Nicolas LiGreci (Mr. LiGreci) created an irrevocable trust in 1991. Mr. LiGreci’s brother, John, was named as the trustee of the trust and his accountant was named as successor trustee. Upon Mr. LiGreci’s death, the trust proceeds were to be distributed in equal shares to his three children, John, James, and Linda. The sole trust asset was a $1 million life insurance policy on Nicolas’s life.
In 2010, Mr. LiGreci executed a New York statutory short form power of attorney designating his daughter, Linda, as agent, and his grandson, Nicolas, as successor agent, along with the major gifts rider to the power of attorney. Shortly thereafter, Linda as agent under the power of attorney executed a trust amendment removing her uncle John and the accountant as trustee and successor trustee, and in their place appointing her son, Nicholas Perosi, and Ericalee Burns as trustee and successor trustee, respectively. Each of the trust beneficiaries executed the required statutory consent to the trust amendment. Mr. LiGreci did not personally sign the amendment and died 15 days after its execution.
Linda and Nicolas petitioned the court for an order directing uncle John and the accountant to: (1) turn over all records in their possession relating to the trust or its assets; (2) submit to examinations before trial concerning the nature and value of the trust corpus when received, any income received, disbursements and commissions paid, the locations of all records relating to the trust; (3) account for the trust; (4) account to the court for all the trust property and effects which were received by John as trustee from the date of creation of the trust to the date of such accounting. Uncle John and the accountant moved the court to deny the validity of the amendment removing them as trustees.
The court found that: (1) the trust was irrevocable and could only be amended by the statutory mechanism allowing the creator of an irrevocable trust to revoke or amend a trust by obtaining the consent of all persons beneficially interested in the trust property; (2) the statutory right did not extend to Linda as agent under the power of attorney; (3) the statutory right to revoke is a personal right which may only be exercised by that individual absent language in the trust indicating otherwise; and (4) even construing the terms of the power of attorney at its broadest, the authority granted the agent with regards to trusts and estate instruments extended only to actions taken prospectively. Accordingly the court denied Linda’s and Nicolas’s petition, and vacated the trust amendment.