In Winkler v. Thompson, the court considered whether a niece who held a power of attorney for property for her uncle (the “Deceased”) but insisted that she never acted in a fiduciary capacity for the Deceased should have to pass her accounts.
The Deceased was survived by his estranged spouse (“Ilse”) and his niece (“Crystal”). Crystal agreed to pass her accounts when requested to by Ilse. Crystal, who held a joint account with the Deceased as well as being named his attorney for property, took the position that she never exercised the power of attorney as her uncle only became incapable in the last months of his life. While the Deceased was physically frail, he never lost his capacity to manage his finances. They had an arrangement that she would pay his bills and than reimburse herself from the joint account. The Deceased continued to make his own financial decisions, including making gifts to her, while she implemented his requests. Ilse took the position that the Deceased was incapable for a four-year period and Crystal had to account for that time period.
Crystal never kept receipts as she testified, she never acted without the Deceased’s knowledge or permission. This court, quoting Fair v. Campbell noted that Crystal was being asked to put together a whole jigsaw puzzle but without all the pieces.
Referencing section 32 of the Substitute Decisions Act, the court noted that an attorney is to keep accounts only if the granter is incapable or the attorney has reasonable grounds to believe that the granter is incapable. Crystal’s testimony, confirmed by independent witnesses, was that the Deceased never lost his capacity to manage property.
Ilse, due to the estrangement, had limited contact with the Deceased. She relied on a series of cognitive tests the Deceased undertook during his life that suggested that the Deceased had a cognitive impairment. However, the court noted that the Deceased was never specifically assessed for his ability to manage property. The court refused to rely on sporadic testing to confirm a lack of capacity. The Substitute Decision Act presumes capacity and there was no evidence to suggest that the Deceased was incapable until the very last months of his life.
Finally, though Crystal did not have to pass her accounts, the court granted her Judgment passing her accounts and dismissing all of Ilse’s objections. Crystal was also awarded $35,000.00 in costs in part to reflect the disbursements she spent in preparing accounts.
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