amendments occurred in 1985 and 2000.

E. The conservatorship proceedings should be shown briefly by the abstractor

where no sale of real property is undertaken by the conservatorship and the ward subsequently attempts to convey real property. The conservatorship removes the ward’s

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ability to sell real property and will place the title examiner on inquiry notice that an attempted sale by the ward is ineffectual. (Iowa Code §633.637 and §633.639).

F. Caveat. Special attention should be given to the role of a representative for the

ward and a guardian ad litem appointed for the ward. Iowa R. Civ. P. 1.211 requires in involuntary conservatorship proceedings that a guardian ad litem be appointed to represent the proposed ward. See the caveat and Title Standard 6.4. The court in compliance with Iowa Code §633.575 requires the appointment of a representative for an adult ward in an involuntary conservatorship proceeding. Under the same code section, the court may appoint a representative for an adult under a Standby Petition or a proposed minor ward. Service of notice of the hearing on the Petition may be on the proposed ward pursuant to Iowa Rules of Civ. P. 1.305 and 1.306 or on the attorney appointed to represent the proposed ward if Iowa Code §633.568(2)(a) is applicable or if no representative is appointed then on the guardian ad litem if Iowa R. Civ. P. 1.305(2) or 1.35(3) are applicable. This standard makes no comment as to whether or not the same person can be appointed by the court to serve as a guardian ad litem and the representative of the ward.

G. Title Standard 9.8 (citing Iowa Code §633.93) provides for a five-year statute of limitation from the date of recording a fiduciary deed. H. Iowa Code §633.572 allows the court to appoint a limited conservatorship and to

determine what powers the ward retains to deal with his or her own property. Theoretically this could reserve to the ward the right to convey his or her own property without participation by the conservator. Therefore, if a limited conservatorship is involved, the records should reflect whether or not the order pertains to real property and if so, the precise terms thereof.


1. Attempted Release of Statutory Spousal Share by Incompetent Spouse - What’s the Legal Effect or Result? Non-Homestead Property.

FACTS: Second marriage. Husband has NO children. Complete interest in farm real estate is vested in Husband. Wife has no interest in Husband’s real estate other than inchoate rights. Wife is diagnosed as being incompetent. Husband has deed prepared and he and Wife sign it (at the time she was incompetent) and Husband records it. Deed purportedly transfers property to Trustee with income to Wife and remainder to someone outside of Wife’s lineage. Husband dies. Still within plenty of time to open estate for Husband – voluntary or involuntary.

597.6 MENTAL ILLNESS -- CONVEYANCE OF PROPERTY. Where either the husband or wife is mentally ill and incapable ofexecuting a deed or mortgage relinquishing, conveying, or encumberin the husband's or wife's right to the real property of the other, including the homestead, the other may petition the district court of the county of that spouse's residence or the county where the real estate to be conveyed or encumbered is situated, setting forth the facts and praying for an order authorizing the applicant or some other person to execute a deed or mortgage and relinquish or encumber the interest of the person with mental illness in said real estate. 597.7 PROCEEDINGS. The petition shall be verified by the petitioner, and filed in the office of the clerk of the district court of the proper county, notice of which shall be given as in other cases. Upon completed service, the court shall appoint some responsible attorney thereof guardian for the person alleged to be mentally ill, who shall ascertain the propriety, good faith, and necessity of the prayer of the petitioner, and may resist the application by making any legal or equitable defense thereto, and the guardian shall be allowed by the court a reasonable compensation to be paid as the other costs. 597.8 DECREE. Upon the hearing of the petition the court, if satisfied that it is made in good faith by the petitioner, and the petitioner is a proper person to exercise the power and make the conveyance or mortgage, and it is necessary and proper, shall enter a decree authorizing the execution of the conveyance or mortgage for and in the name of such husband or wife by such person as the court may appoint.

QUESTION: What is the effect of the Deed without having gone through foregoing required statutory process? Does mentally ill equate to incompetence? Is the deed void ab initio – due to non-compliance with statute (probably if it was homestead, but assume not homestead)? Voidable by Wife’s Conservator for the same reason? Partially valid as to Husband’s interest subject to some form of challenge for some interest or monetary compensation by Wife’s Conservator brought in Husband’s estate? Valid as to Husband’s interest? Some form of Hybrid?

RESPONSE(S): Bottom line up front: Under current law governing findings as to persons suffering "mental illness" I think that (so far as Iowa Code Section 597.6 is concerned) Husband's deed probably stands as legal. Q1: What is effect of deed without having gone through foregoing required statutory process? A1: It's valid and legal, unless and until a court rules otherwise. Q2: Does mentally ill equate to incompetence? A2: No. See initial points below. Q3: Is the deed void ab initio - due to non-compliance with statute (probably if it was homestead, but assume not homestead)? A3: I think not void from inception, unless Wife had been court-adjudicated as incompetent prior to Wife's signing the deed. Compliance with Iowa Code Chapter 597 is not mandatory. It merely establishes a potential course or cause of action for Wife's conservator to challenge a prior conveyance. See the word "may" in Iowa Code Section 597.6. However, also see Allen v. Berryhill's discussion below, about the slippery terms "void" and "voidable". Q4: Voidable by Wife's Conservator for the same reason? A4: Possibly voidable, assuming Wife was only diagnosed incompetent but not so adjudicated at the time of deed execution. Diagnosis of mental incompetency and adjudication of mental incompetency are two separate concepts. You suggest a Conservator was appointed for Wife, but do not specify when. At time Wife was "diagnosed incompetent", and was said diagnosis made in connection with adjudication of incompetency? Or later? After Husband's death? Was Husband Wife's initial conservator, and after Husband's departing this life someone else now holds that role? Any invalidity should affect at most only Wife’s statutory share/dower (and any homestead) interests after Husband died. Q5: Partially valid as to Husband's interest subject to some form of challenge for some interest or monetary compensation by Wife's Conservator brought in Husbands estate? A5: Yes, I think so. At least partially and potentially completely valid as to Husband's interest. Potentially subject to some form of challenge for monetary compensation by Wife's Conservator, brought in Husband's estate, for the value of the dower relinquished by Wife.

Q6: Valid as to Husband's interest? Q6: Yes, valid as to Husband's interest, at the very least. Possibly relevant notions that occur to me: 1) Who took Wife's acknowledgement on the deed? Did he certify that Wife signed "as her voluntary act and deed"? Can said acknowledgee give evidence about Wife's apparent state of understanding of her act, and mental condition at the time of deed execution? Seems to me that such information would provide strong evidence of her competency at the time, one way or the other. 2) "Mental illness" does not equate to "incompetency". *229.1 Definitions. As used in this chapter, unless the context clearly requires otherwise: (10) "Mental illness" means every type of mental disease or mental disorder... (17) "Seriously mentally impaired" or "serious mental impairment" describes the condition of a person with mental illness and because of that illness lacks sufficient judgment to make responsible decisions... *229.27 Hospitalization not to equate with incompetency -- procedure for finding incompetency due to mental illness. 1. Hospitalization of a person under this chapter, either voluntarily or involuntarily, does not constitute a finding or nor equate with nor raise a presumption of incompetency... 2. The applicant may, in initiating a petition under section 229.6 or at any subsequent time prior to conclusion of the involuntary hospitalization proceeding, also petition the court for a finding that the person is incompetent by reason of mental illness. ... *Robbins v. Iowa Dept. of Inspections and Appeals, 567 N.W.2d 653 (Iowa 1997): "In the absence of a finding of incompetence under Iowa Code section 229.27, an individual hospitalized or detained for treatment of mental illness is not presumed incompetent. Iowa Code § 4.1(15)(1995); see id. § 4.1(21A)(1997)." 3) Both "mental illness" and "incompetency" require professional diagnosis AND legal determination. *229.27(2) supra. *Matter of T.C.F., 400 N.W.2d 544 (Iowa 1987): "It should be noted that the diagnosis of mental illness must be made by a licensed physician. ... "We believe the term “mental illness” as defined in section 229.1(1) and interpreted by a licensed physician is not impermissibly vague. The evidence

showed that there are specific criteria furnished by the American Medical Association, for use in diagnosing manic-depressive disorders, and that those criteria were met in this case." *In re Inquiry Concerning Holien, 612 N.W.2d 789 (Iowa 2000): "To a layperson looking at the facts of this case, it might appear the respondent has a form of mental illness-perhaps paranoia. However, neither psychiatrist who examined her in connection with this proceeding has made a diagnosis of mental illness. It would, of course, be to the respondent's advantage for us to order retirement for *798 disability or encourage her resignation, as opposed to our ordering her removal because of the impact removal would have on her retirement benefits. However, there is no factual basis upon which an order could be entered for her physical or mental disability retirement, and of course, a resignation would have to be initiated by the respondent." You say that "Wife is diagnosed as being incompetent." And make reference to "Wife's conservator". Did a physician diagnose Wife as mentally ill, or incompetent? Was his diagnosis used to justify opening a conservatorship? Or did a physician simply suggest that Wife was ill, and no legal determination was made at that time? 4) Mere existence of mental illness does not by itself render any person "incompetent" to handle his affairs. 4.1 Rules. In the construction of statutes the following rules shall be observed...: 21A. Persons with mental illness. The words "persons with mental illness" include persons with psychosis, persons who are severely depressed, and persons with any type of mental disease or mental disorder... A person who is hospitalized or detained for treatment of mental illness shall not be deemed or presumed to be incompetent in the absence of a finding of incompetence made pursuant to section 229.27. 229.27, supra. Nor does mental illness necessarily render its sufferer "incapable of executing a deed or mortgage relinquishing, conveying, or encumbering the husband's or wife's right to the real property of the other..." I suspect that the standards set in these Iowa Code Sections will govern any actions in Iowa courts involving mental illness claims, without regard to actual statutes employing the terms. Current presumption of Iowa law appears to favor competency to act. 5) Iowa Code Chapter 597 may be out of date as to current standards for evaluating competency.

Iowa Code Sections dealing with "mental illness", now identified as Iowa Code Chapter 229 and Iowa Code Sections 597.6-8, respectively, first appeared in the 1860 Revision of the Iowa Code. Statutes governing determination of "mental illness" sufficient to justify involuntary hospitalization were struck down in 1986 as being too loose to pass constitutional muster today. *See Stamus v. Leonhard, 414 F.Supp. 439 (S.D. Iowa 1987). Subsequently the Iowa Supreme Court accepted and followed that determination. *See B.A.A. v. Chief Medical Officer, University of Iowa Hospitals, 421 N.W.2d 118 (Iowa 1988): "[T]he [Stamus] court held that the old standard was unconstitutionally vague because the imprecision of the standard provided the decision-makers “too much discretion in determining what constitutes mental illness and what is the subject's ‘best interest.’ ” 414 F.Supp. at 452. For example, “the commitment laws can be applied to people who are merely annoying or bothersome to the decision-makers.” Id." Subsequently the Iowa General Assembly rewrote Iowa Code Chapter 229, and has amended it many times, to protect the liberty interests of persons alleged to possess mental illness. No such revisions have occurred to Iowa Code Section 597.6. I strongly suspect that Iowa courts will impose strictures similar to those of Iowa Code Chapter 229 upon the proof needed to set aside deeds under Iowa Code Chapter 597. 6) Wife's situation is (sort of) contemplated in our Probate Code. 633.244 Incompetent spouse -- election by court. In case an affidavit is filed that the surviving spouse is incapable of determining whether to take the elective share, or to elect to receive a life estate in the homestead, ****and does not have a conservator appointed,**** the court shall fix a time and place of hearing on the matter and cause a notice thereof to be served upon the surviving spouse in such manner and for such time as the court may direct. At the hearing, a guardian ad litem shall be appointed to represent the spouse and the court shall enter such orders as it deems appropriate under the circumstances. The guardian ad litem shall be a practicing attorney. Because of the starred clause, this section does not directly apply. Your Wife does have a conservator appointed already, I understand. So I think the conservator bears responsibility to make the spouse's election of whether or not to claim dower. Which necessarily would require a companion decision to open H's estate. Citations in the Iowa Code Annotated, under Iowa Code Section 633.244, contain the following reference which you might want to check. "Surviving spouse who is mentally incompetent as ward of court. Right of election between will and dower to be made by the court for incompetent surviving spouse. March, 1949, 34 Iowa Law Rev. 551, 554."

