Why It’s Important to Understand What Powers are Granted in a Durable Power of Attorney

You have likely seen numerous posts about how important it is to have a durable power of attorney (“POA”) if you are over the age of 18.  But also of importance is to ensure that the POA you have executed is sufficient for the tasks to be performed.  We frequently meet with prospective client’s for elder law needs and learn they have an executed POA, but the powers granted are insufficient for the actions we need to take.   A recent Pennsylania court case is a good reminder of why we scrutinize pre-existing powers of attorney as to the powers created:  A majority of the time we seek to obtain a broader, more comprehensive POA than the one currently in place.

A Pennsylvania appeals court rules that an agent under a power of attorney did not have authority to create a Medicaid trust and transfer her mother’s property to the trust because the power of attorney allowed her to transfer property only to a trust that was created before the power of attorney was signed. In Re: Sellers (Pa. Super. Ct., No. 329 EDA 2017, Sept. 19, 2017).

Eva Sellers named her daughter, Elizabeth Fischer, as agent under a power of attorney. With regard to estate and trust transactions, the power of attorney granted Ms. Fischer the ability to transfer property to a living trust that she created before the power of attorney was signed. Ms. Sellers entered a nursing home and Ms. Fischer and her brothers consulted an elder law attorney who recommended creating an irrevocable income-only trust. Ms. Fischer created the trust and transferred Ms. Sellers’ property to the trust.

Ms. Sellers died and one of her sons died soon after her. Her son’s estate filed a claim against Ms. Fischer, arguing that she did not have authority under the power of attorney to transfer the property to the trust. The trial court granted summary judgment to the estate, and Ms. Fischer appealed. She argued that the terms of the power of attorney were ambiguous and her two brothers agreed with the transfer at the time.

The Pennsylvania Superior Court affirms, holding that under the plain language of the power of attorney, Ms. Fischer did not have authority to transfer property to a trust that was not already in existence before the power of attorney was signed.

This article is written by an attorney at Wyatt & Mirabella, PC. Always consult an attorney before making any legal decisions. To make an appointment today for a free consultation, please click here to contact us.