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Delegation of authority to create a trust through a durable general power of attorney to serve the interests of the principal does not violate public policy as a matter of law, even when a trust's dispositive terms may serve a function similar to that of a will.
The decedent, Louis Kurrelmeyer, executed a power of attorney designating the widow, Martina Kurrelmeyer, as his agent. Using the power of attorney, Martina created a trust, and transferred real property into the trust. The trust gave the widow greater benefits regarding that property than she had under the decedent's will. The trial court found the power of attorney ambiguous, and ruled that it authorized only maintenance of, and additions to, trusts already existing when the power of attorney came into being.
Did the trial court err in concluding as a matter of law that the power of attorney did not authorize Martina to create a trust on Louis Kurrelmeyer's behalf?
The appellate court held that the power of attorney was unambiguous, and it expressly authorized Martina to create a trust. The power of attorney was "general" and broad. It did refer to a trust already in existence, but did not suggest lack of authority to create a new trust. The fact that the trust here was created by an agent did not affect its legitimacy. This interpretation of the power of attorney was not contrary to public policy. The question of whether Martina’s actions breached her fiduciary duties remained. Although Martina had authority to create the trust, her authority was not limitless. The trial court did not reach the question of whether the trust was a breach of fiduciary duty.