Chancery Court compels fiduciary to submit to an accounting under Durable Personal Powers of Attorney Act
By: Regina M. Matozzo, Esq.
Ferry Joseph, P.A.
In an opinion issued on June 30, 2014, Master Abigail M. LeGrow held that the authority of an agent pursuant to a power of attorney begins at inception not incapacity and ordered a forensic accounting be conducted by a third party in Estate of Dean, 2014 WL 3221222 (Del. Ch. June 30, 2014). The Petitioner, William Kemble Ketcham, was appointed agent under a power of attorney executed by his mother, Paulina DuPont Dean. After a dispute arose regarding whether the agent was required to pay the education costs of his brother’s children from his mother’s funds, William filed a Petition for Instructions. Respondent, Petitioner’s brother, J.S. Dean Ketcham, filed a counterclaim seeking an accounting of their mother’s funds after direct requests for an accounting were denied. Although the power of attorney, executed on October 26, 2004, predates the adoption of the Delaware Durable Personal Powers of Attorney Act, the Court concluded that J. S. had standing under the Act to seek an order compelling the agent to “account for transactions conducted on the principal’s behalf under a power of attorney.” William argued that although he was appointed agent in 2004 he did not begin to act until 2009, shortly after his mother was declared incompetent and also because his mother continued to write checks and sign her tax returns after he was appointed in 2004. Master LeGrow concluded that although the principal continued to exercise control over her finances after she executed the power of attorney she did not divest herself of the power to manage her own affairs simply by appointing her son as agent. The Court held that given the amount of money at issue, the time frame involved and the parties’ disputes regarding the agent’s actions, a formal accounting by a third party is appropriate and the cost of the accounting should be borne by the estate without prejudice to a later request to shift the costs in the event that the Petitioner successfully challenged the conduct of the attorney-in-fact. On September 17, 2014, Master Glasscock affirmed the decision holding that the power of attorney became effective when the attorney-in-fact accepted his appointment by exercising the power granted by it, not when the principal was declared incompetent, and that “regardless of the source of the fiduciary authority Kem was employing, he is still required as a fiduciary to use his principal’s property for her benefit only and to act scrupulously in her regard.” Estate of Dean, 2014 WL 4628584 (Del. Ch. Sept. 17, 2014).
4 W. Market St.
Chancery Court Compels Fiduciary to Submit to an Accounting under Durable Personal Powers of Attorney Act
Chancery Court compels fiduciary to submit to an accounting under Durable Personal Powers of Attorney Act
By: Regina M. Matozzo, Esq.
Ferry Joseph, P.A.
In an opinion issued on June 30, 2014, Master Abigail M. LeGrow held that the authority of an agent pursuant to a power of attorney begins at inception not incapacity and ordered a forensic accounting be conducted by a third party in Estate of Dean, 2014 WL 3221222 (Del. Ch. June 30, 2014). The Petitioner, William Kemble Ketcham, was appointed agent under a power of attorney executed by his mother, Paulina DuPont Dean. After a dispute arose regarding whether the agent was required to pay the education costs of his brother’s children from his mother’s funds, William filed a Petition for Instructions. Respondent, Petitioner’s brother, J.S. Dean Ketcham, filed a counterclaim seeking an accounting of their mother’s funds after direct requests for an accounting were denied. Although the power of attorney, executed on October 26, 2004, predates the adoption of the Delaware Durable Personal Powers of Attorney Act, the Court concluded that J. S. had standing under the Act to seek an order compelling the agent to “account for transactions conducted on the principal’s behalf under a power of attorney.” William argued that although he was appointed agent in 2004 he did not begin to act until 2009, shortly after his mother was declared incompetent and also because his mother continued to write checks and sign her tax returns after he was appointed in 2004. Master LeGrow concluded that although the principal continued to exercise control over her finances after she executed the power of attorney she did not divest herself of the power to manage her own affairs simply by appointing her son as agent. The Court held that given the amount of money at issue, the time frame involved and the parties’ disputes regarding the agent’s actions, a formal accounting by a third party is appropriate and the cost of the accounting should be borne by the estate without prejudice to a later request to shift the costs in the event that the Petitioner successfully challenged the conduct of the attorney-in-fact. On September 17, 2014, Master Glasscock affirmed the decision holding that the power of attorney became effective when the attorney-in-fact accepted his appointment by exercising the power granted by it, not when the principal was declared incompetent, and that “regardless of the source of the fiduciary authority Kem was employing, he is still required as a fiduciary to use his principal’s property for her benefit only and to act scrupulously in her regard.” Estate of Dean, 2014 WL 4628584 (Del. Ch. Sept. 17, 2014).