A Financial Durable Power Of Attorney Ends Up In Court – Does The Result Surprise You?

A Financial Durable Power of Attorney Ends Up in Court – Does the Result Surprise You?

This year’s newsletters have concentrated on financial Durable Powers of Attorney. Many think they understand these legal documents and the duties involved, but lawsuits brought to Missouri Courts suggest otherwise.

Take the case of Minter v. Minter, a decision by the Missouri Court of Appeals in 2017. The facts were as follows: Mom’s Durable Power of Attorney (DPOA) named Daughter as her attorney in fact (agent). The DPOA did not contain a provision allowing the attorney in fact to make gifts of Mom’s property. After Mom’s death, Son discovered one of Mom’s CDs no longer existed and filed a lawsuit against Daughter, claiming she had breached her fiduciary duties by making a gift to herself of their mother’s property.

Daughter admitted she used the DPOA to cash the CD and place the money into an account in the Daughter’s name but said this was for the purpose of paying Mom’s bills. Daughter claimed she was following Mom’s explicit oral instructions to make those transactions and argued as Mom’s attorney in fact, she was required by Missouri statutes to do what the principal, Mom, directed. Daughter further presented testimony of Mom’s niece and sister-in-law, both of whom testified that they heard Mom tell Daughter to cash in the CDs and put them in an account with the Daughter’s name on it so she would have access to the funds.

The Court said Mom’s oral instructions did not matter. To quote their language: “Our courts have consistently held that an attorney in fact may make gifts to herself only if such gifts are expressly authorized in the DPOA.” In other words, since Mom’s DPOA did not give this power or authority to Daughter, case closed. 

If you accept that Mom did indeed tell Daughter to transfer the money and set up the account, does this result surprise you? If you’ve been a careful reader of this year’s series of newsletters on financial Durable Powers of Attorney, it shouldn’t. Mom should have discussed with her lawyer what powers to put in her power of attorney document; perhaps she would have specifically allowed gifting by her attorney in fact. Daughter should have carefully read Mom’s DPOA and considered whether it allowed her to do what Mom said. All these points have been reviewed in earlier newsletters.