Trusts and Estates
Pool-O’Connor v. Guadarrama
Cite as F083954
Filed April 25, 2023
By Golnaz Yazdchi
Sheppard Mullin Richter & Hampton LLP
Headnote: Powers of Attorney – Duties Regarding Joint Accounts
Summary: Absent express authority under a power of attorney, an attorney-in-fact may not create a survivorship interest in the principal’s funds by depositing funds into a joint account, of which the attorney-in-fact is a joint owner.
Pool and his wife established a trust, which provided that the designation of beneficiaries or specific gifts in the trust would become irrevocable after the death of the first settlor. After Pool’s wife died, Pool executed certain estate planning documents, including an amended and restated trust, a pour-over will, and a power of attorney. Pool named his nephew, Guadarrama, as his successor fiduciary under the new estate planning documents. Pool also added Guadarramaas an authorized signer to a joint account, that contained Pool’s money exclusively. Gaudarrama made several large deposits of Pool’s money to the joint account before Pool died, and withdrew significant funds both before and after Pool’s death. Under the power of attorney, Gaudarrama was authorized to make gifts to himself in an amount not to exceed the annual federal gift tax exclusion, but only in the proportions authorized in Pool’s estate planning documents. The trial court surcharged Pool for the amounts he withdrew from the joint account in excess of the federal annual exclusion amount.
The appellate court affirmed. Guadarrama breached his fiduciary duties as attorney-in-fact by (1) creating a survivorship interest in funds deposited to the joint account where the power of attorney did not expressly grant him such authority; and (2) claiming an ownership interest in the joint account funds because to do so amounted to an attempted change in the designation of beneficiaries who would have otherwise shared in the entitlement to the funds under Pool’s willand trust. Guadarrama was properly surcharged for amounts he withdrew from the joint account in excess of $14,000 (the federal annual exclusion amount).