Thursday, August 22, 2013
An agent under a durable power of attorney closed the principal’s bank accounts and opened new accounts in name of the agent, the co-agent, and the principal as joint tenants with rights of survivorship. The power of attorney authorized the agent to make gifts to herself in the amount of the gift tax annual exclusion. After the principal’s death, one of the agents withdrew the funds. The principal’s siblings began an action to recover the funds from the agent and her husband and received a summary judgment against both parties.
In re Estate of Lambur, 397 S.W.3d 54 (Mo. Ct. App. 2013), the intermediate appellate court held that an agent opening a joint account with principal deemed to violate fiduciary duty. The court affirmed with respect to the agent for all sums in excess of the annual exclusion, reiterating established Missouri law that opening the joint account with rights of survivorship was a gift to the agent, that any authority given an agent to make gifts must be in writing, and that powers of attorney are strictly construed. The court reversed as to the agent’s husband, finding that there were issues of fact as to whether he benefited from the funds.
Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.