In the recent decision of Jasser_v_Saadeh, (4th DCA 2012), the Fourth District Court of Appeal determined that a ward, with an emergency temporary guardian who has been granted all of the ward’s legal rights, lacks legal capacity to enter into trust agreements. Any trust agreement entered into by the ward is void ab initio.
Guardianship proceedings were initiated against Karim Saadeh, and the Court appointed an emergency temporary guardian (ETG). In appointing an ETG for Saadeh, the trial court removed all of Saadeh’s rights, except his right to vote. The order appointing the ETG delegated to the ETG the power to exercise all delegable legal rights and powers of Saadeh with the exception of Saadeh’s right to vote.
During the time of Saadeh’s emergency temporary guardianship, Saadeh’s ETG directed Saadeh to sign a trust agreement. Despite being titled a revocable trust, the court held that the trust was not revocable by Saadeh, and essentially gave his children, who had initiated the guardianship proceedings, control of Saadeh’s assets.
After Saadeh’s execution of the trust, an examining committee was appointed to determine Saadeh’s incapacity. In all other respects, the temporary guardianship continued, and Saadeh did not regain any of his rights. Upon the reports of the examining committee, which unanimously determined that Saadeh was competent, the court dismissed the petition for guardianship.
Saadeh filed a petition to revoke the trust that Saadeh had signed under the direction of Saadeh’s ETG. The trial court found that when it appointed the ETG and granted her all of the ward’s legal rights, it thereby removed them from the ward. Thus, Saadeh had no legal capacity to enter into the trust agreements. Therefore, the trust agreement was void ab initio. Thus, even though Saadeh was ultimately determined competent, because Saadeh had signed the trust during the time period when his power to exercise his legal rights had been delegated to the ETG, Saadeh had no legal right to sign the trust.
The appellate court upheld the trial court’s decision, stating: “[A]t the time of the execution of the trust, the right to contract had been removed from Saadeh…Thus, because Saadeh had no legal right to execute the trust, the trust was invalid and void.” Even though Saadeh had actual capacity to execute the trust, Saadeh had no legal capacity.