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PEROSI v. LiGRECI
98 A.D.3d 230 (2012)
Appellate Division of the Supreme Court of New York, Second Department.
Decided July 11, 2012.
Further, the statute permits an attorney-in-fact "to participate in and to oppose any proceeding, judicial or otherwise, for the removal, substitution or surcharge of a fiduciary" (General Obligations Law § 5-1502G [4]). Notably, a trustee is a fiduciary (see EPTL 1-2.7; Matter of Mankin, 88 A.D.3d 717, 718 [2011]). Section 5-1502G (10) also grants an attorney-in-fact the power "to do any other act or acts, which the principal can do through an agent, with respect to ... the administration of a trust or other fund, in any one of which the principal has, or claims to have, an interest" (see EPTL 13-2.3 [providing that a beneficiary may authorize an agent to act on behalf of his or her interest in a decedent's estate if such authorization is in writing, acknowledged like a deed, and recorded in the Surrogate's Court]; Matter of Murray, 14 Misc.3d 591 [2006] [holding that General Obligations Law § 5-1502G authorizes an attorney-in-fact, acting pursuant to a durable power of attorney, to execute a waiver and consent to probate of a decedent's will]). The authority granted to an attorney-in-fact over "all other matters" is governed by General Obligations Law § 5-1502N, entitled "Construction — all other matters." That statute provides that "[i]n a statutory short form power of attorney, the language conferring general authority with respect
to `all other matters' must be construed to mean that the principal authorizes the agent to act as an alter ego of the principal with respect to any and all possible matters and affairs which are not enumerated in sections 5-1502A to 5-1502M, inclusive, of this title, and which the principal can do through an agent" (General Obligations Law § 5-1502N). Reading the subject power of attorney together with General Obligations Law §§ 5-1502G and 5-1502N, the authority granted to the attorney-in-fact with respect to "estate transactions" and "all other matters" is limited to those acts which a principal can do through an agent. Thus, contrary to the petitioners' contention, neither the power of attorney nor article 15 of the General Obligations Law specifically authorizes the attorney-in-fact to amend the Trust. However, this does not end our inquiry. "An attorney in fact is essentially an alter ego of the principal and is authorized to act with respect to any and all matters on behalf of the principal with the exception of those acts which, by their nature, by public policy, or by contract require personal performance" (Zaubler v Picone, 100 A.D.2d 620, 621 [1984]; see Matter of Arens v Shainswit, 37 A.D.2d 274, 279 [1971] [finding that attorney-in-fact was authorized to consent for his principal to be substituted as a candidate for elected judicial office], affd 29 N.Y.2d 663 [1971]; Matter of Lando, 11 Misc.3d 866 [2006] [holding that the General Obligations Law clearly provides that an attorney-in-fact can exercise the right of election pursuant to EPTL 5-1.1-A on behalf of a principal, a right that is personal to a surviving spouse]; see also EPTL 13-2.3).3 Generally, the scope of a power of attorney is limited only by the boundaries of the principal-agent relationship (see Cymbol v Cymbol, 122 A.D.2d 771, 772 [1986] [an attorney-in-fact may only act to the extent that his principal is permitted by law to act through an agent]). There are a few exceptions to the powers which can be granted to an attorney-in-fact. These exceptions include, but are not limited to: the execution of a principal's will (see EPTL 3-2.1 [a] [3]); the execution of a principal's affidavit upon personal knowledge (see Cymbol v
Cymbol, 122 A.D.2d 771 [1986]); or the entrance into a principal's marriage or divorce (see Mallory v Mallory, 113 Misc.2d 912 [1982]). Absent any special circumstances or contrary directives, the amendment of the Trust by the attorney-in-fact, with the consent of all the beneficiaries, was not an act which "by [its] nature, by public policy, or by contract," required the creator's personal performance (Zaubler v Picone, 100 AD2d at 621). Indeed, while the legislature has determined that an agent cannot execute a principal's will (see EPTL 3-2.1 [a] [3]), there is no such legislative enactment which precludes an agent from amending a principal's trust. We disagree with the Supreme Court's determination that the creator, acting through the attorney-in-fact, was not permitted to amend the Trust absent a specific delegation of that power in the trust instrument or in the power of attorney. Rather, we hold that since the Trust did not prohibit the creator from amending the Trust by way of his attorney-in-fact, the attorney-in-fact, as the alter ego of the creator, properly amended the Trust. We are cognizant of the contention that there are sound policy considerations for prohibiting an attorney-in-fact from amending or revoking an irrevocable trust, based upon the premise that a creator knows what is best for his or her trust and overall estate plan. However, if there is to be a presumption that a creator cannot act through his or her agent in amending or revoking a trust, such a policy is for the legislature to enact, not the courts. We note that in this case, the creator and the attorney-in-fact were, by definition, in a fiduciary relationship (see General Obligations Law § 5-1501 [2] [a]), and that the power of attorney was given with the intent that the attorney-in-fact would utilize that power for the benefit of the creator (see Matter of Ferrara, 7 NY3d at 254; Mantella v Mantella, 268 A.D.2d 852 [2000]).
1. Notably, pursuant to EPTL 7-2.6, any person interested in a trust can move to remove or suspend a trustee on the ground, inter alia, that the trustee violated his or her trust or threatened to violate it. In this matter, there is no claim that the trustee violated his fiduciary responsibilities.
2. Pursuant to EPTL 7-1.16, a creator of a revocable lifetime trust can amend such a trust by way of a specific reference in his or her will. Additionally, EPTL 7-1.17 permits a trust creator (or someone designated by a creator) to amend or revoke a revocable trust.
3. "Because `[t]he relationship of an attorney-in-fact to his principal is that of agent and principal ..., the attorney-in-fact must act in the utmost good faith and undivided loyalty toward the principal, and must act in accordance with the highest principles of morality, fidelity, loyalty and fair dealing'" (Matter of Ferrara, 7 N.Y.3d 244, 254 [2006], quoting Semmler v Naples, 166 A.D.2d 751, 752 [1990]). In addition, EPTL 2-1.11 (d) (6) permits an attorney-in-fact to renounce a disposition on behalf of a principal, with court approval.
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