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Power of Attorney

The Philadelphia Orphans Court in the Estate of Gloria Capobianco , 8 Fiduc. 3rd pages 201-206 (O.C. Philadelphia Co.July 2018) cited numerous sections under Chapter 56 under Title 20 of the Pennsylvania Statutes, and held that the trust as created by the agent under a power of attorney is invalid.

Gloria Capobianco died intestate on June 3, 2016. On November 1, 2005, she named her son as agent under her power of attorney. On April 24, 2016, she had to be placed in a medically-induced coma. On May 27, 2016, the agent, her son, under the power of attorney, created a trust and named himself and only two of his six siblings as beneficiaries of the trust, and transferred the decedent’s home and tangible personal property to the trust. The agent stated in court filings that he transferred the assets to the trust to protect such assets from being counted for the purposes of Medicaid.
One of the siblings that was not named as an heir of the trust objected to the accounting.

The Court stated that as a result of the decedent dying intestate all of her children were heirs equally of the estate in accordance with the Pennsylvania intestate law. The Court cited 5601.3 which provides that an agent is required to act according to the principal’s reasonable expectations, the agent must act in good faith, and only within the scope of the authority granted by the power of attorney. Furthermore, the agent must act loyally for the principal’s benefit.

The Court stated that an agent has a fiduciary duty to attempt to preserve the principal’s estate plan under 5601.3(b)(6), and the agent, in the case before the Court, did not have the authority to deviate from the principal’s estate plan.

The Court decided that there was no purpose in creating the trust except to eliminate four heirs as beneficiaries, and therefore the Court sustained the objections to the accounting and held that the trust is invalid.

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