Power of Attorney and Attorney-in-Fact Liability

Power of attorney instruments for finances are common estate planning tools. The parties to a power of attorney are the principal and attorney-in-fact. The principal designates and nominates the attorney-in-fact to engage in specified and authorized activities on the principal’s behalf. The attorney-in-fact is a fiduciary and must act in the principal’s interests.

The relationship between a principal and attorney-in-fact is an agency relationship. § 404.703(1), RSMo. An attorney-in-fact may take actions which would otherwise constitute a breach of fiduciary duty if expressly authorized by the power of attorney instrument.  § 404.710.6(1)-(12), RSMo. This includes, without limitation, the making of gifts, changing of survivorship interests, and the changing of beneficiary designations. Id. An attorney-in-fact can have implied authority to act, even in the context of § 404.710.6. Ingram v. Brook Chateau, 586 S.W. 3d. 772, 775 (Mo. 2019).  If a power of attorney authorizes the attorney-in-fact to engage in “self-dealing,” there is no breach. Antrim v. Wolken, 228 S.W.3d 50, 54 (Mo. Ct. App. 2007). Likewise, there is no breach for self-gifting if it is expressly authorized. Randall v. Randall, 497 S.W.3d 850, 855 (Mo. Ct. App. 2016).

In contrast, § 404.710.7 enumerates four types things an attorney-in-fact may not do even when authorized by the power of attorney: (1) make, publish, amend or revoke a will for the principal; (2) make, execute, modify or revoke a living will for the principal; (3) to require the principal, against the principal’s will, to take any action or to refrain from taking any action; or (4) to carry out any actions specifically forbidden by the principal while not under any disability or incapacity.

To the extent litigation ever arises relating to a power of attorney — and an attorney-in-fact’s actions — it is extremely important to review the actual power of attorney instrument.

Related Articles

Will Contests, Self-Proving Wills

March 30, 2023

Will contests are unique for several reasons. Perhaps most significantly, the burden is on the proponent of the document to prove the will was executed and that the testator possessed the requisite capacity. Many times the “proponent” of the will is the defendant in the lawsuit. So, the will contest instructions contemplate the defendant presenting…

Read More

Trustee Abuse of Discretion Factors

October 30, 2022

Increasingly, trust instruments grant trustees “discretion” to do certain acts. Drafters include this language to account for unanticipated circumstances and make a trustee’s life easier. But even where a trustee has discretion, they can act improperly. “A grant of absolute discretion to a trustee is not a roving commission – the trustee must be guided…

Read More

Probate Exception to Federal Jurisdiction

September 9, 2022

There are two main ways for a lawsuit to end up in federal court. First, if the lawsuit “arises under” federal law. This is sometimes called federal question jurisdiction. Second, if there is diversity jurisdiction. There are, in turn, two main requirements for diversity jurisdiction: the amount in controversy must exceed $75,000 and all of…

Read More

Trust Language: “Necessary or Advisable” Distributions

March 4, 2022

The language of a trust is extremely important. And when a will, trust, and other estate documents form part of the same plan, they are interpreted together. Indeed, “[w]hen a trust and will form parts of the same plan, they must be construed together.” Shriners Hospital for Children v. Schaper, 215 S.W.3d 185, 189-90 (Mo….

Read More
Scroll to Top