KEEPING CURRENT P R O B AT E CASES POWER OF ATTORNEY: Agent was authorized to sign arbitration agreement. A durable power of attorney authorized the agent to make “personal care decisions” including entering contracts and committing the principal’s resources for the provision of residential care. The document expressly stated that it did not authorize “anyone” to make the principal’s “medical and other health care decisions.” The principal moved to a residential care facility, and the agent signed an agreement to arbitrate disputes with the facility on the principal’s behalf. After allegedly falling and sustaining a broken hip, the principal sued the facility for negligence. The facility filed a petition to compel arbitration, which the trial court denied, concluding that the agent was not authorized to sign the arbitration agreement. The California intermediate appellate court reversed in Gordon v. Atria Management Co., LLC, 285 Cal. Rptr. 3d 787 (Cal. Ct. App. 2021). The court held that, in the absence of evidence that the principal was admitted to the facility to obtain medical care, the arbitration agreement was binding on the principal because the power of attorney granted authority to arbitrate disputes and to arrange for residential care. POWERS OF APPOINTMENT: Testamentary exercise of power may be challenged after time to challenge probate has expired. The testator’s will exercised a broad non-general power of appointment over a family trust by appointing the trustee of the testator’s
Keeping Current—Probate Editor: Prof. Gerry W. Beyer, Texas Tech University School of Law, Lubbock, TX 79409, gwb@ ProfessorBeyer.com. Contributing Authors: Claire G. Hargrove, Paula Moore, Prof. William P. LaPiana, and Jake W. Villanueva.
Keeping Current—Probate offers a look at selected recent cases, tax rulings and regulations, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
revocable trust. The trustee of the family trust refused to transfer the trust assets to the testator’s trust, and the testator’s personal representatives filed a petition for instruction. The taker in default moved for summary judgment, asserting that the exercise was invalid because, under the terms of the testator’s trust, some of the appointive property could be used to pay creditors of the testator’s estate. The trial court granted the personal representatives’ counter-motion for summary judgment because the taker in default had not challenged the will within the statutory time limit. In Tendler v. Johnson, 332 So. 3d 521 (Fla. Dist. Ct. App. 2021), the Florida intermediate appellate court reversed and remanded because the taker in default was not challenging the validity of the will but rather the purported exercise of the power. TRUST AMENDMENT: Option signed by settlor and trustee of a revocable trust is a trust amendment. The settlor reserved the right to revoke or amend the trust by a writing signed by the settlor and accepted by the trustee. While serving as trustee, the settlor executed a document granting an option to buy real property held in the trust for the second of the settlor and the settlor’s spouse to die. The settlor signed as trustee, the optionees signed, and the settlor recorded the option. The original trust terms directed the sale of the real property on termination of the trust
and the distribution of the proceeds to the settlor’s children. The optionees are descendants of the settlor’s spouse. After the settlor’s death, the optionees, the surviving spouse, and remainder beneficiaries litigated the validity of the option. In Borough v. Caldwell, 497 P.3d 1260 (Or. Ct. App. 2021), the intermediate Oregon appellate court held that by executing and recording the option document, the settlor had substantially complied with the method of trust amendment in the trust terms. TRUST BENEFICIARIES: Designation of beneficiaries as “others” too indefinite to create valid trust. The testator’s will gave the residuary estate to the nominated executor “as trustee” in trust to be distributed to the testator’s family “and others” according to the testator’s instructions to the trustee. In Wilson v. Wilson, 181 N.E 3d 417 (Ind. Ct. App. 2021), the Indiana intermediate appellate court held that the trust failed because the identity of the beneficiaries cannot be determined “with reasonable certainty” as required by Ind. Code § 30-4-2.1(c). The use of the word “others” means “different or additional” and includes everyone on earth. In addition, though the statute says that a power of a trustee to select a beneficiary from an indefinite class is valid, the word “others” means that the provision is not applicable. TRUST FUNDING: Testator may exercise testamentary powers of appointment to validly fund an unfunded charitable trust. The testator created a charitable trust but did not fund it during his lifetime. The testator’s will exercised powers of appointment over three separate trusts (one governed by the law of Connecticut, two by the law of Illinois) in favor of the unfunded trust. A default taker challenged the exercise of the powers. In Benjamin v. Corasanti, 267 A.3d 108 (Conn. 2021),
Published in Probate & Property, Volume 36, No 3 © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
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May/June 2022
