O'Neal by and Through Small v. O'Neal, 254 N.C. App. 309

Background

Barbara O’Neal was adjudicated incompetent in August 2011 and Pamela O’Neal (her granddaughter) was appointed general guardian; Pamela served for ~4 years and was later removed.
On 10 October 2015 (after adjudication but two days before the clerk formally revoked Pamela’s guardianship), Barbara executed a durable power of attorney naming Pamela as attorney‑in‑fact; that POA was recorded.
Pamela, acting under that POA, executed three quitclaim deeds (30 Oct 2015 and 10 Nov 2015) transferring Barbara’s parcels into three trusts for which Pamela was trustee.
On 18 Nov 2015 an attorney was appointed guardian of Barbara’s estate and revoked the October POA; Pamela procured a second POA on 4 Dec 2015 which was also revoked and not used.
The guardian (plaintiff) sued to declare both POAs and the three deeds void. The trial court granted judgment on the pleadings for plaintiff; defendants appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a power of attorney executed by an adjudicated incompetent is void ab initio, and whether deeds executed by the attorney‑in‑fact under that POA are void	Barbara (guardian) argued that because Barbara had been adjudicated incompetent and competency had not been restored, the POA was legally ineffective and thus deeds executed under it were void	Defendants argued that adjudication of incompetence does not automatically nullify all transactions — incapacitated persons may retain capacity for some acts and contracts executed by an incompetent can be voidable rather than void	The court held the POA was void ab initio because it was executed after Barbara’s adjudication of incompetence (and competency was not restored). Consequently the deeds executed by Pamela under that POA were void.
Whether concerns about protecting innocent third‑party purchasers or public policy justify upholding the transfers	Plaintiff argued public records (special proceedings index and land records) protect purchasers and that guardianship statutes provide proper channels for transfers	Defendants argued public policy favors allowing an incompetent person to direct care/property via POA and that innocent purchasers could be harmed	The court rejected defendants’ policy argument: a judicial adjudication of incompetence precludes a valid POA; purchasers are on constructive notice of guardianship records and guardians may seek court authorization for transactions when in ward’s interest.

Key Cases Cited

Tomlins v. Cranford, 227 N.C. 323 (court held instruments executed after adjudication of incompetency are void absent restoration of capacity)
Wadford v. Gillette, 193 N.C. 413 (same principle that deeds executed after adjudication are void)
In re Will of Maynard, 64 N.C. App. 211 (adjudication of incompetence is prima facie evidence affecting testamentary and contractual capacity; distinction between manage‑affairs capacity and testamentary capacity)
Geitner v. Townsend, 67 N.C. App. 159 (capacity to marry treated differently from other contractual capacities)
Davis v. Davis, 223 N.C. 36 (presumption that incompetency continues after adjudication)
Stegall v. Robinson, 81 N.C. App. 617 (purchasers have constructive notice of duly recorded documents and indices)