Estates 825Oct

ESTATES: Estate Planning: Gifts by an Attorney-in-Fact

Although most estates now have statutes that address the scope of powers of an agent under a durable or general power of attorney, it is safe to say, as a general proposition, that an agent cannot make a gift of his or her principal’ s property to himself or a third party unless such a power is given to the designated attorney-in-fact in the power-of-attorney instrument. Dingle

v. Prikhdina, 59 So. 3d 326 (Fla. Dist. Ct. App. 2011). Thus, in the absence of specific provision in a power-of-attorney document that authorizes the agent to make gifts of the principal’s assets or property, if the attorney-in-fact makes a gift of the principal’s money or property to himself, herself, or a third party, a court will presume that the gift was improper or constituted an act of prohibited self-dealing, and the agent carries the heavy burden of proving, with clear evidence, that the principal intended to allow him or her to make the gift in question. In re Est. of Curtis, 83 A.D.3d 1182, 923 N.Y.S.2d 734 (2011).

Even if a power-of-attorney instrument authorizes gifts by the attorney-in-fact to third parties, the agent can make only those gifts of the principal’ s money or property that are within the scope of gift-giving powers that are conferred upon the agent by the governing document and are in the best interests of the principal. Goldberg v. Meyers, 181 A.D.3d 653, 121 N.Y.S.3d 1 (2020) (citing, inter alia, N.Y. Gen. Oblig. Law§ 5-1505(2)(a)(2)). In a case where a nephew, acting as attorney-in-fact for his uncle, made gifts of the uncle’s property to other nephews and nieces and also to himself, the court upheld the gifts to the principal’s other niece and nephews but struck the gift by the agent/nephew to himself, because the power-of-attorney document authorized the agent to “make gifts,” but did not permit self-dealing by the agent. Stehlik v.

Rakosnik, 24 Neb. App. 34,881 N.W.2d 1 (2016).

In summary, an attorney-in-fact under a durable or general power of attorney must exercise extreme caution when contemplating a gift of the principal’s money or property to himself, herself, or a third party. The agent must consult state law regarding gifts by attorneys­ in-fact and carefully read the power-of-attorney instrument in order to make sure that the contemplated gift would be upheld by a court in the event of a post-gift challenge to the gratuitous transfer. No matter how strongly the agent under a power of attorney may believe that his or her principal would “want” him or her to make a contemplated gift of the principal’s money or property to a third-party donee or to himself or herself, the law or the governing instrument must authorize the contemplated gift or it will be deemed void by a court.

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