Petition of Cody, 243 Mich. 553, 220 N.W. 788 (1928) contains an interesting hint that Iowa law provides means to legally remove a dower claim from real estate in case of a wife's incompetency. The Cody case revealed a husband/guardian of an insane wife requesting court approval to pay taxes by mortgaging real estate, and, to accomplish that goal, requesting right to sign the wife's name to a mortgage to clear her dower interest. The courts denied husband relief, as beyond the scope of the Michigan dower statute. The Michigan Supreme Court's ruling contained this interesting quotation: "And in 2 Scribner on Dower (2d Ed.) 303: "In Massachusetts, Ohio, Missouri, Iowa, Virginia, and Wisconsin, provision is made by law for disencumbering the estate of the husband of the contingent dower interest of his wife, in cases where the latter is non compos mentis, and therefore incompetent to act in her own behalf. But, in the absence of legislation of this character, no power is lodged in the courts to divest the dower of an insane wife, nor in any manner to impair her right." Most unfortunately the treatise did not cite whatever Iowa statute to which it referred. Perusing the Code Index, so far as I can tell the relevant statute, if it still exists, must now be either Iowa Code Section 633.244 or Section 597.6. As both sections involve court action I cannot see that they validate Husband's individual action securing Wife's signature. But everyone is presumed to be competent until adjudicated otherwise. 7) One already adjudicated "incompetent" cannot herself give a valid conveyance. Galt v. Provan, 108 Iowa 561, 79 N.W. 357 (1899)(case involving deed given to plaintiff by one afterward court-adjudged incompetent on basis of professional evaluation of her dementia at the time the deed was given): "Our conclusion is that when the deed was made, in 1892, and thereafter, Mrs. Galt was not of sound mind, so as to be competent to dispose of property by deed or by will.... "[Plaintiff] has brought in Janet Galt, and asks an adjudication against her that the deed made to him is valid; and, with our finding of her incompetency to make such a deed, the case must be determined as between plaintiff and Janet Galt." [Plaintiff lost.] 8) Valuation issue: Which generates more value for Wife claiming the dower/ statutory share interest after opening an estate for Husband? or simply accepting the life income interest Husband's deed provides? Answer to this question probably determines what course the conservator elects to follow on his client's behalf. 633.238 Elective share of surviving spouse. 1. The elective share of the surviving spouse shall be limited to all of the following: a. One-third in value of all the legal or equitable estates in real property

possessed by the decedent at any time during the marriage which have not been sold on execution or other judicial sale, and to which the surviving spouse ****has made no express written relinquishment of right****. Certainly Wife made an "express written relinquishment of right" to Husband's farm. Question evolves to this: does the statute allow the dower claim if such express written relinquishment of right was made by one judicially declared "incompetent" to manage her affairs? I think it does, so long as Wife is living when the claim is made. 633.242 Rights of election personal to surviving spouse. The right of the surviving spouse to take an elective share, and the right of the surviving spouse to receive a life estate in the homestead, are personal. They are not transferrable and cannot be exercised for the spouse subsequent to the spouse's death. If the surviving spouse dies prior to filing an election, it shall be conclusively presumed that the surviving spouse does not take an elective share. Wife's signature did not operate as a conveyance, but only as a release ("relinquishment") of her statutory share. Matter of Estate of Wulf, 471 N.W.2d 850 (Iowa 1991): Ordinarily, presence of a non-owning "spouse's name as grantor in a conveyance of property owned solely by the other spouse is presumed to merely release inchoate rights of dower and nothing more." But some authority suggests that Wife, after having been adjudicated incompetent, could not release her statutory share. 28 C.J.S. Dower section 65 Conveyance, Assignment, or Release by Wife pp. 137, 140 (1941): a. In General A wife's inchoate right of dower cannot be granted or assigned, but can only be extinguished, by means of a voluntary release by the wife; the right cannot be separated from the fee. Insanity of wife. An insane wife cannot release her dower, and, except as authorized by statute, the dower of an insane wife cannot be divested by the guardian of such wife or by an order of the court. However, in some jurisdictions, under statute to that effect, an insane wife's dower may be released by judicial proceedings, or by act of the wife's guardian under the court's control. C.J.S. cites to Petition of Cody, 243 Mich. 553, 220 N.W. 788 (1928). To evaluate whether or not to open Husband's estate and file a claim, compare 1) the net present value of the income stream to W during her anticipated remaining lifetime, to 2) one third of the current value of the farm. Decide accordingly.

9) Deed void ab initio versus voidable. I can find no Iowa law directly settling this distinction. A long-ago opinion makes some relevant summations. Most pertinently in the dissent, whose collected authorities the majority appears to endorse while rejecting the conclusion. *Allen v. Berryhill, 27 Iowa 534 (1869) "The subject of the contracts of insane persons was recently before the court in the case of Behrens v. McKenzie (23 Iowa, 333). "The general subject was quite fully examined at that time by the counsel who argued it, and by the court. It was remarked in the opinion delivered therein, that “the decided cases are far from being uniform on the subject of the liability or extent of liability of persons of unsound mind for acts and contracts done and made while in this condition.” * * * “The state of the law is such as to allow us to decide this case upon principle.” "The conflicting and very unsatisfactory state of the authorities thus referred to is so fully exhibited in the separate opinion of our brother COLE (in whose conclusion, however, the other members of the court cannot concur), that it is not deemed necessary more particularly to refer to them in the present opinion. "The peculiarity of the case now under consideration consists in the fact that the representative of the party alleged to be insane, and with whom the contract was made, is the party seeking to have it enforced. It is the sane party to the contract that makes defense, and the defense is that the other party to the contract was totally insane at the time it was entered into. "No such case, that is, no case where it was the sane party who set up as a defense that his adversary was insane, was referred to by counsel, nor is any such referred to among all those which have been so industriously and carefully collected by Mr. Justice COLE. ... "The objection relied on by the defendant is one of the many difficulties which have arisen out of the use of the words “void” and “voidable,” and the uncertain extent of meaning attached to them." ... [Dissent:] "The decision of this case rests, in a large measure, upon the question whether the contracts of a lunatic are absolutely void or only voidable. The language of judges and text-writers upon this question has often been loose and indefinite; and there is an irreconcilable conflict in the authorities upon it. Indeed, the status of lunatics and their rights in court have undergone material changes. ... "Wait v. Maxwell (5 Pick. 217), holds that a deed by a person non compos mentis who is under guardianship is absolutely void; but if not under guardianship, then it conveys a seisin and is voidable only." During the ensuing century and a half no further elucidation seems to appear.

Corpus Juris Secundum proves similarly double minded. 57 C.J.S. Mental Health section 221 Conveyances, p.112 (1992): Some authorities hold the deed of an adjudicated incompetent to be void, while others hold it to be voidable. The adjudication of the grantor's incompetence and the establishment of a guardianship for him is admissible in evidence as bearing on his capacity to execute a deed, and in this connection is evidential not only on the question of the person's mental condition at the time when the competency proceedings were had but also of the continued existence of this condition. While it is held that the conveyance of an individual who has been adjudicated incompetent is merely voidable and not void, it is also held that the conveyance of an adjudicated incompetent is void and not merely voidable. 10) For What It's Worth Department. Years ago I experienced a similar mental illness/incompetency issue, which to some extent frames my understanding of the void/voidable distinction addressing actions by incompetents. I represented a farmer whose uncle had been under guardianship-conservatorship for 20+ years. From 1981 onward Uncle was confined in the county home suffering severe paranoia and other mental illness. Nephew, his only living relative, served as guardian/conservator. Uncle still fancied himself a farmer and manager of his farms (conservatorship assets). Imagine our surprise when we discovered the old fellow had managed--from the county home--to somehow contact a logging company and enter a contract to log off some 50 acres of his timber! I told the nephew that I thought the contract was void, because uncle had been placed under conservatorship and deprived by the court of control over his affairs. But we talked to the logger, got a copy of the contract, and decided the contract terms were fair. So Nephew ratified the contract. Logger got his logs, and Uncle got to think he was in charge and had some control over his life.

2. Old Judgments.

FACTS: I'm working on an abstract that has a couple of very old judgments. One is a right to any delinquent support payments from 1978 that was assigned to DHS (Iowa Department of Services) and another was a small claims judgment in 1983 for $65 (with 7% interest). These judgments remain uncancelled of record and the owner of the property later became subject to a guardianship and conservatorship, which is now trying to sell the property. QUESTION: Is there anything that would wipe out these judgments (except a guardianship and conservatorship) or should I just flag it and tell them they must be paid? RESPONSE(S): You are good to go. Judgments are liens for only ten years. * * * * Yes. But watch child support. Ten years from when due. So there could be a payment due 18 to 22-some years from the divorce decree, plus the 10 year lien. In this case probably ok. * * * * Think you have to renew that judgment though. Ten years, but renewable to 20 years. Or am I making that up? * * * * I don't think you have to renew. The judgement says support until age 18 or whatever. The month due becomes a 10 year lien when due and unpaid. So payment due at age 17 and 11 months is a lien until child is age 27 and 11 months. * * * * Each month's support payment constitutes a new judgment.

3. Affidavit of Surviving Spouse.

FACTS: Husband and wife own home as the usual joint tenants with right of survivorship. Husband dies in November 2014. No administration of the Husband's estate. Wife dies in March 2016. An "Affidavit of Surviving Spouse" is executed by what appears to be a third party, with the signing showing as December 2014, but not recorded until March 2016 after the Wife's death, but before Wife's Will is admitted to probate. Nothing is of record that the person signing the Affidavit of Surviving Spouse is Power of Attorney or Conservator of Wife. From what is in the abstract, this person is simply a third party. My client has made an Offer to Buy the Real Estate to the Executor, which Offer is accepted and the abstract comes to me. QUESTION: Is the Affidavit of Surviving Spouse valid since it was not executed by the surviving spouse, or anyone with authority on her behalf? As such, can the Estate convey clear title because there is not adequate showing that the Husband's share is free and clear of the federal estate tax? RESPONSE(S): I have prepared and filed Affidavit of Surviving Spouse documents in which the Affiant is the surviving spouse’s child. The child recites that they have personal knowledge of the provisions in the Affidavit by virtue of their position as child; that Parent #1 passed away on this date; that Parent #2 became the sole owner of the property at that time; that there was no federal estate tax filing requirement and no Iowa inheritance tax filing requirement due to death of Parent #1; that child is signing the Affidavit because Parent #2 passed away on this date. That has been accepted without issue or question several times. * * * * Iowa Code Section 558.66(3)(b) allows an affidavit executed on behalf of the surviving joint tenant.

4. Can a Conservator Evict a Squatter Without the Ward’s Permission?

FACTS: I am conservator for a disabled veteran who owns a life estate in the house in which he resides. It is a full conservatorship with no limitations. A person (hereafter sponge) moved in with the ward almost a year ago with the ward’s permission, but without my permission. The sponge’s elderly mother owns the remainder interest in the house. While the sponge does some useful things for the ward, I do not trust him. I suspect he takes some of the ward’s weekly spending money and he is now demanding that the conservatorship pay him for doing house chores, such as mowing the lawn. The sponge thinks the house is his because his mother owns the remainder interest. QUESTION: Can I, as conservator, have the sponge evicted even if the ward wants him to stay? To be safe, I would send a thirty day notice of termination of tenancy followed by a forcible entry and detainer action. RESPONSE(S): I had a similar Sponge situation about a year ago. Diminished capacity individual (“Brother”) allowed Sponge to be in house. Sister would get Brother to sign notice for Sponge to vacate. Of course never did. Served notice of trespassing (signed by Brother). Wanted Sheriff or police to remove Sponge as a trespasser. County Sheriff, County Attorney, City Police, City Attorney would not touch it. They said, “We don’t know but that Brother gave permission after the Notices to vacate or trespass were served, to Sponge for him to remain. We don’t want to be subject to claim of improper use of legal process.” So, we opened Guardianship and Conservatorship. Then Sister as Guardian and Conservator served a Notice, which said, to Sponge, “I as Guardian and Conservator do not believe you have a rental agreement with Brother, but whatever agreement you think you had with Brother I as Guardian and Conservator am terminating at the end of the month next at least 30 days from now.” The 30 passed and of course Sponge did not vacate. We served 3 Day Notice to Quit. We filed the FED. At hearing, he came to the court, with all kinds of incoherent prattle to the judge. Luckily the judge cut through the prattle, and ordered possession to the Sister Guardian Conservator. Sponge vacated before Sheriff executed on the Writ. There was some tension between the Sister and Brother, because Brother wanted Sponge, his “friend” to stay. But, the Sister had the authority as Guardian and Conservator to clear Sponge out. Finally with the Order and Writ, the sheriff was willing to remove Sponge. * * * *

It appears you were successful with what I planned to do. However, I am not the ward’s guardian. I am only his conservator. I don’t think this matters for this purpose, but what is your opinion? * * * * I think as Conservator you are controller and protector of all assets, including the house, including expense and wear and tear on the house by Sponge, including appropriation of benefit without compensation by Sponge. Play that card to the fullest. * * * * You are Conservator; not the Guardian Nothing stated that ward is incompetent. If ward is incompetent, ok, different issues. But if ward not incompetent, although totally appreciate concerns, if “sponge” is there because ward wants\invited “sponge” there who\what gives Conservator power\authority to make the decision to remove “sponge”; as appears from emails no hard evidence “sponge” cheating, stealing etc. from Ward. If “sponge” wants money for mowing lawn: a) tell him no: b) pay him unless you have someone else that will mow lawn for free. Question: would you look at this differently if it was a girl “sponge” and not a guy? Would without a doubt plant that seed in mind of Court if representing “sponge” and\or competent ward; your honor does it make a difference if “sponge” is a male friend of male competent ward or if “sponge” is girl friend of male competent ward? I’d want “all my ducks” in a row before headed down the path of attempting to remove “sponge”.

