By Fredrick P. Niemann, Esq., a New Jersey Estate Administration and Probate Attorney
The answer to this question is yes, but with conditions. New Jersey probate laws require that:
Any sale to the fiduciary, his spouse, agent or attorney, or any corporation or trust in which he or she has a substantial beneficial interest, or any transaction which is affected by a substantial conflict of interest on the part of the fiduciary, is voidable by any person interested in the estate except for a beneficiary who has consented after fair disclosure, unless:
- the will or a contract entered into by the decedent expressly authorized the transaction; or
- The transaction is approved by the court after notice to all interested persons.
In one case that I’m aware of, the wife was declared incompetent, and the husband was appointed as guardian. They owned a house and other property jointly, but the husband obtained a loan on commercial property titled solely in his name, which was secured by the marital home that was jointly owned with his spouse. The husband died and the plaintiffs, his children, were appointed co-guardians over their mother. The defendant-bank sought to collect its defaulted loan against the marital home as the first mortgage holder on the property. The plaintiff-children asserted that the mortgage was invalid as the husband had failed to obtain court permission before disposing of the property. The court held that the ward’s property was not vigorously protected and that the husband had acted improperly and under a conflict when he purchased the commercial property titled solely in his name. The court held that New Jersey laws were applicable because, although the bank knew of the guardianship, it had allowed the transaction anyway, which showed less than good faith on its part.
If you have questions regarding a estate administration and probate matter, please contact Fredrick P. Niemann, Esq. toll-free at 855-376-5291 or email him at email@example.com.