Gagnon V Coombs Summary
Case Study Decision: Change In Circumstances
Gagnon v. Coombs
pRESENTED BY:
SVETLANA SHEVCHENKO
To recap this matter: Francis Gagnon and his wife executed powers of attorney (POA) appointing their daughter, Joan Coombs, as their agent. Later on, the document was revoked per their son’s request but Joan was not advised of this fact. In two months, after Mrs. Gagnon’s death, Mr. Gagnon signed an agreement selling the farm he owned in Shelburne, MS and informed Joan of the sale and his intentions to live with Frank, his son, in Hillsborough, N.H, another property owned by Gagnon’s and given to Frank by Mr. Gagnon.
Without any knowledge that POA was revoked, Joan created and executed a trust where she was the sole trustee, and conveyed the Shelburne to the trust but failed to notify her father. Mr. Gagnon’s attorney demanded that Joan return the property to her father but she refused. Mr. Gagnon filed an action and the trial court found that Joan had the authority under the …show more content…
POA to convey the Shelburne property to the trust. Two questions have to be addressed here:
1. Did Joan have the right to convey the Shelburne farm to a trust that she had established?
2. Does the property belong to the trust or to Mr. Gagnon?
According to Power Attorney Law and Definition, “A power of attorney is an instrument containing an authorization for one to act as the agent of the principal that terminates at some point in the future either by its terms or by operation of law such as death of the principal or agent. The person appointed is usually called an Attorney-in-Fact.” The document can be revoked by the principal, making the POA, at any time, as long as he/she is competent. Once the agency relationship ends, the agent has no authority to act on behalf of the principal. POA obligates the agent to act in the best interests of the principal. An agent is a fiduciary, with strict standards of honesty and loyalty to the principal who must safeguard the principal’s property, and keep it separate from the agent’s personal property.
Now, let’s look into the definition of a trust: it is “an entity which owns assets for the benefit of a third person, called the beneficiary. A living trust is an effective way to provide lifetime and after-death property management and estate planning. When you set up a living trust, you are the grantor/settlor/trustor; anyone you name within the trust who will benefit from the assets in the trust is a beneficiary”.
Considering the fact that trial court found Joan a legal beneficiary of the trust, it would be safe to assume that the trust was created and the Shelburne property conveyed before the POA was revoked.
Simultaneously, both, Mr. Gagnon and his daughter Joan were not aware of each other’s actions up until Mr. Gagnon signed the contract to sell the farm. However, Joan being an agent while POA was active, had an obligation to inform Mr. Gagnon of any material changes. Conveying the Shelburne farm to her trust was definitely a material transfer and by failing to notify her father, she violated her duty of loyalty. That is a breach number one and secondly, Joan needed to realize that her authority to arrange for the Shelburne property had been revoked when she found out that Mr. Gagnon had a contract to sell it. Therefore, Mr. Francis, should be official owner of the Shelburne, who would have rights to void transaction created by Joan Coombs and recovery the property to
himself.
References
Beatty, J., Bredson, D., & Samuelson, S. (2013). Introduction to Business Law, (4th Edition), Mason, OH: South-Western, Cengage Learning
Power of Attorney Law & Legal Definition. Retrieved from http://definitions.uslegal.com/p/power-of-attorney/
Gagnon v. Coombs
pRESENTED BY:
SVETLANA SHEVCHENKO
To recap this matter: Francis Gagnon and his wife executed powers of attorney (POA) appointing their daughter, Joan Coombs, as their agent. Later on, the document was revoked per their son’s request but Joan was not advised of this fact. In two months, after Mrs. Gagnon’s death, Mr. Gagnon signed an agreement selling the farm he owned in Shelburne, MS and informed Joan of the sale and his intentions to live with Frank, his son, in Hillsborough, N.H, another property owned by Gagnon’s and given to Frank by Mr. Gagnon.
Without any knowledge that POA was revoked, Joan created and executed a trust where she was the sole trustee, and conveyed the Shelburne to the trust but failed to notify her father. Mr. Gagnon’s attorney demanded that Joan return the property to her father but she refused. Mr. Gagnon filed an action and the trial court found that Joan had the authority under the …show more content…
POA to convey the Shelburne property to the trust. Two questions have to be addressed here:
1. Did Joan have the right to convey the Shelburne farm to a trust that she had established?
2. Does the property belong to the trust or to Mr. Gagnon?
According to Power Attorney Law and Definition, “A power of attorney is an instrument containing an authorization for one to act as the agent of the principal that terminates at some point in the future either by its terms or by operation of law such as death of the principal or agent. The person appointed is usually called an Attorney-in-Fact.” The document can be revoked by the principal, making the POA, at any time, as long as he/she is competent. Once the agency relationship ends, the agent has no authority to act on behalf of the principal. POA obligates the agent to act in the best interests of the principal. An agent is a fiduciary, with strict standards of honesty and loyalty to the principal who must safeguard the principal’s property, and keep it separate from the agent’s personal property.
Now, let’s look into the definition of a trust: it is “an entity which owns assets for the benefit of a third person, called the beneficiary. A living trust is an effective way to provide lifetime and after-death property management and estate planning. When you set up a living trust, you are the grantor/settlor/trustor; anyone you name within the trust who will benefit from the assets in the trust is a beneficiary”.
Considering the fact that trial court found Joan a legal beneficiary of the trust, it would be safe to assume that the trust was created and the Shelburne property conveyed before the POA was revoked.
Simultaneously, both, Mr. Gagnon and his daughter Joan were not aware of each other’s actions up until Mr. Gagnon signed the contract to sell the farm. However, Joan being an agent while POA was active, had an obligation to inform Mr. Gagnon of any material changes. Conveying the Shelburne farm to her trust was definitely a material transfer and by failing to notify her father, she violated her duty of loyalty. That is a breach number one and secondly, Joan needed to realize that her authority to arrange for the Shelburne property had been revoked when she found out that Mr. Gagnon had a contract to sell it. Therefore, Mr. Francis, should be official owner of the Shelburne, who would have rights to void transaction created by Joan Coombs and recovery the property to
himself.
References
Beatty, J., Bredson, D., & Samuelson, S. (2013). Introduction to Business Law, (4th Edition), Mason, OH: South-Western, Cengage Learning
Power of Attorney Law & Legal Definition. Retrieved from http://definitions.uslegal.com/p/power-of-attorney/