* * * * You are just the conservator, not the guardian. In managing his estate, you must consider the needs and best interests of the veteran who is your ward. If there is no guardian, then the vet has the right to decide who he lives with. Perhaps he prefers living with the other person instead of living alone, even if he does have to pay him for mowing the yard. I would talk with the ward and see what he wants before trying to evict the other person.

* * * * Not sure I agree with this analysis. Ward could live with sponge somewhere other than very valuable asset which is under the control of the conservator. And best “needs and best interests” for conservator relate to the assets, not the living arrangements, which would be involved with a guardian. But this is interesting problem, which is why lawyers get involved. * * * * The needs and best interests that guide the conservator do not relate solely to the assets. Both Iowa Code Section s633.647(8) and 633.576 require doing things in the best interests of the ward. In addition 633.123 require the ward's property to be managed by considering the needs and rights of the ward. Iowa Code Section 633.123 also requires the conservator to consider the circumstances identified in Iowa Code Section 633A.4302, which include administration solely in the interest of the beneficiaries. In short, the conservator

is not supposed to manage the assets just to get the highest return or to conserve the assets to the greatest extent possible. The conservator should be managing the assets by considering the needs and interests of the ward.

* * * * Looks to me like a big difference between “needs and rights”, which are the responsibility of the Conservator to judge, and “wants” as viewed by the ward whose judgment has already been determined to need supervision by a Court of law. Wanting a roommate who steals from a ward is not in the ward’s best interest. It might be malfeasance NOT to evict the visitor.

5. Does Power of Attorney Have Power to Make Elections for Surviving Spouse?

FACTS: I represent an attorney in fact for a surviving spouse. Her husband died testate. He also had a revocable trust which only held a Missouri Farm. The document which granted my client authority to act on behalf of the surviving spouse was on Bar Form 120 General Power of Attorney (revised September of 2007). The document grants broad authority to the attorney in fact. Under Iowa law does an attorney in fact have the authority to elect to receive her elective share under Iowa Code Section 633.236? Except by implication, our new power of attorney statute does not seem to cover this particular power. In addition, Iowa Code Section 633.242 states that the rights are personal to the surviving spouse. In addition, Iowa Code Section 633.244 makes no mention of an attorney in fact having the power and mandates that the court make the election for the spouse if the spouse is incompetent and does not have a conservator. I cannot find any reported cases which address this issue. In an abundance of caution I am considering asking the court for a determination of my clients powers under the power of attorney form and Iowa law. QUESTION: Under Iowa law does an attorney in fact have the authority to elect to receive her elective share under 633.236 of the Code? RESPONSE(S): Short answer to your question: no, agents acting under Power of Attorney instruments are not authorized by Iowa law to make such elections unless they are specifically granted in the Power of Attorney instrument. Explanation: This was a subject discussed at some length during the ISBA Probate, Trust & Estate Planning Section meeting held on August 12, 2016. A proposal to amend Iowa Code Section 633B.204 which would allow an agent acting under a Power of Attorney instrument to relinquish or waive spousal rights was approved for inclusion in the Iowa State Bar Association’s 2017 affirmative legislative agenda. During that discussion, the question as to whether we want to give agents acting under Powers of Attorney instruments authority to make affirmative elections regarding spousal rights (such as taking elective shares) was raised. No specific proposal was presented on that subject, and the sense of those present for the discussion made it clear that (a) the current Power of Attorney chapter does not currently allow agents to make such elections unless they are specifically authorized under the Power of Attorney instrument; and (b) we’ll want to think long and hard about whether we want to amend Iowa Code Chapter 633B to authorize agents to make such affirmative elections. * * * * I agree. have reviewed this recently for a case I am working on. Based upon Iowa Code Sections 633.236 and 633.242 – its personal to the spouse, or the spouse’s conservator if one is appointed.

If incompetent spouse – look at Iowa Code Section 633.244 – procedure to have guardian ad litem appointed if spouse is incapable to elect. There is nothing allowing a Power of Attorney to elect. * * * * That is exactly what happened and I was one of those expressing concern about agents under powers of attorney having the power to make elections regarding spousal rights.

6. Iowa Real Estate/Out-of-State Guardianship/Conservatorship.

FACTS: I’ve been asked to review a wind project lease and easement agreement for a non-resident individual who is serving as the guardian and conservator of his non-resident ward who owns Iowa real estate. Based on the information shown in the documents the drafter of the lease/easement refers to the out-of-state guardianship and conservatorship by the county, file and probate number, etc. to indicate the conservator’s authority to enter into this agreement. I have only been asked to review the content of the wind project lease/ easement. However, my initial concern, even without considering the content of the lease/easement, is that there is no Iowa conservatorship, and the wind project lease/easement is long term with options to extend. I am sure that the out-of-state conservator is not contemplating opening an Iowa conservatorship, and up to this point, has not needed one. I think Iowa Code Sections 633.652 and 633.647 are applicable. These sections refer to leasing and powers of a conservator subject to approval of the Court. In this situation I think a conservatorship needs to be established, an inventory filed as to the Iowa real estate, and that the lease/easement would need to be approved by the Court. QUESTION: Does the conservatorship need to be established in Iowa, an inventory filed as to the Iowa real estate, and the lease/easement be approved by the Court? RESPONSE(S): If the ward's home state has adopted the Uniform Adult Guardianship and Protective Proceedings Act, then perhaps it could be handled as follows without opening another conservatorship in Iowa. 633.719 Registration of protective orders. If a conservator has been appointed in another state and a petition for a protective order is not pending in this state, the conservator appointed in the other state, after giving notice to the appointing court of an intent to register, may register the protective order in this state by filing as a foreign judgment in a court of this state, in any county in which property belonging to the protected person is located, certified copies of the order and letters of office and of any bond.

7. Selling Property in Voluntary Conservatorship.

FACTS: In a petition to sell property in a voluntary conservatorship, is notice required just to the ward or to all children (provided that there are adult children)? The ward is fine with selling the property and I know the petition for the appointment of the conservator itself doesn’t have to be served on the adult children (I think we did anyway), but does the petition to sell property have to be served on the adult children as well? We just have a closing coming up and I’m not sure I can get consent from one of the children in time but I would prefer to do it correctly. QUESTION: Does the petition to sell property have to be served on the adult children? RESPONSE(S): You will want compliance with Title Standard 9.17 cut and pasted in full below, but in most direct answer to your question the standard says:

The procedure to support a court officer’s deed by the appointed conservator follows the procedures required for the executor or administrator to sell real property in an intestate estate or where the Last Will and Testament does not contain a power of sale (Iowa Code §633.652) (which for notice purposes sends you to 633.389) Notice to interested parties of the hearing on the petition for sale of real property includes the ward and such other parties as the court may determine to be interested parties.

9.17 PROBLEM: What showing must be made in the abstract in connection with a conveyance from a conservator? STANDARD:

The abstract should show:

1. Procedures to Appoint Conservator

A. Petition to appoint the conservator showing the following portions thereof:

1. whether the petition is voluntary of involuntary; 2. whether the proposed ward is a minor or an adult; and 3. whether the proposed ward is married and if so, the name of his or

her spouse, and if none, the name of his or her adult children, if this information is contained in the petition, and if it is not stated in the petition, the same must be established and shown in the abstract by other documents of record.

B. Perfection of notice of: (a) the date set for hearing on the petition,

(b) the date set for hearing on representation, (c) appointment of counsel, if appropriate, (d) notice of the right to representation, to be personally present and (e) a description of conservatorship’s powers.

1. Parties Who Must Receive Notice

a. If the petition is voluntary, no notice is required. b. If the petition is involuntary and the proposed ward is an adult, the

notice should be served upon:

(1) the ward; (2) the ward’s spouse, if any, and if none, then on the ward’s

adult children, if any; and (3) the court-appointed representative, if any, or upon the ward’s

own legal counsel if reflected in the court’s order establishing that a representative is not necessary because of existing legal counsel (Iowa Code §633.576).

c. If the proposed ward is a minor, notice to the following:

(1) the ward (Iowa Rule of Civ. P. 1.305(2)); (2) if the court determines the ward is entitled to representation,

then to said representative; (3) if no representative is appointed and if Iowa Rule of Civ. P.

1.305(2) is applicable, then to the guardian ad litem appointed by the court for the minor ward; and

(4) to the parents of the minor ward unless their consent is on file.

2. Manner Notice is Served

a. The manner of service of notice is that of original notice unless otherwise ordered by the court, in which event the notice must comply with said order. Service of notice on required recipient other than the ward is by mailed notice (Iowa Code §633.568 and §633.40(5)).

b. Either included in the notice of the petition to appoint conservator or by separate notice, serve upon the proposed ward notice in compliance with Iowa Code §633.576 advising the proposed ward of the conservatorship’s powers and the ward’s rights to representation. C. Orders of the court abstracted briefly:

1. An order indicating whether the court has appointed a representative for the proposed ward plus compliance with the notice requirements, if any, established by the court for a hearing to determine representation and findings of fact regarding notice of right to representation and to be present at said hearing. (Iowa Code §633.575).

2. An order appointing a guardian ad litem on behalf of the ward where the court has determined that no representatives shall be appointed for the proposed ward who is a minor or adult named in an involuntary proceeding.

3. An order by the court appointing the conservator. D. Letters of Appointment issued by the Clerk of Court under the seal of

the court. E. The report of the attorney representing the ward reflecting compliance with the requirements of Iowa Code §633.575, (4) and (5), if applicable. II. Procedures to Support Sale of Real Property A. The procedure to support a court officer’s deed by the appointed conservator follows the procedures required for the executor or administrator to sell real property in an intestate estate or where the Last Will and Testament does not contain a power of sale (Iowa Code §633.652). B. Notice to interested parties of the hearing on the petition for sale of

real property includes the ward and such other parties as the court may determine to be interested parties.

COMMENTS

A. For sale by a foreign conservator, see Iowa Code §633.603 et seq. B. For sale by a temporary conservator, see Iowa Code §633.573. Note that the appointment of the temporary conservator is subject to “such conditions” as the court shall prescribe”. These conditions may restrict the power of the temporary conservator to sell real property. The abstract should reflect such conditions. C. For conservatorship for absentees, see Iowa Code §633.580 et seq. D. Caveat. This title standard is based upon the provisions of the 2002 Iowa Code which became effective on July 1, 2002. The conservatorship proceedings

involving the sale of the ward’s real property should comply with the conservatorship’s opening procedures, including the recipients of notice, manner of service of notice and if reflected in the applicable code provisions existing at that time which provided different recipients of notice in the conservatorship’s opening procedures and excluded the present provisions for the appointment of a representative of the ward. Note prior amendments occurred in 1985 and 2000. E. The conservatorship proceedings should be shown briefly by the abstractor where no sale of real property is undertaken by the conservatorship and the ward subsequently attempts to convey real property. The conservatorship removes the ward’s ability to sell real property and will place the title examiner on inquiry notice that an attempted sale by the ward is ineffectual. (Iowa Code §633.637 and §633.639). F. Caveat. Special attention should be given to the role of a representative for the ward and a guardian ad litem appointed for the ward. Iowa R. Civ. P. 1.211 requires in involuntary conservatorship proceedings that a guardian ad litem be appointed to represent the proposed ward. See the caveat and Title Standard 6.4. The court in compliance with Iowa Code §633.575 requires the appointment of a representative for an adult ward in an involuntary conservatorship proceeding. Under the same code section, the court may appoint a representative for an adult under a Standby Petition or a proposed minor ward.

Service of notice of the hearing on the Petition may be on the proposed ward pursuant to Iowa Rules of Civ. P. 1.305 and 1.306 or on the attorney appointed to represent the proposed ward if Iowa Code §633.568(2)(a) is applicable or if no representative is appointed then on the guardian ad litem if Iowa R. Civ. P. 1.305(2) or 1.305(3) are applicable. This standard makes no comment as to whether or not the same person can be appointed by the court to serve as a guardian ad litem and the representative of the ward. G. Title Standard 9.6 (citing Iowa Code §633.93) provides for a five-year statute of limitation from the date of recording a fiduciary deed. H. Iowa Code §633.572 allows the court to appoint a limited conservatorship and to determine what powers the ward retains to deal with his or her own property. Theoretically this could reserve to the ward the right to convey his or her own property without participation by the conservator. Therefore, if a limited conservatorship is involved, the records should reflect whether or not the order pertains to real property and if so, the precise terms thereof.

