Not always, as recently decided by the Michigan Court of Appeals. Tomcal as Conservator for WR v. Thomas Beird, M.D.
A conservator is an individual who manages the finances of an incapacitated individual, and a conservator cannot sell real estate owned by the incapacitated person without prior probate court approval. MCL 700.5423(3). Generally, a conservator (like any other fiduciary) has an obligation to seek the highest price obtainable for the sale of real estate. This duty includes consideration of (1) the real property’s fair market value; (2) the proper marketing of the property; and (3) the adequacy of the price. However, there are other facts and circumstances the fiduciary can consider when choosing between competing offers beyond just the price.
In this case, WR owned real estate that his conservator needed to sell to pay the deposit for an assisted living facility. Unless and until the conservator liquidated the real estate, the conservator would have difficulty meeting WR’s needs.
The conservator received two offers from different purchasers: (1) Peter Vondette (“Vondette”) offered $300,000 with an addendum to buy the personal property on the property for an additional $25,000, and (2) Thomas Beird, M.D. (“Beird”) offered $305,000 with contingencies and an escalation clause that had the potential to raise the offer to $325,000, but it did not contain an offer as to the personal property. The conservator accepted Vondette’s offer subject to the probate court’s approval, and the probate court approved. Beird appealed.
The Court of Appeals affirmed, recognizing that the collective offer by Vondette was in WR’s best interests because WR needed immediate funds to pay for his needs and Beird’s offer had contingencies that could result in delays or no sale. The Court of Appeals also rejected Beird’s argument that the conservator breached a duty to WR by failing to inform Beird that he could modify his purchase offer as Beird provided no legal authority to support this argument.
While typically selecting the highest offer is the safest course of action for a fiduciary, this case provides an example of how the facts and circumstances can justify a different selection.