2008 WL 7810419 (Vt. Super.), 992 A.2d 316 (Vt. 2010)
Louis H. Kurrelmeyer, Sr., died in 2001.1 He was survived by his second wife, Martina Kurrelmeyer, and by three children from his first marriage, including his son, Louis Kurrelmeyer, Jr.2 Son brings this appeal from a December 2008 decision in which the Chittenden Superior Court upheld the conveyance by wife of the Clearwater property from the estate into a trust.3 The property at issue is decedent’s home in Shelburne, which has been estimated to be worth over $500,000.4
In 1980, decedent executed a last will and testament.5 Under the will, wife received a life estate in the Clearwater property, with decedent’s surviving children taking ownership as joint tenants after wife’s death.6 In 1995, decedent had a major stroke.7 Soon afterward, decedent and wife began meeting with an estate planning attorney.8 The trial court found that these discussions were aimed primarily at providing greater financial support for wife than decedent’s will provided.9
In 1996, at the suggestion of the estate planning attorney, decedent executed two durable general powers of attorney.10 One appointed wife.11 The other appointed one of his daughters from his first marriage, Nancy.12 Decedent was competent at the time he executed these powers of attorney.13 By the year 2000, decedent was no longer competent.14
In 2000, following the advice of the estate planning attorney, wife used her power of attorney to establish a living trust.15 Wife and Nancy were listed as co-trustees.16 Wife then transferred the Clearwater property and other real estate owned by decedent into the trust.17 By 2001, when decedent died and his estate went into probate, the Clearwater property was included in the trust.18 The property was therefore not considered part of the estate.19
In Kurrelmeyer I, son challenged the creation of the trust.20 The trial court granted summary judgment to decedent’s children.21 We reversed and held that the power of attorney authorized wife to create a revocable trust.22 Our ruling addressed only the creation of the trust.23 We did not address whether wife could transfer the Clearwater property into the trust.24 On remand, the trial court held a hearing.25 The trial court allowed wife to present evidence that the transfer carried out the intent of decedent.26 The evidence was mainly in the form of testimony and written notes from the estate planning attorney.27 The trial court held that wife’s conveyance into the trusts carried out her husband’s wishes and intentions.28 Son appealed the trial court’s December 2008 decision.29
Whether the trial court properly considered extrinsic evidence when determining the scope of authority granted under the power of attorney?30
Pure questions of law receive de novo review.31 When interpreting a power of attorney, the cardinal rule requires the court to determine the intention of the parties.32 Courts will not apply a rule of narrow construction to particular words and phrases used in the power of attorney.33 Courts will examine the express terms and the context of the instrument as a whole to give effect to the principal’s intent.34 In an instance where there is significant and well-documented extrinsic evidence of the reasons for which the principal created the power of attorney, the trial court does not err in taking that evidence into consideration.35
Yes. The trial court properly considered extrinsic evidence when determining the scope of authority granted under the power of attorney.36 The power of attorney was executed in 1996 after discussions with the estate planning attorney following the decedent's stroke in 1995.37 The evidence showed that the discussions were aimed at providing greater financial support for wife.38
The trial court allowed testimony and notes from the attorney showing the transfer carried out the decedent's intent.39 The court found no clear error in the factual determination that the conveyance fulfilled the husband's wishes.40
The trial court properly considered the extrinsic evidence in determining that the power of attorney authorized the transfer of the Clearwater property into the trust.41
Whether the wife's transfer of the Clearwater property into the trust breached her fiduciary duty through improper self-dealing?42
A fiduciary duty of loyalty is implied in every agency as a matter of law.43 Courts will ordinarily not render decisions involving events that are contingent upon circumstances that may or may not occur in the future.44 When evaluating the actions that wife has actually taken to date, a court cannot conclude that wife has violated her fiduciary duty to decedent or has given herself a gift that was not allowed under the terms of the power of attorney.45 This conclusion follows when the evidence shows that decedent intended the power of attorney to allow wife to take the precise actions she took.46
No. The wife's transfer of the Clearwater property into the trust did not breach her fiduciary duty through improper self-dealing.4748 Given that the trial court properly considered extrinsic evidence when evaluating wife’s actions, this evidence supported the court’s conclusion that wife’s actions fulfilled decedent’s intent.49 There is no merit in the argument that wife violated her fiduciary duty and engaged in improper self-dealing or made an improper gift to herself when she transferred the Clearwater property into the trust.50 One significant problem with the self-dealing argument is that it is speculative.51
Evaluating the actions that wife has actually taken to date, the court cannot conclude that wife has violated her fiduciary duty to decedent or has given herself a gift that was not allowed under the terms of the power of attorney.52 To the contrary, as the evidence below indicated and as the trial court held, decedent intended the power of attorney to allow wife to take the precise actions she took here when she transferred the Clearwater property into a trust.53 Wife’s actions were therefore in accord with decedent’s intent.54 There was no improper self-dealing.55
The wife's transfer of the Clearwater property into the trust did not breach her fiduciary duty through improper self-dealing.