8. Application for SNT.

FACTS: I have a request to petition the court to establish a SNT (first party) for a young man who has no parents, grandparents, or guardian. QUESTION: Would anyone care to share a copy of your redacted application to the court? RESPONSE(S): To address the statutory requirement that the first party trust be created by a parent, grandparent, guardian or court, we have petitioned the court to establish a conservatorship for the limited purpose of creating the SNT. If you have a trustee lined up, the trustee will typically serve as the conservator for the purpose of opening the conservatorship and seeking authority to establish the trust. * * * * In the conservatorship proceeding, is the conservator asking the Court to establish the Special Needs Trust, or asking the Court for permission for the conservator to establish the Special Needs Trust? I assume it must be the former because I don’t think the conservator will be considered the legal guardian of the individual for purposes of 42 USC 1396p(d)(4)(a). * * * * You have raised a good point. I believe that we satisfy 42 USC 1396p(d)(4)(a) two ways. In some states the term guardian includes authority to act over property. Because in Iowa, we have the distinction between guardian of person and conservator of property, I have sometimes asked to appoint a both guardian and conservator to address the specific language of 42 USC 1396p(d)(4)(a). Alternately, because the court is authorizing the action of the fiduciary, I believe that use of conservatorship satisfies the requirement that a “court” create the trust. In any event, we give notice to the DHS, and seek a court order approving the action. * * * * Is the trust created by the court subject to on-going court supervision which would require filing annual reports with the court?

9. Conservatorship/Conveyance.

FACTS: Wife has Alzheimer’s. House in Iowa is titled in her name only; she lives in Texas. Husband is not on the title. He lives with her in Texas. Conservatorship is set up in Iowa for the purpose of transferring the property to a third party. Petition and other filings clearly show that husband is the petitioner in the involuntary conservatorship, and he is duly appointed. Court order allowing sale of property is obtained, and husband, in his capacity as conservator, signs the court officer deed. He does not sign the deed as spouse, though. QUESTION: Is it necessary for husband to have signed a deed (either the Court Officer Deed or a separate deed) to the purchaser as grantor/wife’s spouse under these facts? RESPONSE(S): I would propose that he needed to sign in his individual capacity and as that of conservator. He could sign twice, or once as long as the granting clause, signature block, and notary showed that he was specifically signing in the dual capacities. * * * * I would say yes, to release spousal rights.

10. Squatters.

FACTS: Property under a Conservatorship/Guardianship was to be sold under contract. The buyer did not satisfy the contract and is currently under no lease or month to month. A 30 day notice was given. QUESTION: Is the case an equity case and can I file a Writ of Removal? RESPONSE(S): It depends on if this is agricultural or residential property AND there was a clause in the sales contract allowing forfeiture. Assuming it was residential property, if the 30-day notice you are referring to was the Notice of Forfeiture, then you need to record it with an Affidavit to complete the forfeiture, then go through the FED process as if they are a tenant who has held over. Serve a 3-day notice to quit (one of the few occasions when this is allowed in a residential context), then file your FED, etc. * * * * If residential and the contract purchaser just walks away and hands over the keys would you still serve the notice of forfeiture and file the affidavit? Would that clear the title? * * * * See Bassman v. Aaron 13-1349, you need to take to District Court on a 3 day notice. Usually in the contract there is a lease provision. * * * * There is no contract. Just a verbal agreement, do I still need to file a 3 day notice with the court? Then can I file the Writ? * * * * I think that without a written agreement it falls under the statute of frauds and is unenforceable. However I don’t think I would want to get to that argument. What did the 30 day notice say was it a forfeiture notice? * * * * A Notice of Termination of Tenancy and Demand for Possession was served along with Notice of Forfeiture of Real Estate Contract.

11. Power of Attorney vs. Conservator.

FACTS: I am looking at an abstract showing appointment of conservator in 2009 and conveyance of real estate by attorney in fact in 2011. QUESTION: Does an order appointing a conservator automatically revoke a previously executed power of attorney? RESPONSE(S): I believe the conservator has the power to revoke the Power of Attorney, but the Power of Attorney is not automatically revoked. However, any conveyance made after filing the petition is presumed to be a fraud unless approved by the Court. Was there court approval? * * * * Is there authority that the conveyance is presumed fraudulent? There was no court approval in this case.

12. Power of Conservator.

FACTS: The owner of real estate dies. One of the decedent’s children has Down syndrome and a conservator has been appointed for her. The executor of the owner’s estate has filed a petition to sell the real estate. Iowa Code Section 633.646 points out the powers of a conservator without court approval but I wonder if the power to consent to a sale requires Court approval. QUESTION: May conservator consent to the sale without approval of the Court in the pending conservatorship? RESPONSE(S): I believe the Conservator has no authority to consent and must ask the Court to protect the ward’s rights. Standard Answer to the petition to sell. Formality, but required.

13. Sale of Iowa Real Estate by Foreign Conservatorship.

FACTS: Iowa real property is owned by multiple parties, including an individual residing in Minnesota for whom a conservatorship proceeding is open in Minnesota. Conservator has the power (pursuant to Minnesota conservatorship order) to approve any contract which the ward may want to make. The same order provides that the conservator does not have the power to exchange or sell an undivided interest in real property. Title Standard 9.17 appears to address this issue, including referencing Iowa Code Section 633.603, which requires the opening of a conservatorship proceeding in Iowa. Iowa Code Section 633.652 further provides that conservators must follow the same procedure as personal representatives of an estate to sell real property. Thus, to convey clean title, must a conservatorship be opened in Iowa accompanied by a petition to sell the property? A response from the Probate Section stated that all that should be needed is to register the Minnesota conservatorship in Iowa pursuant to the “Iowa Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act,” Iowa Code Section 633.700 et seq. QUESTION: If the land is to be sold by the owners, including the ward, what steps must be taken to convey clean title? Do you agree with the above course of action notwithstanding the possibly outdated reference in the Title Standard 9.17? RESPONSE(S): I do probate and real estate work in both Iowa and Minnesota. I haven’t confronted exactly this issue before, but you have a Minnesota ward and a Minnesota conservator. Your Minnesota conservator lacks only the authority to sell the real property and recognition of that authority in Iowa. Your simplest course is probably to get a court order from the Minnesota court that approves the existing conservator’s sale of the ward’s Iowa real property; then get the existing conservator authorized to act as conservator in Iowa pursuant to Iowa Code 633.603. You can create a thorough paper trail of notices and orders from the Minnesota conservatorship proceedings that is equivalent to what Iowa Title Standard 9.17 suggests and tack on the Iowa court’s order permitting the foreign conservator to act in Iowa. Starting a completely new conservatorship proceeding in Iowa seems unnecessarily complex, based on facts you’ve shared.

14. Septic “Refresher” - Oxymoron?

FACTS: Septic Inspection: Exemption: #3 “A transfer by a fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or a trust.” If the grantor is deceased and the trust is being administered to avoid probate, I understand that exemption. But a simple revocable trust? QUESTION: Is a Revocable Trust exempt? Why would people not “always” try to avoid the septic inspection requirement by transferring property into a revocable trust right before selling their properties? RESPONSE(S): Even if the transfer is exempt from the septic inspection requirement under the time of transfer septic system inspection law, buyers are free to demand the inspection and subsequent remedial actions as a condition of purchase. Therefore, transferring the property to a trust might not avoid the need for an inspection. * * * * I think the real question is whether transfer into a trust is exempt. * * * * Here's the section from my outline dealing with the issue.

E. THIRD EXCEPTION: 455B.172(11)(a)(3) A transfer by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust.

1. Query: does the use of the term “administration” mean that a transfer by a fiduciary of a non-court qualified testamentary trust or a inter-vivos trust is not excepted? See below for a different reading of this exception.

2. We thought it was not excepted, which is why we pushed for the additional “under $500” exception.

3. Was this exception supposed to cover only transfers to beneficiaries?

4. I understand the general concept of importing the residential property disclosure section into the septic system provision and I understand why one would not want to make fiduciaries, most of whom have probably never lived in the property being transferred, give residential disclosure statements. But I’m not sure I can see why the estate, trust, conservatorship, should be exempted from

having a septic inspection report IF the estate, trust, conservatorship is selling the property.

5. It would make more sense to me to divide fiduciary transfers into two categories:

a. Those to beneficiaries in settlement of the estate, trust, conservatorship (which would be excepted), and

b. Those to third parties where the estate, trust, conservatorship is selling the property (which would not be).

6. As it is we have a rather convoluted system where

a. a transfer to a beneficiary of an estate or trust which is either (i) pursuant to a court order or (ii) in the course of administration is exempt

b. but a transfer to that same beneficiary from a revocable trust after the death of the grantor would not be, absent the “under $500” exemption.

c. and a transfer to a purchaser of the property that is (i) pursuant to a court order or (ii) in the course of administration is also exempt,

d. but a transfer to a purchaser of the property from a revocable trust after the death of the grantor is not.

7. A tantalizing alternative reading of this exception is to parse it as follows:

A transfer by a fiduciary in the course of the administration of

1. a decedent's estate,

2. a guardianship,

3. a conservatorship, or

4. a trust.

And, to read the term “administration” as a general term, not a term of art, meaning “the process or activity of running a business, organization,” (Oxford English Dictionary).

8. Then one could argue that any transfer from any trust, including a transfer from a revocable, grantor trust of the kind we use all the time for estate planning, would be exempt.

9. An apparently strong argument for the first part of the parsing would be that one does not usually refer to a “decedent’s guardianship” or a “decedent’s conservatorship.”

10. Our Story County Recorder takes the position that a deed from a revocable trust is exempt, period.

* * * * Are we still operating under the rule that ANY transfer from an estate is not subject to septic inspection? I have an estate selling to a third party (non-beneficiary) and want to make sure estate has no septic requirements.

15. Conflict with Purchaser also Being Guardian/Conservator?

FACTS: Beneficiary of Estate, also being Administrator of Estate, contracts to buy real property from the Estate. Beneficiary/Administrator provides report and notice to all persons entitled thereto asking for approval of the sale. One of the persons to whom such report and notice is provided is the same Beneficiary/ Administrator – acting in his other capacities as Guardian/Conservator for his sister who is also a beneficiary. No objections are filed. QUESTION: Is there a title issue on the inherent conflict between the potential purchaser and his role as the Guardian/Conservator? RESPONSE(S): I believe that an order in the conservatorship proceeding is also required and appointment of guardian ad litem to represent the ward. See also Iowa Code Section 633.647. 633.155. Self-dealing by fiduciary prohibited No fiduciary shall in any manner engage in self-dealing, except on order of court after notice to all interested persons, and shall derive no profit other than the fiduciary's distributive share in the estate from the sale or liquidation of any property belonging to the estate. Every application of a fiduciary seeking an order under the provisions of this section shall specify in detail the reasons for such application and the facts justifying the requested order. The notice shall have a copy of the application attached, or, if published, it shall contain a detailed statement of the reasons and facts justifying the requested order.

16. Daughter/Guest in House.

FACTS: Elderly mother has permitted her adult daughter to live with her for many years. The mother is now no longer able to manage the situation. The daughter is mentally and physically abusive and is a substance abuser. There is no written lease or rent being paid by the daughter. The daughter is refusing to leave the house, which is solely owned by the mother. QUESTION: What is the most efficient means for ejecting the daughter from the house in this fact situation? RESPONSE(S): If the situation is dire, you may get to a judge faster than 30 days – and perhaps more importantly, get the immediate attention of the unwelcome occupant. 235B.19 EMERGENCY ORDER FOR PROTECTIVE SERVICES. 1. If the department determines that a dependent adult is suffering from dependent adult abuse which presents an immediate danger to the health or safety of the dependent adult or which results in irreparable harm to the physical or financial resources or property of the dependent adult, and that the dependent adult lacks capacity to consent to receive protective services and that no consent can be obtained, the department may petition the court with probate jurisdiction in the county in which the dependent adult resides for an emergency order authorizing protective services. 2. The petition shall be verified and shall include all of the following: a. The name, date of birth, and address of the dependent adult who needs protective services. b. The nature of the dependent adult abuse. c. The services required. 3. Upon finding that there is probable cause to believe that the dependent adult abuse presents an immediate threat to the health or safety of the dependent adult or which results in irreparable harm to the physical or financial resources or property of the dependent adult, and that the dependent adult lacks capacity to consent to the receipt of services, the court may do any of the following: a. Order removal of the dependent adult to safer surroundings. b. Order the provision of medical services. c. Order the provision of other available services necessary to remove conditions creating the danger to health or safety, including the services of peace officers or emergency services personnel and the suspension of the powers granted to a guardian or conservator and the subsequent appointment of a new temporary guardian or new temporary conservator pursuant to subsection 4 pending a decision by the court on whether the powers of the initial

