September 28th, 2011
Iowa’s Code contains strict limitations on what acts a conservator can take without prior court approval. For example, Iowa Code section 633.647 provides that “[c]onservators shall have the following powers subject to the approval of the court after hearing on such notice, if any, as the court may prescribe: . . . [t]o invest the funds belonging to the ward.” (Emphasis added.)
On their face, these limitations seem like a lot of unnecessary hassle, increase the fees and expenses of conservatorships, and potentially cause the conservatorship estate to miss out on financial opportunities. On the other hand, the statutory limitations would also seem to protect conservators who get the court’s blessing before taking any acts that might jeopardize the ward’s assets.
In In the Matter of the Conservatorship of Rose V. Alessio, the Iowa Supreme Court answered the question of what happens to a conservator who fails to get court approval before investing a ward’s property. The answer appears to be that prior approval doesn’t really matter. Conservator liability will rest on whether there is a showing that there was otherwise a breach of fiduciary duty owed by the conservator to the ward. (more…)