While perusing Pennsylvania case law recently (yes, I sometimes do research just for the fun of it), I came across a Superior Court case dealing with an Agent acting inappropriately under a Durable Power of Attorney. Since the facts of the case match the scenarios I often worn my clients about I thought it would be useful to blog about the facts.
The case is Fulton v. Fulton, 2014 Pa. Super 270. The matter ended up in Fayette County Court of Common Pleas because Tillie F. Fulton, daughter-in-law of the decedent, Fern O. Fulton filed a complaint against her brother-in-law, Donald J. Fulton, and other family members. Below are the facts, as stated by the Superior Court in Fulton v. Fulton.
Tillie Fulton had six children, including Donald J. Fulton, and Marvin Fulton, husband of Fern. In July 1999, Tillie, a widower, signed a durable power of attorney naming her son, Donald, her agent under the document. The durable power of attorney granted Donald very broad powers over his mother’s affairs, including asset management, estate planning, medical procedures, admission into medical facilities and other health care decisions.
Well Tillie owned a lot of farmland and while his mother was still alive, Donald began to use the power of attorney to transfer acres of the farmland to himself and his wife, and later to his siblings. Apparently, Tillie found out about her son’s transgression because she filed a lawsuit in 2003 against Donald, in which she sought money for the transfers he made.
Unfortunately, Tillie died 5 years later, before the matter was resolved, which led to Fern Fulton, Administratrix of the estate, filing a complaint on behalf of Tillie’s estate. Fern’s complaint was barred by the doctrine of laches (i.e., where a claim will not be allowed because the delay in bringing the claim will prejudice the other side). Here, there was a delay by eleven years between Donald transferring the land and Fern filing the complaint. Basically, you snooze you loose. Anyway, Fulton v. Fulton is a discussion on the doctrine of laches, and to what extent it applies. I am more concerned with the facts that originally triggered the filing of the complaint.
I cannot stress the importance of appointing a trustworthy person to act as an agent under your durable power of attorney. Here, a parent appointed a child to act as her agent, and that child ended up taking land from his mother. If Tillie wanted her children to have the farmland prior to her death, she could have perhaps gifted the farmland to her children. But, she did not. Therefore, the children would have to wait until her death to receive the farmland. Perhaps, Donald was hoping to avoid death taxes on the farmland, and that is why he conveyed the land. You might be thinking, “No big deal.” But, it is a “big deal”. Remember, when an agent acts under a durable power of attorney, they should act in the best interest of the principal, not in their own best interest.
Lesson #1: Be careful when naming an agent under your durable power of attorney.
Lesson #2: Be careful when granting powers to that agent.Tags: Agents, Durable Power of Attorney