guardian or conservator should be reinstated or whether the initial guardian or conservator should be removed. 4. a. Notwithstanding sections 633.552 and 633.573, upon a finding that there is probable cause to believe that the dependent adult abuse presents an immediate danger to the health or safety of the dependent adult or is producing irreparable harm to the physical or financial resources or property of the dependent adult, and that the dependent adult lacks capacity to consent to the receipt of services, the court may order the appointment of a temporary guardian or temporary conservator without notice to the dependent adult or the dependent adult's attorney if all of the following conditions are met: (1) It clearly appears from specific facts shown by affidavit or by the verified petition that a dependent adult's decision-making capacity is so impaired that the dependent adult is unable to care for the dependent adult's personal safety or to attend to or provide for the dependent adult's basic necessities or that immediate and irreparable injury, loss, or damage will result to the physical or financial resources or property of the dependent adult before the dependent adult or the dependent adult's attorney can be heard in opposition. (2) The department certifies to the court in writing any efforts the department has made to give the notice or the reasons supporting the claim that notice should not be required. (3) The department files with the court a request for a hearing on the petition for the appointment of a temporary guardian or temporary conservator. (4) The department certifies that the notice of the petition, order, and all filed reports and affidavits will be sent to the dependent adult by personal service within the time period the court directs but not more than seventy-two hours after entry of the order of appointment. b. An order of appointment of a temporary guardian or temporary conservator entered by the court under paragraph "a" shall expire as prescribed by the court but within a period of not more than thirty days unless extended by the court for good cause. c. A hearing on the petition for the appointment of a temporary guardian or temporary conservator shall be held within the time specified in paragraph "b". If the department does not proceed with a hearing on the petition, the court, on the motion of any party or on its own motion, may dismiss the petition. 5. The emergency order expires at the end of seventy-two hours from the time of the order unless the seventy-two-hour period ends on a Saturday, Sunday, or legal holiday in which event the order is automatically extended to four p.m. on the first succeeding business day. An order may be renewed for not more than fourteen additional days. A renewal order that ends on a Saturday, Sunday, or legal holiday is automatically extended to four p.m. on the first

succeeding business day. The court may modify or terminate the emergency order on the petition of the department, the dependent adult, or any person interested in the dependent adult's welfare. 6. If the department cannot obtain an emergency order under this section due to inaccessibility of the court, the department may contact law enforcement to remove the dependent adult to safer surroundings, authorize the provision of medical treatment, and order the provision of or provide other available services necessary to remove conditions creating the immediate danger to the health or safety of the dependent adult or which are producing irreparable harm to the physical or financial resources or property of the dependent adult. The department shall obtain an emergency order under this section not later than four p.m. on the first succeeding business day after the date on which protective or other services are provided. If the department does not obtain an emergency order within the prescribed time period, the department shall cease providing protective services and, if necessary, make arrangements for the immediate return of the person to the place from which the person was removed, to the person's place of residence in the state, or to another suitable place. A person, agency, or institution acting in good faith in removing a dependent adult or in providing services under this subsection, and an employer of or person under the direction of such a person, agency, or institution, shall have immunity from any liability, civil or criminal, that might otherwise be incurred or imposed as the result of the removal or provision of services. 7. Upon a finding of probable cause to believe that dependent adult abuse has occurred and is either ongoing or is likely to reoccur, the court may also enter orders as may be appropriate to third persons enjoining them from specific conduct. The orders may include temporary restraining orders which impose criminal sanctions if violated. The court may enjoin third persons from any of the following: a. Removing the dependent adult from the care or custody of another. b. Committing dependent adult abuse on the dependent adult. c. Living at the dependent adult's residence. d. Contacting the dependent adult in person or by telephone. e. Selling, removing, or otherwise disposing of the dependent adult's personal property. f. Withdrawing funds from any bank, savings and loan association, credit union, or other financial institution, or from a stock account in which the dependent adult has an interest. g. Negotiating any instruments payable to the dependent adult. h. Selling, mortgaging, or otherwise encumbering any interest that the dependent adult has in real property.

i. Exercising any powers on behalf of the dependent adult through representatives of the department, any court-appointed guardian or guardian ad litem, or any official acting on the dependent adult's behalf. j. Engaging in any other specified act which, based upon the facts alleged, would constitute harm or a threat of imminent harm to the dependent adult or would cause damage to or the loss of the dependent adult's property. 8. This section shall not be construed and is not intended as and shall not imply a grant of entitlement for services to persons who are not otherwise eligible for the services or for utilization of services which do not currently exist or are not otherwise available. * * * * I recently dealt with a similar issue involving a live-in boyfriend for my client who owned her own home. I followed basically the same process as outlined above. I had hoped to find a method around the 30 day notice but it didn't seem possible under the landlord-tenant law. The Sheriff's office did commit to removing him from the home before the process was completed if the situation turned abusive. * * * * I agree with using Iowa Code Chapter 235B. The described situation appears to be exactly the need this statute was passed to address. It’s new so you should have a full explanation if challenged or if the court is looking for some guidance. I don’t know that there has been extensive use of it so far.

17. How to Remove a Holdover From a Forfeiture?

FACTS: I have a very complicated conservatorship with a lot of very low dollar property. I filed a forfeiture of contract on August 29, 2014. However, the contract holder never moved out. We just sort of ignored this while we looked for buyers. It is not in a very good area of town. A vacant house is quite vulnerable to vandalism in this neighborhood. Anyway, now we have a plan for this house and want him out. QUESTION: Do I have to do a 30 day notice to terminate the lease or can I go straight to eviction? Time is now of the essence.

RESPONSE(S): Problem with peaceable possession. Iowa Code Section 648.18. See Petty v. Faith Bible Christian Outreach Center, Inc., 584 N.W.2d 303 (Iowa1998) and Warren v. Yocum, 223 N.W.2d 258, 263 (Iowa 1974). * * * * Iowa Code Section 648.18 encourages landlords to start evictions as soon as a tenant is one-day late with rent. You may be able to argue each day held-over accrues an additional cause of action, but probably best to give the 30-day here, followed then by the 3-day

* * * * As you note, this is another problem situation where the peaceable possession statute frustrates a landlord from removing a tenant who has violated his contract to pay rent. Leases are simple contracts. One party agrees to provide a home to the other, and the other party agrees to pay an agreed amount of rent as consideration. Does not the peaceable possession statute grant unfair protection to the party who has broken the contract, to the detriment of the party who has honored the contract? You have a very real problem. Do you believe you have an effective legal course of action, or are you just stuck with the peaceable possession law? Is it time for legislation to repeal the peaceable possession statute, or at least amend it in a manner that is not so prejudicial to the rights of landlords? * * * * The 2014 Court of Appeals decision, Bassman v. Aaron (July 30, 2014 No. 13-1349) speaks of a three day notice to the forfeited contract buyer if the contract has the magic language establishing a landlord tenant relationship following forfeiture. Must the Contract Seller serve the Three Day Notice immediately after the contract is forfeited? Wouldn't the cause of action for eviction (FED) accrue when the owner serves the Three Day Notice? In other words, could you argue that the thirty day peaceable possession period does not begin until the expiration of the three day notice to quit?

18. Power of Attorney Triumphed by Living Trust?

FACTS: Woman owns Blackacre.

Woman executes a “Farm Management” Power of Attorney in 2002 giving Nephew the authority to convey interest in property, and lease and manage Blackacre. Power of Attorney indicates it shall not expire. Woman executes Living Trust in 2005 and conveys Blackacre into Living Trust. Terms of the trust grant Woman as Trustee the authority to sell, manage, lease, convey, etc Blackacre. Living Trust by its terms does not explicitly revoke Power of Attorney. Terms of Living Trust indicate Woman is Trustee until her death when her two children become Successor Co-Trustees. No Financial Power of Attorney was ever executed. No new “Farm Management” Power of Attorney is ever executed after Living Trust is signed. Nephew manages Blackacre from 2002 until present. Woman is now almost 100. Nephew requests an Real Estate Contract be drafted with him as signing as Power of Attorney for Woman. Woman’s testamentary capacity is questionable to sign Real Estate Contract herself or to sign Financial Power of Attorney or a new “Farm Management Power of Attorney”.

QUESTION: Does the 2005 Living Trust automatically trump 2002 Farm Management Power of Attorney? If woman does not have contractual or testamentary capacity, must a conservatorship be filed? Do actions of the parties of letting Nephew manage farm between 2002 and present impact who has authority to sign Real Estate Contract? RESPONSE(S): Does the Living Trust appoint successor trustee(s) in the event of incapacity of Woman? If so, what are powers of successor trustees in the event of incapacity? * * * * No the Living Trust does not make provision for Successor Trustee if woman is incapacitated. Successor Trustee takes over only upon her death. * * * * I agree. You could file an application in probate court asking the court to take jurisdiction of the trust under the Uniform Act. This should be simpler than using a conservatorship.

19. Power of Foreign Conservatorship.

FACTS: I have an out-of-state conservator who contacted me. The Ward now resides in Nebraska in some sort of assisted living. He is a former resident of Iowa and owns farmland in Iowa. There is a Nebraska conservatorship established which appoints an Iowa resident (ward’s son) as Nebraska Conservator. The attorney in Nebraska obtained an order of the Nebraska court authorizing the conservator to establish a revocable trust and to convey the ward’s Iowa real estate to the trustee who is also the son. The out of state attorney told her client, the Iowa resident Nebraska conservator, to have an Iowa attorney prepare a deed for signature by the Nebraska conservator to convey the farm to the trust. QUESTION: How would you go about conveying the real estate? RESPONSE(S): It has always been my understanding that the situs of the Real Estate governs. Accordingly, I believe you need an ancillary, conservator, here in Iowa. However, I have seen more than one case around here, being in a border county with Minnesota, where there has been the formality of the opening of an Iowa proceeding so as to allow for claims, etc., if any, but to then have the Iowa court actually defer and transfer jurisdiction of any actions taken on behalf of the ward to the MN action. Thus, there is an open Iowa shell proceeding, but the actual actions of the ward are deferred to the conservator, in the ward’s state of residence. Saves money and duplicity of approval.

20. Time of Transfer.

FACTS: I had a realtor suggest that a party open a revocable trust and place real estate in the trust to avoid time of transfer under Iowa Code Section 455B.17211)(a)(3). Client is wondering if that is possible? The trust would sell the property for more than $500.00. QUESTION: Is that considered "administration" of trust to come under the time of transfer exception? RESPONSE(S): I would say no. Exemption three identifies that the exception goes to a fiduciary in the course of administering a decedent's estate, guardianship, conservatorship, or trust. Thus, if this is a revocable trust and the settler is alive, in my opinion, the exemption does not apply since the trust does not belong to a decedent. * * * * That was my belief also. * * * * There wouldn’t be a decedent in a guardianship or conservatorship, by definition, nor in the case of a Trust where the grantor is alive. It is my understanding that a transfer out of a revocable trust is an exempt time of transfer transaction.

21. Power of Attorney v. Conservator.

FACTS: I am looking at an abstract showing appointment of conservator in 2009 and conveyance of real estate by attorney-in-fact in 2011. QUESTION: Does an order appointing a conservator automatically revoke a previously executed power of attorney? RESPONSE(S): I believe the conservator has the power to revoke the Power of Attorney, but the Power of Attorney is not automatically revoked. However, any conveyance made after filing the petition is presumed to be a fraud unless approved by the Court. Was there court approval? * * * * Is there authority that the conveyance is presumed fraudulent? There was no court approval in this case. * * * * My opinion, Power of Attorney had very limited if any, authority after Conservator appointed. Opine, only Conservator could transfer title to any real estate; further submit Conservator needs Court authority to transfer same. Review Iowa Code Section 622.636 et seq. * * * * Iowa Code Section 633.636 et seq. * * * * The Iowa Uniform Power of Attorney Act and Iowa Code Section 110 may provide some guidance http://iatrust.files.wordpress.com/2013/10/handout2.pdf http://www.uniformlaws.org/shared/docs/power%20of%20attorney/upoaa_final_ nov06.pdf It looks like it may be in front of the legislature this session (2014). I do not know that status.

22. Recording of Power of Attorney.

FACTS: I have always operated under the rule that any conveyance or grant of interest in land (including execution of mortgage) under a Power of Attorney, requires that said Power of Attorney be recorded. I have encountered some resistance to this stance for execution of a mortgage, where spouse signed as Power of Attorney for other spouse. QUESTION: Am I incorrect to require recording of the Power of Attorney? RESPONSE(S): I’m with you. Not of record means of no use to the next title examiner! * * * * I’ve actually had more resistance from the non-title holder spouse complaining, “Why the heck do I need to sign the (deed/mortgage), I’m not on title. And I’m

not going to sign it.” Then I have to explain Iowa law, and why they do need to sign. And they are grumbling all the while they are signing, and thinking I am the source of all their problems of the day. * * * * And probably also need to record the new certification form, Iowa Code Section 633B.302. * * * * Tagging into this subject, how would you recommend handling a situation where a Buyer lives overseas (active duty military), wants to purchase a house when he is on leave in June, but will have to close on the house while he is overseas (since his leave time will not be long enough to close on the transaction). He would like to handle this transaction with the use of a Power of Attorney, but his only family and connection in town is a mother who has dementia. Is it unusual to engage an attorney to act as a Power of Attorney in these situations? * * * * Anyone, even an attorney at law, can serve as an attorney in fact, when properly vested by a written Power of Attorney. When your soldier comes home on leave he can execute a Power of Attorney in favor of any person he trusts. Or, before he comes home the soldier's Judge Advocate Office can draw up a Power Of Attorney at the soldier's instruction. Military notarizations are by statute acceptable in all States. See 10 U.S.C. section 1044A. Yes, the Power of Attorney obviously should be recorded.

