When assisting senior citizens in real estate transactions, the most important thing to keep in mind is that we each age individually. There are plenty of octogenarians or even nonagenrians (people in their nineties) who are fully capable of handling such transactions without assistance. However, chances are that we will need more assistance as we age.
When engaging with older clients, whether it involves a listing, house-hunting or otherwise, you may want to inquire if there is someone else you can contact if you cannot reach them. Is there a local relative who does – or does not – have their authorization to receive the information regarding the transaction? Inquire if the property is or will be in the name of a trust and, if so, request contact information for the successor trustee just in case. If they do not have a trust, do they have a financial power of attorney (“POA”)? Since many financial institutions will not honor a POA that is more than 5 years old, you may suggest that they update or renew their POA. The POA should specifically mention that the agents have the power to sign to buy or sell real property for a title company to accept it.
If you have particular concern that your clients do not fully understand the transaction and question if they have the competence to sign the contracts, you should contact their successor trustees or agents under the POA, or you can decline to work with the clients without medical confirmation of their competence.
To determine whether a successor trustee or agent under a POA can take over the real estate transaction, you need an interpretation of the trust or the POA. Absent a written resignation of the original trustee, some trusts have an automatic transition to the successor trustee, while others require medical confirmation of the clients’ incompetence for activation. Some POAs are effective upon execution and others are not effective until medical confirmation of incompetence as well. Therefore, a child cannot simply advise you that they are taking over and completing the transaction. You should ask an attorney or the title company to determine what is necessary to accept the successor trustee or agent under the POA.
So, if there is no trust nor POA and you are concerned that the clients are not competent, can you just let them sign anyway? We do not recommend it. The transaction is voidable on behalf of the clients. A person with priority under the statute, A.R.S. Section 14-5410, could seek appointment as a conservator to overturn the transaction. It’s better for the person to seek appointment in advance and then to act in the clients’ place to complete the transaction. The appointment as a conservator can be limited to just the real estate transaction or apply in general for all the clients’ financial needs. It requires notice to other persons of priority, including spouses, children, parents and siblings, education to learn the responsibilities of a conservator, a hearing and court-approval of the real estate sale or a bond for the value of the clients’ property. The process generally can be completed in four to six weeks, absent objection by the clients or other interested parties. If any objection is entered, the process may take months of litigation.
In circumstances where you are concerned as to your clients’ safety, well-being or whether your clients are being financially exploited, it’s best to pause the transaction and contact Adult Protective Services (“APS”) toll free at 877-767-2385 or in Tucson 520-872-9005. APS will investigate and advise if you can continue the transaction.