Pennsylvania Law Only Permits Agents to Make Unlimited Gifts if Specifically Authorized by the Power of Attorney
In the appellate estate administration and estate litigation case of In Re Estate of Moskowitz, PICS Case No. 15-0195 (Pa. Super. Feb. 4, 2015) the Honorable Susan Peikes Gantman, writing on behalf of the Pennsylvania Superior Court, ruled that an estate action to recover assets of decedent was not barred by the statute of limitations or the doctrine of laches where the relief sought was equitable in nature. Partial summary judgment affirmed.Pennsylvania Law Only Permits Agents to Make Unlimited Gifts.
Appellants Michael and Bernice Fein appealed from the decree entered in the orphans’ court, granting partial summary judgment in favor of appellee Estate of Leonard J. Moskowitz, deceased. In 2000, decedent executed a New Jersey POA naming appellant Mr. Fein as his agent. Mr. Fein was the son of appellant Ms. Fein, the longtime companion of decedent. In 2007, decedent executed a will naming Ms. Fein and Joshua Taylor as co-executors.
However, prior to decedent’s death in 2009, Mr. Fein conducted a series of transactions transferring securities belonging to decedent to joint accounts between decedent and Ms. Fein, then transferred the securities to a joint account owned only by Ms. and Mr. Fein. Mr. Fein also conveyed a property owned solely by descendent to decedent and Ms. Fein as tenants by the entirety.
After decedent’s death, Mr. Taylor filed a petition seeking appointment as sole executor of the estate, alleging that Mr. Fein unlawfully retitled decedent’s solely owned assets to accounts held by decedent and Ms. Fein, who therefore had a conflict of interest. Ms. Fein raised the issued of decedent’s domicile in a new matter.
Mr. Taylor and Ms. Fein renounced their rights to administer the estate in favor of a neutral administrator, and the orphan’s court appointed Stephen Carroll as administrator. Appellee estate filed a petition to compel Mr. Fein to file an accounting of his actions as agent for decedent. After the court compelled a full and complete accounting from Mr. Fein, appellee filed a petition for the return of the transferred assets, which was granted by the orphans’ court in a partial summary judgment in 2013.
On appeal, appellants argued that appellee’s petition to recover assets was barred by the two-year statute of limitations for recovery of retitled assets. The court noted that the stature of limitations began to run as soon as the right to institute and maintain suit arose. The court further noted that the filing of the action could only be accomplished with the consent of both executors. Because Ms. Fein, as co-executor, objected to and delayed the bringing of an action to recover decedent’s assets, the estate’s ability to bring an action to recover assets did not occur until Mr. Carroll was appointed sole administrator. Mr. Carroll brought suit well within the statute of limitations. The court further held that appellants also were not entitled to the doctrine of laches defense because they had notice of appellee’s claim and were themselves responsible for the delay in bringing the claim.
The court further ruled that Mr. Fein lacked authority under the POA to make the transfers he did as inter vivos gifts. Although appellants argued that the POA was made in New Jersey, whose law permitted agents to make gifts, the court held that an out-of –state agent only had authority under the out-of-state POA to the extent that it did not conflict with Pennsylvania law. Because Pennsylvania law only permitted agents to make unlimited gifts if specifically authorized by the POA and decedent’s POA did not do so, Mr. Fein had insufficient authority to make the transfers.
Finally, the court ruled that it lacked jurisdiction to hear Ms. Fein’s appeal of the orphans’ court’s denial of her petition for discovery in her action to remove Mr. Carroll as administrator, noting that it was not an appeal from a final order.
Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 38 PLW 157 (February 17, 2015)
Filed Under: Trusts & Estates; Power of Attorney; Inter Vivos Transfers; Unlimited Gifts; Statute of Limitations
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