A fellow soldier and friend of mine in the Iowa National Guard went off to Desert Storm 25 years ago; he asked me to serve as his local Power of Attorney Power of Attorney. So yes, I can say that it happens. Doing Legal Assistance duty as a Judge Advocate, during my overseas tours, I and my enlisted men executed dozens of Powers of Attorney for soldiers, sailors and marines. Power of Attorney drafting is a very common service that servicemen require. Sometimes they have to give thought to identifying who they trust. * * * * Also, if the original Power of Attorney is lost, can a copy of the Power of Attorney be recorded together with an agent certification under Iowa Code Section 633B.302? * * * * Yes, most recorders will take a copy with a certification/affidavit of the copy being a true copy.

23. Lost Power of Attorney.

FACTS: General Power of Attorney executed in 1999; original appears to be lost. Former Iowa Code Section 633B.2(2) appeared to allow the recording of an affidavit by a person with knowledge of the Power of Attorney’s existence and

non-rescission with attached copy of Power of Attorney. QUESTION: Is there an analog statute to Iowa Code Section 633B.2(2) to which I can refer in the affidavit? RESPONSE(S): Title Standard 1.1? * * * * See if Iowa Code Section 633B.106 helps.

24. Missing Power of Attorney.

FACTS: Abstract shows a Quit Claim Deed signed by an agent under a Power of Attorney that was never recorded. Deed was signed in 2003 and recorded in early 2005. If it matters, the Quit Claim Deed was from the successful bidder (the foreclosing bank) at a foreclosure sale to another bank. Several deeds recorded since then with no further defects. QUESTION: Would a 614.17A affidavit clean this up? And if so, would it merely recite that the purported conveyance in 2005 is now more than ten years old, my client is in possession of the property, and that my client is the fee simple owner of the property? Or, is there some alternative device that is necessary or some bigger issue I’m

missing here? RESPONSE(S): Depending on the banks involved, I've often had success simply searching for a recorded Power of Attorney through iowalandrecords.org or the County Recorder's website, if available. If I find a previously executed Power of Attorney that's been recorded, I then create an Affidavit Explanatory of Title stating that "my attention has been called to the following Power of Attorney previously recorded", attach the Power of Attorney as an exhibit, and proceed from there. * * * * No Power of Attorney is recorded in the County I need (Scott Co). Grantor of the Power of Attorney was Provident Bank and agent was Litton Loan Servicing. Litton Loan Servicing appears to be a regularly used agent by many different banks, but no Power of Attorney between my two banks.

* * * * Assuming that foreclosing bank is unavailable to give another Quit Claim Deed, (You may at least try to get a Bank representative to affirm the Bank's disinterest.) file your 614.17A affidavit. Also add some additional language to also qualify it as an Affidavit Explanatory of Title under Iowa Code Section 558.8. Recite that: 1) the Bank granted a valid Power of Attorney naming its Agent X to convey property. 2) this Power of Attorney was in force as of the date that Agent X signed the Quit Claim Deed of conveyance. 3) the Power of Attorney document was lost before it could be filed of record, but certainly did exist. 4) the Bank and Agent X both intended the act of Agent X to convey all of Bank's right, title and interest in the property. 5) the Bank claims no legal nor equitable interest in the property.

25. Power of Attorney.

FACTS: 1. Deed to Blackacre to Grandson, Grandson’s wife, and Grandma as joint tenants with full rights of survivorship. 2. Attorney in fact for Grandma quit claim deeds Grandma’s interest to Grandson and Grandson’s wife. 3. Power of Attorney is not recorded. However, there is an affidavit filed with a copy of the Power of Attorney attached which states that it is an exact copy of the original and that the original cannot be found. 4. Affidavit also states that the Power of Attorney has not been revoked. Power of Attorney gives authority to convey real estate. The real estate is not the homestead of Grandma. The new Uniform Power of Attorney statute says that a copy has the same effect as an original, but it does not go into effect until July 1, 2014. QUESTION: Would you raise an objection based on the fact that the original Power of Attorney was not recorded? RESPONSE(S): If three years have passed since the affidavit was recorded, I would think you could rely on Iowa Code Section 558.8. The facts set forth in the affidavit become conclusive after it has been recorded for three years, and I would argue that includes the facts set forth in the copy of the Power of Attorney attached to the affidavit. If three years have not passed since the affidavit was recorded, then you merely have a presumption that the facts set forth therein are true. Even then, I’d rely on Title Standard 1.1 and pass title. * * * * Contrary to the other responses, I think it is neither a questionable practice nor a question of applying Title Standard 1.1. The current statute specifically authorizes this procedure. See Iowa Code Section 633B.1(2). The affidavit is recordable and conclusive proof of nonrevocation. Of course, you should accept it. The new act can provide no guidance at all.

26. Signing in a Representative Capacity.

FACTS: We recently encountered a situation where buyer’s attorney rejected a deed signature. It was typed under the signature line “ Lawrence Smith by Craig

Jones, as attorney in fact.” The seller signed in cursive “ Lawrence Smith by

Craig Jones, attorney in fact.” The buyer’s attorney said that the deed set up

was correct but that that form of signature was unacceptable. He said an attorney in fact must sign just his name, not the name of the principal, just like a corporate officer signs only his or her name, not the name of the company. I am always ready to learn, but this seems form over substance to me because the attorney in fact did sign his name indicating he was not signing in his personal capacity but in his attorney in fact capacity. (There was no issue with the power of attorney form.) Along that same line, I am president of our abstract company. I always state “president” after my signature to indicate that I am not signing in my personal

capacity but rather in my corporate capacity. I am also a trustee for a family member and for that I sign my name with “trustee”

after my name, again to indicate I am not signing in my personal capacity but rather in my fiduciary capacity. QUESTION: Any thoughts or authorities anyone can cite? RESPONSE(S): I am the examining attorney who raised this objection. It was about both the signature and the acknowledgement. I found the latter peculiar in form. I have attached an image. I found the execution of the deed as whole problematic, and easy to correct before closing. I am always willing to be convinced that I am wrong * * * * The new Iowa State Bar Association Power of Attorney form instructs the agent to sign exactly as was done on the deed. * * * * Do you mean just “Craig Jones” and are you referring to Section 44? Also would you deem the signature unacceptable if it were the longer version as noted in my question? * * * *

I say your seller did it correctly, according to the instructions on the Iowa State Bar Association form. Attached is the new form. See the top of page 5. (The new Power of statute substitutes the term “agent” of “attorney in fact” but that is

beside the point.) * * * * I use the Word version of the Power of Attorney form and delete anything that does not apply.

* * * * So you have two objections. As to the signature, I do not see why it would be objectionable – can you explain why you think it is? For the notarization, there is some excess language I would like to see deleted, but a little white-out tape should take care of that. Does the notarization have any other problem? * * * * I see no problem with the acknowledgment. Although a lesser used form (in my experience), it complies with Iowa Code Section 9D.15. I agree with the other comments on the representative capacity issue. I don’t see

a basis for the objection. * * * * I see nothing wrong with how the signature was handled. I always use “(Principal’s Name), by (Agent)”. When signing under a Power of Attorney myself, I print the principal’s name, “By (my normal signature)”. The acknowledgment may not be in exactly the same form as set out in Iowa Code Section 9B.16(2), but I would not have objected to it. It may be true that this is “easy to correct before closing”, and I am sure we have all cured title objections we do not agree with, just to avoid hassle and delays. * * * * Think arguing form over substance. Do though have a question re: new Power of Attorney form. What are you doing when person granting power doesn’t

initial (for this discussion) any lines Grant of Specific Authority (Optional) provision. Assume after execution, person granting power becomes demented; Agent granted the power proceeds act on persons behalf; what’s to

stop Agent from forging initials on line so they can “Amend, revoke or terminate

the trust?” Question is how handling numerous blanks which may remain

unmarked subsequent to execution, which then could be “initialed or filled in by

the Agent at a later date? We are putting N\A or in “SPECIAL INSTRUCTIONS,

etc. -- None Applicable. Any thoughts. * * * *

Excellent question. I wondered about this, as well. What about putting YES and initial on those blanks and NO in every other blank? Or what about asking the client each of the options and deleting the options that the client has said no to before the form is printed and signed? BETTER OPTION? Can we customize this form or does it have to be this exact form? I would like to address access and rights over social media, online profiles, web sites, and access to online banking or investments in forms I have my clients sign. I can put this under the special circumstances part, but I would just like to create my own section for that. Also, I would like to have a section clarifying charitable donations and gifts, separately from the overall gifts section, which I interpret to cover the instance of gift to people, rather than charities, although I suppose it covers both. But when I ask my clients if the gift giving power they have just conveyed also covers gifts to charities, they usually say no, they did not think of that.

* * * * Can we customize the form? First, form is statutory; second, I don’t think we can customize the Iowa Docs form. Although, like and appreciate the use of a “Word” form, be fearful someone does not honor the document because it is “not”

the statutory from. * * * * The form was only created by a committee. It was not created by the statute, but the form refers to the new statute. * * * * I respectfully disagree. Iowa Code Section 633B.301 ( SF 2168 Sec 43) Captioned Power of Attorney -- Form states: “ A document substantially in the

following form may be used to create a statutory power of attorney ….” Following

is the form which has become the Iowa Docs form. I appreciate the statute states “substantially”; question though is what substantially means. I would not want to be placed in situation where I “cut up” the form that appears in the statute; had client execute; client now has dementia; agent presents “cutup” form and person, institution, whatever states “we won’t recognize.” Now what do you do? * * * * My practice is literally on the state line between Missouri and Iowa and just few miles from Kansas and Nebraska. My clients in Missouri go to Iowa for healthcare and vice versa. If you follow this line to its logical conclusion -- then my Missouri clients had best execute Iowa Powers of Attorney for fear the Iowa providers won't accept them if not on Iowa forms. But this is not the vase. Powers of Attorney in Missouri are not based on a predetermined form --

each attorney basically has their own version based on current case law and statute. And those forms are readily accepted by Iowa providers (and Nebraska providers and Kansas providers.) Providers are used to seeing a variety of forms. Especially if the provider is a large medical center. I understand that uniformity eliminates the necessity for a provider to look at a Power of Attorney in detail. But there are provisions that I prefer to have in Powers of Attorney that are not in ISBA Form #120. I suppose I could include them in Special Circumstances. I agree with a prior poster that said this is looking at form over substance. * * * * Departing from the Iowa Docs form could create a multitude of problems. We certainly want the Powers of Attorney to be recognized everywhere, so a “creative” edit of the approved form may not be in compliance with the new

statute and thus be ignored. * * * * Certainly you can delete the “optional” sections. * * * * No problem adding an addenda to the present “statutory” form, just seriously

question “cutting up the “statutory” form and removing “items.” * * * * I appreciate your comments. Maybe rather than remove them I will do that line through them thing that you can do. The Hot Docs form does come in a word version.

* * * * Though I don't claim to be an expert on the new Power of Attorney Act, I have spoken with a number of attorneys on how they intend to draft in light of the new Act and the statutory form. I have attorneys tell me that they intend to do all of the following: 1. Use the new statutory form, initialing each line. 2. Use the old Iowa Docs form 120. 3. Use the new form, but delete the lines for initialing in front of each separate area of authority. Essentially just having the client sign once. 4. Use the new form and "N/A" on the lines for initialing as appropriate. 5. Use the old Iowa Docs form 120, but add a line that basically says in addition to these powers, my agent has all of the other powers granted in Iowa Code Sections 633B.204 - 633B.216, inclusive. 6. Draft a completely customized form.

27. Deed Signed under Limited Power of Attorney.

FACTS: August 21, 2013 – Seller deeds real estate to Buyer by Attorney-in-Fact. Buyer gives mortgage to Bank 1. Bank 1 assigns mortgage to Bank 2.

August 23, 2013 – Deed, Mortgage and Assignment are recorded.

September 25, 2013 – Document titled “Limited Power of Attorney – HUD-1 Form” recorded which is dated August 13, 2013. Limited Power of Attorney

states as follows:

“Seller hereby appoints Agent for the limited purpose of completing the sale of (address and legal description). I specifically grant Agent full power and authority to execute in my stead on my behalf the HUD-1 Settlement Statement. The signature of my attorney-in-fact, indicating his/her fiduciary capacity, shall be acceptable as my own and this attorney in fact shall have full power and authority to do and perform any act in connection with the above power which I could do personally.”

The Agent under the Limited Power of Attorney is also the notary who acknowledged the signature of the Seller on the Limited Power of Attorney. I see from Iowa Code Section 9B.4 that the notarial act is voidable, but is not per se void.

QUESTION: 1. Do you believe the language of the Limited Power of Attorney is broad enough to encompass allowing the attorney in fact to execute a deed? Or would you require the Seller to execute a Deed to the Buyer based on the attorney in fact not having authority to execute a deed to the property and/or the possibility of the notarial act being voided?

2. If your answer to Question 1 is that you would require a Deed, would you also require a new mortgage and assignment to be executed, or would you require that the previously executed mortgage and assignment be re-recorded?

