PEROSI v. LiGRECI
98 A.D.3d 230 (2012)
Appellate Division of the Supreme Court of New York, Second Department.
Decided July 11, 2012.
In support of his contention that the attorney-in-fact had no authority to amend the Trust, the trustee relies upon decisions made by courts of nisi prius, including Matter of Chiaro (28 Misc.3d 690 ) and Matter of Goetz (8 Misc.3d 200 ). As discussed below, that reliance is misplaced. Matter of Chiaro involved a Mental Hygiene Law article 81 proceeding where a revocable trust was at issue. As pertinent here, the trust in Chiaro provided that it could be amended by both grantors, unless one of those grantors was found to be incapacitated or incompetent (see Matter of Chiaro, 28 Misc 3d at 697). After one of the grantors was deemed incapacitated and a
guardian was appointed for her, the other grantor died. The Supreme Court determined that the surviving grantor's guardian could not amend the trust because, once that grantor was found to be incapacitated, the trust dictated that her guardian had no power to amend. Chiaro is distinguishable because, among other reasons, the trust therein was revocable since it contained a specific provision for amendment. As the trust was revocable, EPTL 7-1.9 was inapplicable until the revocation provisions were complied with (see Matter of Dodge, 25 NY2d at 285).
In Matter of Goetz, the trust at issue provided that the creator reserved the right to revoke or amend the trust to himself (see Matter of Goetz, 8 Misc 3d at 201). Evidence was adduced indicating that the creator had intended to amend the trust, but the creator's amendment was not properly executed. On the following day, the creator's attorney-in-fact executed the amendment of the trust on the creator's behalf. The Surrogate's Court determined that the attorney-in-fact could not amend the trust because the General Obligations Law did not contain language concerning trust amendments, and the statute did not contain "a section conferring upon agents authority over trust transactions in general" (id. at 204). The Surrogate's Court in Goetz stated that "[a] grantor's power of revocation has, historically, been deemed a personal right ... which cannot be exercised by an executor or legatee who is not granted that right in the trust" (id.). In support of its conclusion, the Surrogate's Court relied upon Culver v Title Guar. & Trust Co. (296 N.Y. 74 ). However, Culver merely stands for the proposition that, after one of several trust creators has died, the surviving creators are not authorized to revoke or amend the trust. Moreover, unlike the matter sub judice, the Goetz trust specifically reserved the right to amend or revoke the trust to the creator. Thus, we do not find the Goetz decision persuasive.
In sum, the trustee, who asserts that the conduct of the attorney-in-fact exceeded the scope of her mandate, failed to demonstrate that the amendment of the Trust was prohibited.
In the order appealed from, the Supreme Court noted that the attorney-in-fact attempted to oust the trustee "at the very end" of the creator's life (Perosi v LiGreci, 31 Misc 3d at 599). The record is bereft of any allegation that the creator was incapacitated at the time of the amendment. Nevertheless, during a principal's life:
"[S]ubsequent incapacity of a principal shall not revoke or terminate the authority of an agent who
acts under a durable power of attorney. All acts done during any period of the principal's incapacity by an agent pursuant to a durable power of attorney shall have the same effect and inure to the benefit of and bind a principal" (General Obligations Law § 5-1501A ).
Consequently, because the creator was alive and had not revoked the power of attorney at the time the amendment was executed, the actions of the attorney-in-fact were within the bounds of her authority.