In re Goetz
OPINION OF THE COURT
The Goetz family trust was created on May 11, 1995 as part of the family’s estatе 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 befоre 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, Vеrena, 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
Verena’s will was admitted to probate after this court granted summary judgment dismissing the petitioner’s objections, which included a protest of the seсond 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 carеful 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 thеir 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 аmended 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,
New York Estates, Powers and Trusts Law § 7-1.16 provides that a lifetime trust is irrevocable, unless it expressly provides
The scope of the authority to revoke or amend а 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 lаw (see Matter of Farley,
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 Trusteеs 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. Rеgardless of Robert’s intentions, whatever they may have been, he did not fully comply
The respondent аrgues that the power of attorney did, indeed, include the authority to make trust amendments. The statutes concerning powers of attorney are found in General Obligations Law § 5-1501 et seq. The respondent points to General Obligations Law §§ 5-1502A, 5-1502B and 5-1502C, which set fоrth the attorney-in-fact’s authority in relation to transactions involving real estate, chattels and goods, and bonds and shares, respectively. Each of these sections contains a subsection granting the authority to execute and deliver a modification of a trust, mortgage or other instrument “which the agent may think useful for the accomplishment of any of the purposes enumerated in this section” (General Obligations Law § 5-1502A [9]). Sections 5-1502B and 5-1502C contain the same language quoted from section 5-1502A (9), and the respondent asserts that they form the basis of a broad grant of authority in relation to trusts. In particular, the respondent contends that the trust principal is real estate, so that the provisions of General Obligаtions Law § 5-1502A (2), together with General Obligations Law §§ 5-1502B (2) and 5-1502C (2), grant Verena the authority to amend the trust, as Robert intended.
In general, General Obligations Law § 5-1502A refers to the purchase, sale, management, assignment or other acts necessary for dealing with real property, granting the agent the authority to do any act which the principal can do through an agent, with respect to any estate or interest in land (General Obligations Law § 5-1502A [12]). The transaction here does not conсern the disposition of an interest in land. Instead, it concerns the designation of persons entitled to take the residue of a trust. Additionally, it must be noted that the section of the General Obligations Law dealing with estate transactions (General Obligations Law § 5-1502G) does not contain language concerning trust amendments, nor does the General Obligations Law contain a section conferring upon agents authority over trust transactions in general.
A grantor’s power of revocation has, historically, been deemed a personal right, terminating upon death, which cannot be exercised by an executor or legatee who is not granted that right in the trust (Culver v Title Guar. & Trust Co.,
Further, revocable inter vivos trusts are commonly employed аs estate planning tools and are coordinated with the grantor’s will, functioning in much the same manner as a will (see Matter of Tisdale,
Most substantially, the instruments at issue here do not contain the terms and grants of authority whiсh the respondents seek to read into them. Instruments must be construed as written, by their own terms, and courts may not add to or alter their provisions in the guise of interpreting them, nor interpolate into them broad grants of authority not included by the partiеs (Mercury Bay Boating Club v San Diego Yacht Club,
The petitioner has not cited any New York law or precedent which supports the proposition that an agent may use a power of attorney to modify a trust instrument which does not explicitly authorize that method of amendment. Other states have found attempted amendments not expressly authorized in the trust document or the power of attorney itself to be void and ineffective (Cal Prob Code § 15401 [c]; Tenn Code Ann § 35-15-602; see also Williams v Springfield Mar. Bank, 131 Ill App 3d 417, 419,
Accordingly, the motion for summary judgment is granted, and the petition is granted in its entirety. The second amendment to the Goetz Family Trust is declared to be void and of no effect, and the attempted exercise by Verena Goetz in her last will and testament of the power of appointment is likewise void and ineffective.