Power Of Attorney Agent Not Surcharged Where Document Permitted Authority To Make Gifts
The court declined to impose a surcharge on an agent acting under a power of attorney where the document permitted the general unlimited authority to make gifts.
In December 2006, Verna L. Tyreman (“decedent”) entered a care facility. Decedent had executed a power of attorney naming Bennett Crossdale (“respondent”) as her authorized agent. Decedent’s husband predeceased her, and the couple had no children. Respondent was a cousin of decedent.
Under the power of attorney, respondent assisted decedent in paying her bills, and he brought decedent her checkbook when she asked for it. Between 2009 and 2012, gifts totaling $145,000 were made from decedent’s account to respondent, his mother and his wife.
Walter Boquist (“objector”) was also a cousin of decedent. He filed a request with the court for an accounting. After respondent filed the first and final account, objector took issue with several items, and he asked that the court impose a surcharge on respondent for failing to properly perform his duties under the power of attorney.
Objector argued that respondent exceeded his authority when he signed checks on decedent’s account to make gifts to his wife and mother. The power of attorney document stated that decedent’s agent had the right “to make gifts, including gifts to my agent.” According to objector, this did not authorize unlimited gifts and because decedent was a widow with no children, no person fell within the category of permissible donees. Therefore, objector asserted that respondent could not make gifts to anyone other than himself. The court disagreed with objector’s analysis. Instead, the court found the language was indicative of a general unlimited authority to make gifts.
At the hearing, decedent’s attorney testified that she was knowledgeable about financial matters and had operated a family business for years. Respondent testified that decedent asked him to write checks, because she had issues with her hands and was unable to write. The gifts to respondent’s mother were consistent with prior checks to her that decedent had written herself. The record also indicated that respondent’s wife and mother both visited decedent frequently.
Objector claimed that respondent failed to keep accurate financial records of withdrawals and deposits. At the hearing, respondent testified that he could not recall the reason for one $10,000 transfer. However, the court noted that the financial records show a deposit for the identical amount was made back into decedent’s account a few days later. The court concluded the original amount was withdrawn in error, and it declined to impose a surcharge with respect to this transaction. Objector also contended that an adjustment of $1,516.48 to one of decedent’s accounts was improper. However, the court found no evidence of fraud, and it noted that fiduciary agents were not required to act as financial professionals, but rather, they were required to exercise common care, competence and diligence. The court concluded respondent complied with his legal obligations. He kept records covered a seven year period for assets totaling over half a million dollars, so this discrepancy was not enough to show respondent engaged in mismanagement. The court denied objector’s request for a surcharge.
Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 41 PLW 555 Tuesday, June 12, 2018, In re Estate of Tyreman, PICS Case No 18-0678 (C.P. Monroe Jan. 5, 2018)
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