Gurfinkel v. Josi, — So.2d —-, 2007 WL 4322156 (Fla. 3d DCA Dec 12, 2007)
Probate litigation involving powers of attorney seem to always revolve around whether the attorney in fact acted outside the scope of authority granted by the instrument [click here, here for past examples]. This case is yet another variation on the same theme. Here the issue was whether the attorney in fact was authorized to amend the settlor’s revocable trust effectively disinheriting two of the settlor’s three children. The trial court said "yes," the 3d DCA said "no way."
Simply figuring out what to focus on in any type of litigation – including contested probate proceedings – is half the battle. In probate litigation involving powers of attorney, focus is everything.
1. POA v. Revocable Trust: Focus on the Trust Agreement:
If the dispute revolves around the use of a POA to amend or revoke a trust agreement, don’t let yourself get sucked into a battle over whether or not the POA is valid, the product of undue influence, lack of capacity, blah, blah, blah. Stay focused on the trust agreement! In this case, the trial court ruled that a POA could be used to amend a trust agreement . . . even though the express language of the trust agreement said that was a definite "no-no." Here’s how the 3d DCA explained its reversal of the trial court on this point:
In this case, the Trust expressly reserves the right to amend or withdraw assets from the Trust to the grantor. Article VI, Paragraph E, further prohibits any “conservator,” “guardian,” or “any other person” from exercising these rights during the lifetime of the grantor. (Emphasis added.) The language of the reservation and prohibition in this case are very similar to those considered by the First District Court of Appeal in Mann v. Cooke, 624 So.2d 785, 786-87 (Fla. 1st DCA 1993). Although the prohibition in Mann also included an “attorney-in-fact” among those prohibited from exercising the rights of the grantor during his lifetime,[FN1] we find that to be a distinction without a difference. As in Mann, we conclude the prohibition in this case “unambiguously provides that the holder of a durable power of attorney cannot withdraw trust funds.” Id. at 787.
[FN1.] The prohibition treated in Mann reads: “Neither a conservator, attorney in fact, nor a guardian of the Grantor, nor any person other than Grantor may exercise any of the rights reserved to Grantor by the provisions of this Article.” Mann, 624 So.2d at 787 (emphasis added).
2. ANY contested POA: Focus on F.S. 709.08:
What is often overlooked in litigation involving POAs is that under F.S. 709.08 the authority granted by a POA is very narrow. In other words, under F.S. 709.08 an attorney is usually NOT authorized to take action (such as amending a revocable trust) unless the POA expressly says you CAN do it [click here for prior example of same point]. So if the POA is being challenged, focusing on the F.S. 709.08 makes sense. Here’s on the 3d DCA made this point in the linked-to case:
Josi argues that Paragraph 16 of the Durable Power of Attorney condones his father’s attempt to amend the Trust. We disagree. Just as the power to revoke or amend a trust must be exercised in strict conformity with the terms expressed in the instrument, see MacFarlane, 203 So.2d at 60, authorizations conferred through powers of attorney likewise must strictly conform. See § 709.08(7)(b)(5), Fla. Stat. (1999) (providing that an attorney-in-fact acting under a Durable Power of Attorney may not “[c]reate, amend, modify, or revoke any document or other disposition effective at the principal’s death or transfer assets to an existing trust created by the principal unless expressly authorized by the power of attorney ….”) (emphasis added); James v. James, 843 So.2d 304, 308 (Fla. 5th DCA 2003) (“In general, an agent cannot make gifts of his principal’s property to himself or others unless it is expressly authorized in the power .”) (emphasis added); Vaughn v. Batchelder, 633 So.2d 526, 528 (Fla. 2d DCA 1994); Kotsch v. Kotsch, 608 So.2d 879, 880 (Fla. 2d DCA 1992); De Bueno v. Alejandro Bueno Castro, A.B.P., Inc., 543 So.2d 393, 394 (Fla. 4th DCA 1989); Bloom v. Weiser, 348 So.2d 651, 653 (Fla. 3d DCA 1977) (“[T]he instrument will be held to grant only those powers which are specified.”).