Taxation & Estate Planning

POWER OF ATTORNEY HOLDER COULD NOT MODIFY TRUST [FLORIDA]

By Charles Rubin

A common estate planning document is a durable power of attorney. This POA typically grants broad authority to the designee to act on behalf of the principal. A durable POA will survive the incapacity of the principal, providing an alternative to guardianship in the event a principal becomes unable to act for himself or herself.

Revocable trusts are another common estate planning document. Typically, such documents can be amended freely by the settlor. However, they often have limits on the ability of third parties, such as a guardian, to modify the trust on their behalf.

In a recent Florida case, a settlor's revocable trust prohibited any conservator, guardian, or “any other person” from exercising the rights of amendment during the lifetime of the grantor. A holder of a durable POA asserted that the POA allowed him to modify the settlor's trust.

The court made short-shrift of the POA holder's argument, and held that the prohibition language include a POA holder.

A more interesting case would have arisen if the POA explicitly granted the power to amend to the POA holder - then there would have been a direct conflict between the POA and the trust. However, in the instant case, while the POA holder did assert that some language under the POA authorized amendment, the POA language really didn't have any clear language to that effect.

ROSE GURFINKEL, etc., et al., Appellants, vs. JOSI, a/k/a JOSEPH MARMOR, etc., et al., Appellees. 3rd District. Case No. 3D06-1616. L.T. Case No. 05-3664. Opinion filed December 12, 2007.

Full post as published by Rubin on Tax on February 04, 2008 (boomark / email).