Fiduciary duty

28 January 2015

Does the holder of a POA owe a general fiduciary duty to the principal?

Under Texas law the holder of a power of attorney, as an agent,  owes the principal a fiduciary duty.  In situations involving a transaction between the agent and the principal, Texas law closely scrutinizes the transaction and places the burden on the agent to prove the fairness of the transaction to the principal. But what if the agent doesn’t actually use the POA as part of the transaction in question?  Does the burden still fall on the agent to prove the fairness of the transaction and show that full disclosure was made to the principal? Texas courts typically answer yes. […]
26 August 2014

Court finds designated executor unsuitable

In Gossett v. Beck, the Dallas Court of Appeals upheld the probate court’s determination that an indepedent executrix designated in a will was unsuitable and therefore disqualified to serve.  The basis of the probate court’s decision was a deed from the decedent to the proposed executrix of a house worth $850,000 for apparently no consideration.  Furthermore, the transfer was accomplished via a power of attorney. This sort of transaction sets off immediate alarms because of 1) a transfer via a power of a attorney; and 2) for no apparent valuable consideration in return. Another beneficiary claimed that the proposed executrix […]
22 July 2014

Court imposes constructive trust for mother’s benefit

A heartbreaking part of my practice is seeing a child take advantage of an elderly parent.  A common scenario is the adult child whose “job” becomes taking care of a parent.  The arrangement can benefit both, as the parent receives care and assistance and the parent helps the child financially.  But it can become abusive as the child takes advantage of a position of trust and confidence to obtain significant money or assets from the parent or has the parent execute a will substantially in the adult child’s favor. When the parent relies on the child for care and support, […]
2 January 2014

Smith v. McDaniel: Liability for suspicious transactions with elderly man

In Smith v. McDaniel, the Tyler Court of Appeals upheld a judgment against Thomas Smith for defrauding an elderly gentleman, Bruce Greer.  The case was brought by a beneficiary of Greer’s estate who claimed that Smith defrauded Greer in various transactions.  According to the decision, Smith became close to Greer when Greer’s wife became ill because Smith assisted Greer in dealing with the hardships of his wife’s illness and subsequent death.  Greer gave Smith increasing control over his assets, including portions of nearly one million dollars in payments made to Greer under an oil and gas lease on his land.   Smith […]