December 12, 2013
Authored by: Luke Lantta
When a person names a friend or relative as a fiduciary in one instrument, it should come as no surprise if that person also names the same friend or relative as a fiduciary in another instrument. Thus, the same person may be named executor, trustee, and attorney-in-fact.
Since we know that an executor is expected to marshal estate assets, we know that an executor may be called upon to investigate pre-death transactions to determine whether the assets that were the subject of those transactions should really be part of the estate. Sometimes that requires a lawsuit to recover those assets. So, what happens when one person, acting under a power of attorney, engages in a transaction that estate beneficiaries claim was improper? If the attorney-in-fact is also the executor, how can that person be called upon to investigate him or herself? In In re: the Estate of Maria Louisa Coutermarsh, the Georgia Supreme Court considered a probate court‘s resolution of that issue.
Bonnie Auger was executrix of the estate of Maria Louisa Coutermarsh. The person named as the successor executrix under Coutermarsh’s will filed a petition to remove Auger as executrix and to have herself appointed as successor executrix. The successor executrix alleged that there was evidence that Auger had mismanaged and misappropriated the decedent’s property as part of a real estate transaction that occurred before the decedent’s death when Auger held a durable power of attorney to act on behalf of the decedent.
Before the decedent’s death, Auger used the decedent’s money to purchase a house and had the closing attorney prepare a deed conveying the property to the decedent and Auger as joint tenants with rights of survivorship. There was some evidence that the decedent was suffering from mental deficits at the time of the closing, and the decedent never met or spoke with the closing attorney. There was also evidence that Auger prepared a real estate purchase agreement, both on behalf of herself individually and acting on the decedent’s behalf, that would have transferred the decedent’s interest in the house to Auger before her death for less than 50% of the purchase price of the house.
In light of this evidence, the probate court determined that Auger’s “apparent self-dealing” might have amounted to a breach of fiduciary duty under the power of attorney and necessitated further investigation by the executor of the decedent’s estate. Because Auger could not be expected to investigate herself, the probate court determined that Auger had a conflict of interest with the estate that justified her removal. Because no transcript of the hearing on the removal petition was filed for inclusion on appeal, the appellate court presumed that the probate court’s ruling was correct.