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Conservator’s Self-Dealing Set Aside Despite Court Approval

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If an individual becomes incapacitated someone must take responsibility for his or her business affairs. That may mean the appointment of a conservator (in some states, “guardian of the estate”) by the court. Sometimes the individual will have had the foresight to establish a trust, or at least name an agent in a durable power of attorney, before becoming incapacitated. Whatever the title, the person who handles financial matters for an incapacitated individual does so in a “fiduciary” capacity, and is held to very strict standards.

One of the central principles governing fiduciaries is that they are not permitted to “self-deal.” In other words, a fiduciary may not personally profit from the position of trust, except by charging a reasonable fee for services.

Bessie Jordan, a retired school teacher, lived in Ida County, Iowa. Ms. Jordan’s principal asset was a 79% interest in the farm she inherited from her family, consisting of 423 acres. When she became incapacitated it seemed logical to appoint her nephew George Remer as her guardian and conservator. After all, he was already managing the family farm for Ms. Jordan, and he was a licensed attorney.

For several years Mr. Remer continued to rent the family farm. His annual rent payment to Ms. Jordan amounted to a little over $20,000. By late 1988, however, Ms. Jordan had moved to a nursing home and the cost of her care was escalating; Mr. Remer decided it was time to sell her interest in the farm. He proposed to sell it to a corporation owned by his wife.

While such a sale would normally be forbidden, the court can approve a transaction between the fiduciary and his ward if stringent guidelines are met. The fiduciary must demonstrate that the sale is necessary, that the price is fair, and that the fiduciary is not taking any advantage of the position of trust. To help protect against abuses, notice of the proposed transaction must be given to all interested persons.

Mr. Remer obtained two appraisals of the farm property, and he proposed to sell it to his wife’s corporation at the higher of those two figures. He disclosed to the court that his wife was the buyer, and he argued that Ms. Jordan’s nursing home bills would require the liquidation of the property. The court approved the sale.

Four years later Bessie Jordan died, and four years after that her estate filed an action to set aside the transaction. The probate court, noting that it had been approved at the time, declined to cancel the sale, and the estate appealed to the Iowa Supreme Court. The state’s highest court pointed out that no notice of the sale had been given to Ms. Jordan herself, and that the sale could therefore be invalidated. Furthermore, said the Justices, the terms of the sale were not in Ms. Jordan’s best interests; because of the structure of payments, her total annual income was actually lowered from the lease payments she had been receiving from Mr. Remer. The Supreme Court directed that the transaction be set aside, and Mr. Remer ordered to pay the difference between the annual payments and what would have been collected under the lease agreement.

The Supreme Court also approved most of the probate judge’s determination that Mr. Remer owed another $87,731 to Ms. Jordan’s estate (although the figures were adjusted in various small ways). It also left standing an additional $20,000 punitive damage award against Mr. Remer, agreeing with the probate judge that “Mr. Remer’s course of self-dealing was persistent, extreme and pervasive.  It continued over a long period of time and affected almost every aspect of Ms. Jordan’s financial affairs.” In the Matter of Jordan, September 7, 2000.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.