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Power Of Attorney Did Not Authorize Creation Of Trust

October 7, 2015

Authors

Luke Lantta

Power Of Attorney Did Not Authorize Creation Of Trust

October 7, 2015

by: Luke Lantta

Because powers of attorney are often used as an elder care planning tool, they are also often used by the attorney-in-fact to manage the estate planning and finances of the principal.  The creation of a trust can be an important estate planning tool, so, if the principal wants to authorize his or her agent to create a trust, that authorization should be specifically granted in the power of attorney.  Not surprisingly, there is increasing litigation over the scope of power conveyed to an agent through a power of attorney, including litigation regarding the agent’s authority to create a trust for the principal.  In Dishman v. Dougherty, Kentucky was one of the latest states to have an appellate court weigh in.

Setting aside a

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Kentucky Resolves Questions Concerning Trustee’s Fees

October 8, 2013

Authors

Luke Lantta

Kentucky Resolves Questions Concerning Trustee’s Fees

October 8, 2013

by: Luke Lantta

Before 2008, Kentucky Revised Statutes 386.180 mandated that testamentary trustees make a choice of compensation between either an annual fee or a fee at the termination of the trust.  In 2008, the Kentucky General Assembly repealed this statute.  The repeal of the statute, however, left unresolved the question of whether its repeal affected trustee compensation for trusts that were in existence before the repeal of the statute.  In Jarvis v. National City, the Kentucky Supreme Court resolved that question.

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Trustee Was Authorized To Convey – Not Distribute – Property To Estate Of Deceased Trust Beneficiary

March 19, 2013

Authors

Luke Lantta

Trustee Was Authorized To Convey – Not Distribute – Property To Estate Of Deceased Trust Beneficiary

March 19, 2013

by: Luke Lantta

Time to get into the weeds on the scope of a trustee‘s powers.  There are basically two sources of power for a trustee – the trust instrument and state law.  Where those two intersect, overlap, conflict, or diverge is where you will likely find the bulk of fiduciary litigation about trustee powers.

In Rendall v. Black, the Court of Appeals of Kentucky dug into both the trust instrument and Kentucky trust law to reverse a local circuit court’s ruling that declared a 1994 deed void ab initio based upon the language of a trust agreement.  In doing so, the appellate court got to differentiate between the trustee’s power to distribute income versus the trustee’s power to sell off the corpus of the trust.  And we saw a brief – and curious – appearance of the trust pursuit rule.

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The Use Of Expert Witnesses In Breach Of Fiduciary Duty Cases

January 24, 2013

Authors

Luke Lantta

The Use Of Expert Witnesses In Breach Of Fiduciary Duty Cases

January 24, 2013

by: Luke Lantta

The role of experts in breach of fiduciary duty cases is an emerging and unsettled area of law.  Of course there will always be questions about whether an expert is qualified to offer an opinion.  But there are additional quirks when a state codifies the standard of care required of a trustee thereby creating a statutory standard of care.  Does a plaintiff need expert testimony establishing that the trustee breached the statutory standard of care?  Perhaps.  But does that testimony necessarily result in an expert impermissibly testifying on the ultimate issue of liability?  Again, perhaps.

It’s questions like these that cause us to pay close attention when one of the rare ‘expert opinion’ decisions gets issued in a breach of fiduciary duty case.  Just this week in Sierra v. Williamson (2013 WL 228333), the United States District Court for the Western District of Kentucky gave us

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Kentucky Grantor Was Not Unduly Influenced In Conveying Home To ‘Grandson’

October 12, 2011

Authors

Luke Lantta

Kentucky Grantor Was Not Unduly Influenced In Conveying Home To ‘Grandson’

October 12, 2011

by: Luke Lantta

Perception — or perhaps more precisely, misperception — fuels so much fiduciary litigation.  For example, an elderly grantor may have perfectly legitimate reasons for conveying property to someone outside the family.  Even if the grantor’s reasons aren’t good, she is within her rights to make a completely unreasonable transfer so long as nothing afoul is afoot (e.g., lack of capacity, undue influence, fraud, etc.).

But, when a blood relative learns of this transfer, a sense of entitlement kicks in, and we’re on our way to litigation.  The problem for these elderly grantors, who are under so much pressure to explain or change their decision, is that they oftentimes say or do anything to try to make everyone happy.  That never works.  And that was the sort of situation recently before the Kentucky Court of Appeals.

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