RESPONSE(S): Analyzing your questions, I conclude that the HUD-1 Power of Attorney should legally suffice to authorize the Agent's execution of deed of conveyance along with a HUD-1. The Power of Attorney’s third sentence authorizes "any act" by the agent impliedly, and reasonably, necessary and proper to accomplish "the limited purpose of completing the sale" as fixed in the first sentence. May I restate your first question and break it into two: 1) Did the Limited Power of Attorney authorize, in express language, the agent to sign a deed to convey the property? or authorize only execution of a HUD-1 Settlement Statement?

Answer is No, any authority to convey is implied, only. Sole specific grant is the authority to sign HUD-1s. 2) If no express language authorized the conveyance then what act(s) did the grantor actually understand himself to authorize/empower his agent to do? So far as interpretation scope takes us, see Matter of Estate of Crabtree, 550 N.W.2d 168 (Iowa 1996): ““The established rule is that a power of attorney must be strictly construed and the instrument will be held to grant only those powers which are specified.” Bloom v. Weiser, 348 So.2d 651, 653 (Fla.Dist.Ct.App.1977); accord Whitford v. Gaskill, 119 N.C.App. 790, 460 S.E.2d 346, 348 (1995), cert. granted, 342 N.C. 197, 463 S.E.2d 250 (1995); see Abodeely v. Cavras, 221 N.W.2d 494, 501-02 (Iowa 1974) (construing power of attorney as granting only powers specified therein).” The Crabtree rule suggests that bare language of the Power of Attorney will prevent any action that is not expressed in words. However, what the parties intended with their Power of Attorney will also matter. An agent does possess implied powers to carry out his master's desires. State v. Sellers, 258 N.W.2d 292 (Iowa 1977): “[I]n certain situations an attorney in fact may have implied powers... Ordinarily, an agent has implied authority to act for his principal to accomplish the purposes of grants of express authority and may not extend actual authority unreasonably beyond the authority expressly granted. See 3 Am.Jur.2d, Agency, ss 69, 71 at 470-474; 3 Couch on Insurance 2d, s 26:54.” 2 Patton & Palomar on Titles 3d section 418 (2003): “An examiner frequently has to decide the sufficiency of deeds or other conveyances, executed under a power. FN2 Definition: A power is a written authority to do some act in relation to lands, or the creation of estates in land, or of charges on the lands, which the owner granting or reserving such power might be lawfully performed by the owner. Carson v. Cochran, 52 Minn. 67, 72, 53 N.W. 1130 (1892).” 2 Patton & Palomar on Titles 3d section 419 (2003): “The familiar authority given to one person to act for another, known as “power of attorney,” is a form of agency. The agent or attorney in fact acts solely for the principal, and any deed executed under a power of attorney is the deed of the owner. Because of this fact, even in the absence of statute, a power of attorney must contain or provide for, expressly or by clear implication, all the requisites of any conveyance to be executed under the power of attorney.” See also a recent dispute over, inter alia, an agent's actions under a power of attorney. Savannah Bank, N.A. v. Stalliard, 400 S.C. 246, 734 S.E.2d 161 (S.C. 2012). The South Carolina Supreme Court observes:

“Appellant hired Sally Gardocki, an attorney in Hilton Head, and gave her a power of attorney to obtain financing for the Hilton Head Property. On August 23, 2007, Gardocki executed and delivered a written promissory note on Appellant's behalf to obtain a $1.6 million loan from Bank. Appellant would later claim that Gardocki acted beyond the scope of her power of attorney in obtaining the loan. However, Appellant acknowledged that when he signed a document entitled, “Limited Power of Attorney,” he understood that Gardocki “would proceed with the closing on the property.” He also admitted that Gardocki sent him the file containing relevant loan documents after the closing, and that he reviewed the files without raising any objections. In addition, Gardocki testified that she made Appellant “aware of the form and content of the closing documents ..., and he approved the same and authorized the closing. Appellant only raised concerns about the transaction when he realized the “the property wouldn't sell.”” My personal opinion: Agent's signing the deed necessarily falls under the category of “any act in connection with the above power”. So I take the power to sign the deed as “clearly implied”. See Patton. As noted above I think the third sentence's phrase “the above power” refers to the first sentence's larger power of “completing the sale of” [the described property]. It does not refer to the second sentence's power of mere execution of a HUD-1 form. Construction otherwise would render the conveyance impossible if the principal wasn't available to sign a deed. Courts will construe powers of attorney when necessary. Although the circumstances and Power of Attorney language differs from this case, the outcome of Gould v. Bowen, 26 Iowa 77 (1868) seems to me to apply here: “[W]e hold, that by a fair construction of the power of attorney offered in evidence, the agent was clothed with the power to make the transfer claimed.” Courts will try to avoid awkward constructions of powers of attorney; construing the powers so as to conform with the parties’ apparent intentions as logically deduced from their circumstances. For example see Foster v. Paine, 56 Iowa 622, 10 N.W. 214 (1881). You have a HUD Power of Attorney form. Possibly RESPA and HUD regs may (I don't know this) require specific authority for an agent to execute a HUD-1 for his principal. Which would explain the second sentence. But mere mention of one “specifically grant”ed power does not exclude other acts reasonably necessary to execute a transfer. Language of the Power of Attorney includes the phrase "any act". The only “act in connection with...execut[ing]” a “HUD-1 Settlement Statement” is to SIGN the HUD-1. To so hold would render unnecessary the word "any", and effectively nullify a term of the Power of Attorney.

By a HUD-1 a borrower/grantee does "acknowledge and accept the disbursements” that normally occur at a real estate deal closing; in general he approves the finances of a transfer. See Luttenegger v. Conseco Financial Servicing Corp., 671 N.W.2d 425 (Iowa 2003). A HUD-1 is legally useless without an underlying real estate transaction closing--just as a mortgage lien lacks any legal utility without a mortgage note underlying it. So I think that limiting the Power of Attorney to only authority to sign the HUD-1 effectively negates the entire transaction if the principal is not around to participate.

28. Affidavit by Power of Attorney.

FACTS: An abstract contains entries related to real estate transferred by a Trust. Entries include an Affidavit re: Inheritance Tax, and the Purchaser’s Affidavit.

Both such Affidavits were shown to be executed by a Power of Attorney for the Affiant. QUESTION: Can such Affidavit be signed and executed by a Power of Attorney for the Affiant? RESPONSE(S): The Power of Attorney is under the same penalties for perjury as the principal would be, and the Power of Attorney likely knows as much or more about the principal’s affairs that the principal does. I see no reason to

object on this basis. * * * * Assuming the Power of Attorney was given because of the person’s inability to

handle his or her own affairs, would you not apply that to the person’s actions as

Trustee as well? In that case, you may need to follow the terms of the trust document to name a successor trustee and have the successor sign. * * * * I think an affidavit is supposed to show what is known by the affiant from the affiant’s personal knowledge. I don’t see how the agent could be affirming that

his or her principal knows something. However, if the agent is merely identifying how the agent has come to know something, as a result of being the agent, and the facts are now within the personal knowledge of the agent, that would be acceptable to me. That should work for the Affidavit re: Inheritance Tax, but I would want the Trustee to sign the Trustee’s Affidavit (assuming this is a

revocable trust). Of course, the Purchaser’s Affidavit would be signed by a

purchaser, so that should not be a problem.

29. Affidavit by Power of Attorney.

FACTS: I am examining an abstract that shows a deed being executed by an attorney-in-fact. The Power of Attorney was executed in 1995 and specifically grants the attorney-in-fact the right to convey the real estate. Deed conveying the real estate was executed and filed in 2014. QUESTION: Is it reasonable to request an affidavit from the attorney-in-fact stating that the attorney-in-fact has no knowledge that the Power of Attorney has been revoked pursuant to Iowa Code Section 633B.1(2)? RESPONSE(S): Yes.

30. Deed Signature Clause.

FACTS: Proposed Deed signature clause showing entity as “attorney in fact” for

a separate Successor Trustee, of a separate foreclosing Bank (which took title in the Sheriff’s Deed that was issued in foreclosure). QUESTION: Does anyone have an issue with proposed signature by a Power of Attorney for a Trustee? RESPONSE(S): Under the new Power of Attorney act, a specific authorization may be included in the Power of Attorney to exercise fiduciary powers, but the principal must also be authorized to delegate such authority in the trust instrument. See Iowa Code Section 633B.201(1)(g).

31. Executor/Power of Attorney.

FACTS: An Executor in an Estate used a Power of Attorney appointing the attorney representing the Estate as Attorney-in-Fact for her as Executor of the Estate. The Power of Attorney specifically included executing/signing an Instrument of Conveyance, Deeds, vehicle titles, or any other documents that the undersigned would normally sign during the course of carrying out her duties as Executor of the Estate. QUESTION: Can an Executor assign responsibilities to an Attorney-in-Fact? Does anyone have any thoughts regarding the validity of a deed or other documents signed by the Power of Attorney of the Executor? RESPONSE(S): Hope the attorney’s malpractice insurance is paid. This is not a good idea. * * * * Or that the Client Security Fund has enough in it. If the Executor is too busy or too far away or physically or mentally not up to the job, he/she should be removed. I second the notion: This is not a good idea. * * * * Iowa Code Section 633.84 limits authority to delegate only upon Court order and in very limited circumstances.

32. Conveyance by Spouse to Self Under Power of Attorney Executed by Her Husband.

FACTS: A husband and wife own homestead real estate as tenants in common. The wife, acting as Attorney-in-Fact for her husband, quit claimed her husband’s interest in such homestead to herself pursuant to a Power of Attorney executed by her husband. To further complicate matters, the husband is now deceased, and neither the Quit Claim Deed nor the Power of Attorney have been recorded. The wife is now trying to sell the real estate. Closing is scheduled for Friday, and we have just learned that this is the situation (the abstract failed to disclose that husband is deceased). QUESTION: Is the Quit Claim Deed valid? RESPONSE(S): As I understand the facts, the short answer is that wife cannot provide marketable title under these circumstances. * * * * I would disagree. As I am understanding the situation, title should be clear. I see two potential problems with the chain of title: (1) the wife has released her husband’s property interests, statutory or otherwise, via acting as his attorney-in-fact, and (2) neither the Power of Attorney nor the deed were recorded prior to the husband’ death. As for (1), Title Standard 5.6 appears to be precisely on point; it specifically allows a spouse to release the other spouse’s property rights if a Power of Attorney has been executed by the other spouse. As for (2), Title Standard 4.10 creates a presumption of validity for delivered but unrecorded deeds; “the presumption of delivery exists even though the recording is after grantor’s death.” It goes without saying that you should record the deed and Power of Attorney immediately, but otherwise on these facts I would argue you have marketable title. * * * * Clearly the Quit Claim Deed and Power of Attorney must be placed of record. My concern is that the wife used the Power of Attorney to convey the husband’s interest as tenant in common to herself, quite likely for no consideration. Any heirs of the husband who are not also heirs of the wife may challenge the conveyance as self-dealing, unless the Power of Attorney clearly establishes the wife’s right to convey the property to herself.

* * * * I agree that there is an issue regarding self-dealing and that such transaction is outside the scope of the power of attorney. Is it possible to have the heirs sign Quit Claim Deeds? And have an affidavit filed by wife setting out the history of the transactions and, just to be overly cautious, have the affidavit include that no 706 is required to be filed and no inheritance tax is due. When did the husband die? If it has been more than five years and no estate can be opened, I would think that the Quit Claim Deeds and affidavit would be more than enough. * * * * It is my understanding that the husband died recently. It is also my understanding that the husband’s Will leaves everything to his surviving spouse. Would the best solution be to require that an estate be opened for the deceased husband with conveyance of his interest by Court Officer Deed from the executor? As to the issue of a potential lien for Iowa or Federal Estate Tax, could a recital be made in the deed that no Federal Form 706 is required? * * * * * Given the additional facts that you recite, I think the affidavit mentioned before would be adequate, although I would suggest having one of the heirs be the affiant. * * * * IF the Power of Attorney document expressly authorized the attorney in fact to make gifts, to herself, then the title is marketable when the Power of Attorney and Quit Claim Deed are filed. Matter of Estate of Crabtree, 550 N.W. 2d 168 (Iowa 1996): “The established rule is that a power of attorney must be strictly construed and the instrument will be held to grant only those powers which are specified.” Bloom v. Weiser, 348 So.2d 651, 653 (Fla. Dist. Ct. App. 1977); accord Whitford v. Gaskill, 119 N.C. App. 790, 460 S.E. 2d 346, 348 (1995), cert. granted, 342 N.C. 197, 463 S.E. 2d 250 (1995); see Abodeely v. Cavras, 221 N.W. 2d 494, 501-02 (Iowa 1974) (construing power of attorney as granting only powers specified therein). Because the power of attorney form used by Crabtree did not expressly grant Sherry the power to make a gift, she did not have that power. See Aiello v. Clark, 680 P. 2d 1162, 1166 (Alaska 1984); Johnson v. Fraccacreta, 348 So. 2d 570, 572 (Fla. Dist. Ct. App. 1977); In re Estate of Rolater, 542 P. 2d 219, 223 (Okla. App. 1975).”

