Advisory: This posting assumes knowledge of the difference between a power of attorney and a power of appointment.
A legally incompetent trust-settlor cannot exercise a reserved right of amendment or revocation. Recall that each reserved right qualifies as an equitable nonfiduciary general inter vivos power of appointment. May, however, the settlor’s agent acting under a valid statutory durable power of attorney exercise either reserved right? Yes, provided either the terms of the power of attorney or the terms of the trust so provide. See Rest. (3rd) of Trusts, § 63, cmt. l; Unif. Trust Code §602(e).
The Unif. Power of Attorney Act (2006), see §201(a)(1), however, requires that there must be express authority in the power of attorney to amend or revoke by proxy. Authority, however, would still be lacking if the trust’s terms were to prohibit such proxy activity. The Act, see §211(b)(3), further provides that “general authority” in a power of attorney “with respect to trusts” authorizes the agent to “exercise for the benefit of the principal a presently exercisable general power of appointment held by the principal.”
An agent is subject to fiduciary constraints in the exercise by proxy of a right to amend or revoke a trust; so is the trustee when it comes to acquiescing to such an exercise. To complicate matters, there is a “growing state legislative trend” to impose statutory tort liability for the “unreasonable refusal of a power of attorney.” See Unif. Power of Attorney Act §120 and the accompanying commentary. The trustee’s lot is not an easy one. But it gets worse. The Rest. (Third) of Property (Wills and Other Donative Transfers), see §19.8, cmt. d, would arm the agentfiduciary with an “assumption” of authority to exercise a right of amendment or revocation, subject, however, to the limitations that the exercise must be “for the benefit of the donee to the same extent the …agent could make an effective transfer of similar owned property for the benefit of the donee.” The “similar owned property” condition presumably refers to property owned outright by the principal, although this is not confirmed in the Reporter’s Notes. Nor do the notes shed light on how directly the settlor needs to be “benefited” by the proxy exercise for the “benefit” condition to be satisfied. In any case, in the face of these possible limitations on the scope of the agent’s authority the trustee is bound by the fiduciary principle not to blindly honor such proxy exercises. Luckily, this is all default law 2 that can up to a point be rationalized or negated altogether in the terms of the governing instruments.
Cross reference. Not only is the trustee-fiduciary exposed to potential tort liability when it comes to declining to honor an amendment or revocation by proxy, but also when it comes to investigating incident to a trust-to-trust transaction the bona fides of a trustee of another trust, particularly when the investigation should extend beyond the four corners of the other trust’s certification. See §6.2.3 of Loring and Rounds: A Trustee’s Handbook (2026), the relevant portion of which section is reproduced in the appendix below.
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