There has been an increasing amount of litigation about the scope of power that is conveyed to an agent through a power of attorney. An appellate court in Kentucky has recently weighed into this power of attorney issue in Dishman v. Dougherty. One of the main things to take away from the Kentucky Court opinion is that a power of attorney did not authorize the attorney-in-fact to create a trust. In order for an attorney-in-fact to create a trust that authority must be expressly authorized in the power of attorney instrument if it contains a provision related to trusts. In this specific case the power of attorney only permitted the attorney-in-fact to convey property into a trust, it did not permit him to create a trust. Estate planners should be familiar with the local rules and regulations dealing with powers of attorney.
See Luke Lantta, Power Of Attorney Did Not Authorize Creation Of Trust, Bryan Cave Fiduciary Litigation, October 7, 2015.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
