Section 26-9-10 - Investment of funds of estate by guardian; limitation as to loans of funds of ward(a) Every guardian shall invest the funds of the estate in one or more of the following forms in which the guardian has no interest and not otherwise: (1) Interest-bearing obligations of the State of Alabama or of the United States or as to which the State of Alabama or the United States has guaranteed the payment of both principal and interest.(2) Loans secured by direct first mortgage on improved real estate located within the State of Alabama. Such loans shall not exceed 50 percent of the actual value fixed by a competent appraiser or of the value for which such real estate, with improvements, was assessed for taxation for the last preceding tax year, whichever is the lower, except as provided in subdivision (3) of this section.(3) Purchase of indebtedness secured by first real estate mortgages which have been accepted for insurance by the Secretary of Housing and Urban Development or his or her successor in office pursuant to Title II of the National Housing Act; provided, that only the entire indebtedness as a unit is purchased and before maturity.(4) Purchase of a home or farm for the sole use of the ward or his or her dependents if the ward does not already own real estate suitable for a home, such real estate to be located in the State of Alabama and to be of area and location suitable to the station in life and prospects of the ward and his or her dependents. Title thereto must be conveyed to the ward, but the property must be managed by the guardian for the ward and the guardian must account for any rents and profits derived therefrom. Before investing funds of the ward in real estate, the guardian must require an abstract of title to be examined by a reputable attorney and secure from such attorney a certificate in writing showing title thereto to be clear and free from any incumbrance. The guardian, acting in good faith, shall not be individually responsible for any depreciation in value of land so purchased when such depreciation results from causes which cannot be prevented by the guardian.(5) Deposit in the savings department of any banking institution in the state which bank is a member of the Federal Deposit Insurance Corporation; provided, that the total amount deposited in any such bank, with interest, must not at any time exceed the amount by which such funds so deposited are insured by the Federal Deposit Insurance Corporation. In the event the fiduciary is a banking institution, it may likewise deposit the funds in its own savings department, subject to the same regulations as other savings depositors therein and shall be liable for interest thereon, but only at the same rate as that paid other savings account depositors.(b) No fiduciary shall make any loan of the funds of the ward for any period in excess of one calendar year from the date of such loan without prior written approval of the court of appointment, which written approval shall not be granted except upon the filing with the court of an application verified by the oath of the guardian setting forth the identity of the proposed borrower, the amount proposed to be loaned, the terms of repayment, the interest rate, a complete description of the real estate and improvements, a statement that the guardian has no interest therein, and the facts upon which the guardian deems it proper to negotiate a loan for a period longer than one year, which application must also be accompanied by a written appraisal of the proposed security by a competent, disinterested appraiser.Ala. Code § 26-9-10 (1975)
Acts 1931, No. 240, p. 280; Acts 1936-37, Ex. Sess., No. 227, p. 270; Code 1940, T. 21, §172.