An Arkansas Guardian of the Estate: Possession Is Compulsory, and the Rest Is Trust Law

Arkansas is the second state in this series with no repair clause for a guardian - Ohio is the other - and it reaches that position from the opposite direction. Ohio limits a guardian to enumerated authority and then writes an elaborate procedure for improvements. Arkansas writes a short duty, makes possession of the real property compulsory, and hands everything the chapter does not cover to the law of trusts.

Five Duties, and the First One Is Preserve

Section 28-65-301 separates the two offices. Subsection (a) gives the guardian of the person the duty to care for and maintain the ward out of the estate's resources. Subsection (b)(1) gives the guardian of the estate five:

• "To exercise due care to protect and preserve it"
• "To invest it and apply it as provided in this chapter"
• "To account for it faithfully"
• "To perform all other duties required of him or her by law"
• "At the termination of the guardianship, to deliver the assets of the ward to the persons entitled to them"

Due care to protect and preserve. On a house that is the whole of the statutory instruction - and it is a standard of conduct rather than a list of tasks. Nothing in Subchapter 3, which runs to Section 28-65-323, tells a guardian to repair anything, maintain anything or keep anything in any particular condition.

Then It Hands the Rest to Trust Law

Section 28-65-301(b)(2) is a single sentence and it does a great deal of work: "To the extent applicable, the law of trusts shall apply to the duties and liabilities of a guardian of the estate."

That is the Arkansas answer to the missing repair clause. The guardianship chapter is not a complete statement of what a guardian of the estate owes; it is a frame, and trust doctrine supplies the content - prudence, loyalty, the duty to take and keep control of trust property, and liability for a breach. The practical consequence is that a guardian cannot read Subchapter 3, find no instruction about the building, and conclude that nothing is owed on it. The instruction is simply somewhere else.

The reference is also qualified - to the extent applicable - which means the fit between a particular trust rule and a particular guardianship question is itself an argument. This is the one state in the series where the answer on a specific maintenance question is least likely to be found by reading one section.

Possession Is Not Optional

Section 28-65-304 is two sentences: "The guardian of the estate shall take possession of all of the ward's real and personal property, and of rents, income, issue, and of the proceeds arising from the sale, mortgage, lease, or exchange thereof. Subject to the possession, the title to all the estate and to the increment and proceeds of the estate shall be in the ward and not in the guardian."

Shall take possession of all. Not may; not on application; not where the court directs. From appointment, the ward's vacant house is in the guardian's hands, together with any rents it produces, and the guardian holds it while the ward keeps the title.

The Same State Says the Opposite About a Decedent

This is the part worth knowing if you work both sides of the Arkansas probate docket. Section 28-49-101, which governs a personal representative, does not place real property in the representative's hands automatically, and its repair and maintenance powers are permissive - the representative may repair, once the property has become an asset of the estate or the court has found preservation necessary.

So Arkansas answers the same question twice and differently. For a deceased owner, possession of real property is conditional and repair is a power. For a living ward, possession is compulsory and preservation is a duty. A fiduciary moving between the two roles - and a contractor taking instructions from one - should not assume the authority travels. For the decedent's side, see the Arkansas personal representative's position.

The Guardian of the Person Cannot Touch It

Section 28-65-301(a)(3) draws the line hard: the guardian of the person "shall be entitled to the custody of the ward but shall not have the power to bind the ward or his or her property." Where the two offices are held by different people, an instruction about the house from the guardian of the person is not authority to do the work. Section 28-65-301(a)(2) adds that the guardian of the person may be required to report the ward's condition to the court at intervals the court directs - the ward's condition, not the property's.

Anything That Disposes of It Runs Through the Court

Section 28-65-314(a)(1) is the disposition provision, and it is drawn widely. The ward's real or personal property - expressly "not excluding real property in which a minor or mentally incompetent ward has a vested homestead interest" - or any part or interest in it may be sold, conveyed, released, mortgaged, leased or exchanged, or an easement granted, by the guardian of the estate "upon such terms as the court may order." The permitted purposes are paying the ward's debts; providing for the care, maintenance and education of the ward and of the ward's dependents; investing the proceeds; or any other case in which it is for the best interest of the ward.

Note where leasing sits. In Ohio a guardian may let the ward's property for three years without asking anyone. In Arkansas a lease is in the same sentence as a sale and on the same terms as the court may order.

Section 28-65-308(a) adds borrowing: on a showing that the action would be advantageous to the ward and the estate, the court may authorise the guardian to borrow money, execute notes and other legal evidences of indebtedness, and mortgage the ward's property in accordance with Section 28-65-314. An estate without cash cannot fund work against the house on the guardian's own authority.

And the Guardian Cannot Buy It

Section 28-65-314(b)(1): a guardian shall not purchase property of the ward unless it is sold at public sale and approved by the court, and then only where the guardian is a spouse, parent, child, brother or sister of the ward and is a cotenant with the ward in the property. The exception in (b)(2) requires a special guardian, an appraisal, a report that the private purchase is in the ward's best interest, court approval, and notice to interested parties.

Inventory, Account, Report

Three separate filings, with three different contents.

• Section 28-65-321 - the guardian of the estate files an inventory in the same manner and subject to the same requirements as Section 28-49-110 provides for a decedent's estate, and the court may in its discretion order the property appraised by one or more disinterested and qualified persons it appoints
• Section 28-65-320 - a written verified account of the administration, annually within sixty days after the anniversary date of appointment and within sixty days after termination, with notice given as for the appointment petition, and each item of claimed credit showing whether or not it has been paid
• Section 28-65-322 - an annual report from all guardians covering the ward's current mental, physical and social conditions, present living arrangements, the need for continued guardianship services, an accounting where the guardian holds the estate, and anything else the court requests or the guardian thinks necessary

Section 28-65-320(e) imports the personal representative accounting provisions at Sections 28-52-101, 28-52-103 to 28-52-105, 28-52-107, 28-52-108 and 28-52-110, and Section 28-65-320(d) makes a settled account binding on all persons concerned once notice has been given, subject to appeal and to the court's power to vacate.

A Late Account Costs the Guardian, Not the Estate

Section 28-65-320(f): a guardian who fails to file an accounting within the time limit "may be denied compensation for services performed between the date an accounting should have been filed and the date it is filed." Pennsylvania has the orphans' court clerk reporting delinquents quarterly; Ohio removes a guardian who is thirty days late with the inventory after judicial notice. Arkansas takes the fee.

What This Means on a Ward's Vacant House

• Treat possession as immediate - Section 28-65-304 does not wait for an application
• Establish condition at the outset; due care to protect and preserve is measured against a starting point nobody else will record
• Take instructions from the guardian of the estate, not the guardian of the person, who cannot bind the ward's property
• Expect preservation work to be funded from the estate; borrowing against the house needs a court order under Sections 28-65-308 and 28-65-314
• Do not assume a lease can be arranged informally - leasing sits with sale in Section 28-65-314(a)(1)
• Invoice so each item can be shown as paid or unpaid; the account must state it and the court may disallow an item in whole or in part
• Keep the condition record continuous, because trust-law prudence, not a checklist in the chapter, is the standard being applied
• Mind the sixty-day anniversary deadline - a late account can cost the guardian the fee for the period it covers

For the neighbouring regimes, see a Texas guardian of the estate, a Louisiana curator and the interdict's property, an Alabama conservator, an Oklahoma guardian of the property, an Ohio guardian of the estate and a Pennsylvania guardian of the estate.