Self-Dealing Is Presumed Invalid
When a conservator manages another person's finances, the risk of self-dealing is real. Any sale or pledge of the protected person's property that benefits the conservator is voidable. This means the court can undo it.
Any sale or encumbrance to a conservator, his spouse, agent or attorney, or any corporation or trust in which he has a substantial beneficial interest, or any transaction which is affected by a substantial conflict of interest is voidable unless the transaction is approved by the court after notice to interested persons and others as directed by the court.
A.R.S. § 14-5422The rule is broad. It covers deals with the conservator, their spouse, agent, or attorney. It also covers deals with any entity where the conservator has a major interest.
Any transaction "affected by a major conflict of interest" can be voided. This gives courts the power to address creative schemes.
The Only Exception: Court Approval
The conservator may ask the court to approve a conflicted transaction. The court must give notice to all interested persons and hold a hearing first.
This is not a rubber stamp. The conservator must show the deal is fair and good for the protected person. These conflict rules apply whether the appointee is a family member or a professional fiduciary.
An interested party who suspects self-dealing can raise the issue with the court. Acting quickly helps preserve the estate and protect the person who cannot speak for themselves.