Assuming Power of Attorney does not authorize gifts to the Attorney-in-Fact, I endorse the resolution posed by another writer (given that wife is sole recipient of the estate, is she also the executor?) Open an estate, and quickly obtain court authority to convey with wife signing all necessary consents. Taking the necessary steps to correct a difficult transaction almost always serves you better down the road, than does going with a half-baked solution just to finish a quick deal. * * * * Assuming that the Power of Attorney gave the attorney-in-fact the power to make gifts to herself, would I need to worry about the possibility of a medical assistance debt incurred by the now deceased husband? It is my understanding that the Will has a power of sale and that the wife is named as executor, so I don’t believe we would need court authorization to convey.

33. Power of Attorney. FACTS: I am examining an abstract with the following entries: Limited Power of Attorney in which Federal Home Loan Mortgage Corporation (Freddie Mac) by Jane Doe, Assistant Treasurer appoints Chicago Title Insurance Company dba Service Link, as attorney-in-fact, with full power and authority…to execute deeds and instruments that convey title to real estate owned by Freddie Mac. Deed from Federal Home Loan Mortgage Corporation by Chicago Title Insurance Company, its Attorney in Fact, by Ann Smith, AVP to John Homeowner. Neither document states that Jane Doe or Ann Smith has authority to sign on behalf of the companies. QUESTION: Is the Limited Power of Attorney to Chicago Title sufficient? Would you pass on the title? RESPONSE(S): Reliance upon the Limited Power of Attorney seems reasonable in these circumstances.

Useful language from State ex rel. Havner v. Associated Packing Co., 219 Iowa 419, 258 N.W. 456 (1935) so suggests: "If the power of attorney does not show the actual authority of the agent, it certainly shows the apparent authority, and the principal is just as fully bound by the apparent authority of the agent as by the actual authority in cases where the party with whom the agent deals is without knowledge of limitations upon the apparent authority. In the case at bar, there is no claim that any one had any knowledge of the limitation upon the apparent authority of Moore except the casualty company and Moore. If the casualty company were permitted now to come in and set up the fact that there was a secret arrangement between themselves and their agent as to what authority he had in the signing of a supersedeas bond, then, in every case where a supersedeas bond is filed, the bonding company could come in and set up the defense that their agent did not have authority to sign the bond, although the power of attorney on record showed that he had that authority, and as a result, before a litigant could collect upon a supersedeas bond, he would be forced to the expense and trouble of a trial in the lower court, and, of course, an appeal to this court by the casualty company. "In the case of Fishbaugh v. Spunaugle, 118 Iowa 337, 341, 342, 92 N. W. 58, 60, it is said: “It is a settled doctrine that the principal is bound not only by acts of his agent within the express limit of his instructions, but is also bound to the extent of the apparent authority conferred upon such agent; and this is true with reference to special agents as well as general agents. *** This rule is applicable even against private instructions limiting the agent's power, where such limitations are not brought to the notice of the parties with whom the agent deals.”

"A very similar case is the case of Denecke v. West, 184 Iowa 600, 169 N. W. 97. This court, speaking through the late Justice Weaver, said: “The appellant's further proposition, that the execution of such bond was not within the real or apparent scope of the authority conferred upon Higley, or Higley and Powell, is not borne out by the record. On the contrary, the power and authority of the company to enter into obligations of that nature being established, it is shown beyond doubt that such authority was delegated to their attorneys in fact. Naturally and properly upon this question we turn first to the written power itself, and that in express terms names both Higley and Powell as its lawful attorneys and agents, with power-‘to make, execute, seal, and deliver for and on its behalf as surety, and as its act and deed, any and all bonds, recognizances, or undertakings, in the state of Iowa, for and on behalf of the company. And the execution of such bonds or undertakings in pursuance of these presents shall be as binding upon such company, as fully and amply, to all intents and purposes, as if they had been duly executed and acknowledged by the regularly elected officers of the company at its office in Boston, Mass., in their own proper persons.’ "The resolution of the board of directors provided for the granting of such powers of attorney, and declared that the bonds executed by such attorneys or agents-‘shall be as binding upon such company as fully and amply to all intents and purposes as if they had been duly executed and acknowledged by the regularly elected officers of the company at its office in Boston, Massachusetts, in their own proper person.’ This power of attorney and its authorization, the appellant admits, was duly recorded in Iowa. In their letter transmitting this power of attorney to Higley the state agents describe it as giving powers which ‘are practically unlimited,’ but said to him he would have to be guided by the limitations set out in a certain letter from the company, which was furnished him with that instrument. This letter and its limitation upon the power of the attorney was not recorded, nor is there any showing that it ever came to the notice or knowledge of the plaintiff until developed in this litigation. This letter of instructions tells the agent he must read it into his power of attorney, informs him that he is authorized to issue certain bonds without submission to the home office, and among the bonds so enumerated is the following: ‘On contract bonds you are permitted to accept risks and execute bonds without reference provided the bond does not exceed $5,000 and the contract does not exceed $10,000.’ *** "So far as the letter of instruction is concerned, it may serve to measure the obligation of the agent to his principal and be a matter of material consideration in questions or controversies arising between them, but it is hardly necessary to cite authorities in support of the proposition that, unless such instruction or limitation upon the power of the agent holding a power of attorney is brought home to the notice or knowledge of a third person which deals with the agent as such, it is wholly immaterial and will not serve to relieve the principal from any obligation which, except for such instruction, would be binding upon him. City of Davenport v. Peoria M. & F. Ins. Co., 17 Iowa 276; Viele v. Germania Ins. Co., 26 Iowa 9, 58 [96 Am. Dec. 83]; Spence v. Chicago, R. I. & P. R. Co., 117 Iowa 1, 5, 90 N. W. 346; Fishbaugh v. Spunaugle, 118 Iowa 337, 341, 92 N. W. 58. There is, as we have already noted, an utter absence of evidence that the limitation so placed upon the authority of Higley was brought to the notice of

plaintiff, and we can conceive no sound reason for permitting the secret instructions by appellant to its agents to deprive plaintiff of his right to a recovery upon the bond. *** "Corporations, no less than natural persons, are held to the obligations of good faith and fair dealing.” Pages 611-614 of 184 Iowa, 169 N. W. 97, 100. "Thus we come to the conclusion that there can be no question that the Continental Casualty Company was obligated upon the bond signed by Moore in the case at bar, and, under the record before us, they cannot now be permitted to repudiate that obligation." Furthermore, "a general or managing officer will be presumed, in absence of proof to the contrary, to have authority to contract in the usual course of corporate business". [Citations]." Newberry v. Barth, Inc., 252 N.W. 2d 711 (Iowa 1977). The Court calls this presumed ability to contract "implied authority." The foregoing case law comports with Title Standard 3.3, which addresses the "authority to act" question and thus indirectly alludes to your situation. 3.3 PROBLEM: Revised 1/06 If an instrument affecting real estate is executed by a corporation, is it necessary to obtain a showing from its articles of incorporation, bylaws or by a duly adopted resolution of its board of directors that the individual who executed the instrument was authorized to do so? STANDARD: No. However, if the articles of incorporation are shown in the abstract, the examiner is bound to take notice of any limitations contained in said articles with respect to the powers of the individual to take such action. Authority: L. M. Simes & C. B. Taylor, Model Title Standards 12.3 (1960). My take: we examiners are bound to take notice of whatever documents in the abstract itself identify, limit or delimit authority of corporate officers (and by extension any other persons, e.g., attorneys in fact) to whom the corporation may delegate its authority to act. But if no such limitations appear then we're entitled to rely upon presumptions of law. A leading treatise agrees: "In the examination of every corporate deed there arises, therefore, the question as to whether the parties executing it on the corporation's behalf held the offices attributed to them and whether the holders of such offices were authorized to make the conveyance. In many states, the recording of an instrument or the use of the statutory form of the certificate of acknowledgement furnishes prima facie evidence of both matters. If no statutory presumption exists, or when the title

examiner has notice of facts that raise a question, then the safest course is to require that proof be made by conclusive evidence appearing of record. This proof may be in the articles of incorporation or in a certified copy of minutes of action taken by the board of directors or other governing body. ..." 2 Patton & Palomar on Land Titles Third section 411, pp. 320-21 (2003). Citing the above cases in favor, I would approve title.

34. Power of Attorney – Gifts to Attorney-in-Fact.

FACTS: Attorney-in-fact gifts real property of the ward to herself and power of attorney is silent as to attorney-in-fact’s gifting powers, whether to herself or anyone else. Power of attorney document and gift deed have been of record for 16 years. There have been two other intrafamily gifts of the real estate in the interim with it finally being sold outside of the family last year. QUESTION: Do you object and request additional filings or showings? RESPONSE(S): Matter of Estate of Crabtree, 550 N.W. 2d 168 (Iowa 1996) specifically declares, on your legal point: " “The established rule is that a power of attorney must be strictly construed and the instrument will be held to grant only those powers which are specified.” Bloom v. Weiser, 348 So. 2d 651, 653 (Fla.Dist.Ct.App.1977); accord Whitford v. Gaskill, 119 N.C.App. 790, 460 S.E. 2d 346, 348 (1995), cert. granted, 342 N.C. 197, 463 S.E. 2d 250 (1995); see Abodeely v. Cavras, 221 N.W. 2d 494, 501-02 (Iowa 1974) (construing power of attorney as granting only powers specified therein). Because the power of attorney form used by Crabtree did not expressly grant Sherry the power to make a gift, she did not have that power. See Aiello v. Clark, 680 P.2d 1162, 1166 (Alaska 1984); Johnson v. Fraccacreta, 348 So. 2d 570, 572 (Fla.Dist.Ct.App.1977); In re Estate of Rolater, 542 P. 2d 219, 223 (Okla.App.1975)." You say attorney-in-fact had no power to convey. With no power, any conveyance she tried to make to herself (presumably without consideration) is invalid = void. Martin v. Martin, 720 N.W. 2d 732 (Iowa 2006) Benson v. Richardson, 537 N.W. 2d 748 (Iowa 1995): "The existence of a “blood relationship” is not a per se indication of fraud, but its existence strengthens the inference of a fraudulent conveyance and we will apply close scrutiny to such a transaction. Production Credit Ass'n, 485 N.W. 2d at 472; Graham, 456 N.W. 2d at 366; Price v. Scharpff, 220 Iowa 125, 128, 261 N.W. 511, 512 (1935); Muehlenthaler, 347 N.W. 2d at 690; see also First Nat'l Bank v. Frescoln Farms, Ltd., 430 N.W. 2d 432, 435-36 (Iowa 1988) (transactions between a parent and child will be closely scrutinized). When analyzing a transfer between relatives, we look for strict proof of the existence of consideration and the fairness of the transaction. Graham, 456 N.W. 2d at 366. "We presume a transfer of property without consideration is fraudulent. Frescoln Farms, 430 N.W. 2d at 435; Regal Ins. v. Summit Guar. Corp., 324 N.W. 2d 697, 703 (Iowa 1982). In order to rebut this presumption of constructive fraud, the transferee must prove the transferor remained solvent after the transfer. *757 Frescoln Farms, 430 N.W. 2d at 435; Regal Ins., 324 N.W. 2d at 703. The law does not require parties challenging a transaction as constructively fraudulent to establish actual dishonesty or intent. Frescoln Farms, 430 N.W. 2d at 435; Regal Ins., 324 N.W. 2d at 703."

Legal title almost certainly remains in the principal. Only possible exception arises if attorney-in-fact provided good and adequate consideration, and this can be shown of record. I certainly would object to title as it stands. The link in the title chain represented by the attorney-in-fact most likely is no good. If the principal remains alive I would require a conveyance deed from him and any spouse. If the principal is dead within five years last past, then I would require probate of his estate and conveyance from his personal representative. If the principal is dead more than five years last past then I would require a) Affidavit Explanatory of Title under Iowa Code Section 558.8, laying out who received the principal's estate and in what shares, and b) conveyances from each of those persons and any spouses of each.

35. Foreclosure – Power of Attorney - Assignor.

FACTS: I am examining an abstract where the current titleholder took by Sheriff’s Deed after a foreclosure. The foreclosure action was brought by the fourth assignee of the original mortgage. The third assignment of mortgage was executed by a purported attorney-in-fact for the assignee with no Power of Attorney of record. The defective assignment was in 2010. A decree in the foreclosure was entered in May of 2013 and the Sheriff’s Deed was recorded in October of 2013. QUESTION: Do you think the issue with lack of a Power of Attorney instrument of record is something that needs to be addressed? RESPONSE(S): I assume that the purported attorney-in-fact was for the assignor, not the assignee. I would tell the seller’s attorney that unless a proper Power of Attorney can be produced and filed of record, the foreclosure will have to be reopened to resolve the assignment issue, presumably by adding the purported assignor as a defendant and requesting a ruling that the defendant-assignor’s apparent interest be foreclosed out.

wednesday, june 21, 2017 real estate rooms: 316-317 ...€¦ · iowa conservatorships 1. the case...

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