In re Goetz

8 Misc. 3d 200
CourtNew York Surrogate's Court
DecidedMarch 31, 2005
StatusPublished
Cited by10 cases

This text of 8 Misc. 3d 200 (In re Goetz) is published on Counsel Stack Legal Research, covering New York Surrogate's Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Goetz, 8 Misc. 3d 200 (N.Y. Super. Ct. 2005).

Opinion

OPINION OF THE COURT

Anthony A. Scarpino, Jr., S.

[201]*201Stephen Goetz, the petitioner in this proceeding to set aside a limited power of appointment, now moves for summary judgment, contending that an attorney-in-fact may not use that authority to amend a trust created by another person and confer upon herself a limited power of appointment over the trust remainder. Sylvia Perle (respondent) is the successor executor of the estate of the late Robert Goetz and the executor of the estate of Verena Goetz. She opposes the petitioner’s motion, contending that both the creation and exercise of the power were lawful.

The Goetz family trust was created on May 11, 1995 as part of the family’s estate planning by Robert, Verena’s husband and the father of both the petitioner and the respondent. Article eleventh of the trust provides that the grantor reserves to himself the right to revoke or amend the terms of the trust during his lifetime. On March 9, 1995, Robert executed a statutory short-form durable power of attorney in Verena’s favor, granting her the full authority included in the form at that time. Robert executed a first amendment to the trust on August 31, 2000, making an adjustment in a gift to Sylvia.

In December 2000, Verena and Robert became concerned that a California real estate transaction between the petitioner and his father was not entirely fair to his parents. Robert had become very ill and it was clear that he would pass away before they could complete their investigation of the transaction. Their long-time estate attorney testified at a deposition that he visited them at home to discuss their estate plans and it was decided that, rather than Robert taking decisive action before the investigation was completed, Robert would revoke the trust provision dividing the residue equally among their children, and instead grant Verena a limited testamentary power of appointment so that she could adjust the bequests as appropriate among the four children. To that end, a second amendment to the trust was prepared for Robert’s signature.

On December 11, 2000, one of the lawyers who prepared the amendment took it to the Goetz home but, although Robert signed the document, the attorney did not notarize his signature. She testified that she no longer recalled why not, speculating that perhaps she had doubts as to his competence. The following day, Verena, as Robert’s attorney-in-fact, signed the second amendment. Robert passed away on December 15, 2000. Verena herself passed away on February 1, 2002, leaving a last will and testament dated August 23, 2001, which expressly disinherited [202]*202the petitioner and exercised the power of appointment in favor of her other three children.

Verena’s will was admitted to probate after this court granted summary judgment dismissing the petitioner’s objections, which included a protest of the second amendment to the trust. The court declined to address the effectiveness of the power of appointment in the context of the probate proceeding, requiring instead that this miscellaneous proceeding be commenced.

The petitioner contends that, as a matter of law, Verena’s attempted amendment of the inter vivos trust under the power of attorney was invalid because Verena used it to make a gift to herself, did not have the authority to amend or revoke the trust, and exceeded the authority granted her under the power of attorney.

The respondent points out that the trust, the power of attorney and Robert’s and Verena’s wills were the products of careful planning, representing a coherent, coordinated testamentary scheme for both of them. Verena was a trustee of the Goetz family trust, as well as its income beneficiary, had fully participated in all of their financial decisions, and had held her husband’s power of attorney since 1995. Respondent argues that Robert had made the gift of the remainder interest to his four children in the body of the trust, and the second amendment alters that disposition only to the extent of giving Verena the authority to designate which children would share in the gift, rather than conferring a gift upon Verena herself. The respondent contends that the amendment was signed by Verena due to Robert’s failing physical condition, but was consistent with their plan and Robert’s expressed wishes.

The parties have agreed that the issue presented here is one of law, rather than fact, as the facts are not in issue. The question of law presented here is whether an inter vivos trust may be amended by the use of a power of attorney when neither instrument explicitly authorizes such amendments.

An attorney-in-fact may act for her principal in all matters which do not require that the principal act for himself (Zaubler v Picone, 100 AD2d 620, 621 [1984]), to the extent permitted by law and the terms of the power of attorney (see General Obligations Law §§ 5-1502A — 5-15020; Cymbol v Cymbol, 122 AD2d 771, 772 [1986]; Mallory v Mallory, 113 Misc 2d 912 [1982]).

New York Estates, Powers and Trusts Law § 7-1.16 provides that a lifetime trust is irrevocable, unless it expressly provides [203]*203that it is revocable, and if it is, the trust may be revoked or amended in the creator’s will, or by the method set forth in EPTL 7-1.17 (b). That section provides, inter alia, that any amendment or revocation authorized by a trust must be in writing and executed by a person authorized to amend or revoke the trust. The statute clearly presumes that a grantor may reserve to himself, or grant to another person, the authority to revoke or amend an inter vivos trust (see Turano, Practice Commentaries, McKinney’s Cons Laws of NY, Book 17B, EPTL 7-1.17, at 335).

The scope of the authority to revoke or amend a trust is, therefore, defined by the terms of the trust indenture and New York law, just as the scope of authority granted under a power of attorney is governed by the terms of the power of attorney itself, and, of course, the applicable law (see Matter of Farley, 186 Misc 2d 355, 356 [2000]; Cymbol v Cymbol, 122 AD2d at 772; Zaubler v Picone, 100 AD2d at 621).

Article eleventh of the trust sets forth the method for amending or revoking it. It provides:

“The GRANTOR hereby reserves the continuing right and power, by instrument (other than a Will or Codicil thereto) executed and acknowledged by the GRANTOR and delivered to the Trustees during the GRANTOR’S lifetime, to revoke this Trust Agreement in whole or in part, or to alter or amend any terms or provisions thereof in any way except that the GRANTOR shall have no power to increase the duties or obligations of the Trustees without their written consent.”

This provision clearly reserves the power to amend or revoke to the grantor, and conforms to New York law (see EPTL 7-1.16, 7-1.17). However, it does not explicitly confer the same authority upon the grantor’s agent, or upon any other person. The petitioner argues that EPTL 7-1.17 (b) requires that, if an agent or other person is to be granted the authority to amend a trust, the indenture must so specify, and article eleventh does not do so.

It is not disputed that Robert himself retained the authority to amend the trust, and, had the second amendment been notarized, it would have been effective. However, for reasons which remain unclear, Robert’s signature was not acknowledged as required by article eleventh.

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Bluebook (online)
8 Misc. 3d 200, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-goetz-nysurct-2005.