The recent Superior Court decision of Ekelschot-Kumelj v. Bradley illustrates where a request for an attorney for property to pass accounts was denied. Edwards J. held that an attorney for property does not have to account if she never exercised her power as attorney.
Razalija Kumelj (Rose) died in October 2008 leaving behind four daughters. Rose’s health had declined in the last years of her life prompting her to sell her house in 2006. She made approximately $420,000 in profit. She used $260,000 from the proceeds to fund the construction of a granny suite attached to the home of her daughter (Ivanka) and moved in. Rose clearly trusted Ivanka, as she had appointed her as attorney for property in 1994 and named her as estate trustee. Rose spent another $27,000 on personal care workers and other medical needs. At her death, Rose’s assets had depleted from $420,000 to $130,471.
After she died, Rose’s other three daughters brought forward an application alleging that Ivanka (their sister) had misappropriated the funds from the sale of Rose’s house. Ivanka denied that she had ever acted under the power granted her as attorney. The three daughters argued that because Ivanka was both estate trustee and attorney for property, her dual role entitled them to an automatic accounting from 2006 until the present.
The court disagreed. Citing section 42 of the Substitute Decisions Act (SDA), Edwards J. held that there was no automatic entitlement to an accounting from an attorney for property for anyone other than the grantor of the power of attorney. As a result, the three daughters were required to apply for leave for an accounting. Further, section 32 of the SDA required that an attorney for property only maintain accounts once the grantor is (or the attorney believes the grantor to be) incapable of managing property. All the evidence before the court suggested that Rose remained mentally capable throughout her life. Rose’s doctor, financial advisor, and even the contractor who oversaw the building of the granny suite had written letters describing Rose’s active involvement in making her medical, financial and architectural decisions. Absent any indication of incapacity, Edwards J. found that Ivanka’s role was limited to the execution of her mother’s decisions, not their making. As a result, the court refused to order that Ivanka pass her accounts as an attorney for property.
However, the court did grant the three daughter’s request that Ivanka pass her accounts as estate trustee (i.e regarding Ivanka’s administration of her mother’s estate). In addition, Ivanka had acknowledged that her mother’s estate held an interest in her home equal to the increase in value that resulted from the renovations. The court suggested that Ivanka obtain an independent appraisal of her home to determine the actual amount of the increase.
Original post by Justin de Vries on All About Estates: Ivanka Trumps Rivals in Passing of Accounts
