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Agents Under Power of Attorney Justify $20 Million in Expenditures

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OCTOBER 11, 2010 VOLUME 17 NUMBER 32
Imagine this: you have a long-standing history of philanthropy and community involvement. You have substantial assets and you feel that you should use some of them to enrich the community where you live, where you made your fortune, and where your children were raised. Your spouse agrees with you about these goals, and the two of you want to make sure someone has the power to continue to pursue those goals even if you become incapacitated. You should both sign a power of attorney, and name as agent someone who you know agrees with your world view, right?

That is what Irwin and Xenia Miller, of Columbus, Indiana, did. In 1995 they signed mirror-image powers of attorney naming one another as agent. They both named one of their five children and a long-time financial adviser as co-agents to act if either could not act for the other. Then they went about living their lives.

To make their intentions clear, Irwin Miller wrote a letter to the couple’s children in 1996. “Of all the things we can ‘leave to you,'” he wrote, “money seems to us to be the least important.” He went on to tell the children that he and Xenia “have not lived and worked primarily to maximize your inheritance.” “We have worked and lived to make a constructive contribution to our community, church, and nation. And — we have lived our own lives the way we wanted to live them, and have had a good time so doing.”

For nearly a decade after signing their powers of attorney and writing to the children, Irwin Miller spent significant sums on maintaining several homes in Indiana and Ontario, Canada. In fact, the upkeep costs on three properties were in the millions of dollars during this time period. Irwin made those expenditures despite the fact that he and Xenia didn’t actually own one of the properties — it had been purchased by the son they named as agent in their power of attorney.

When Irwin Miller died in 2004, Xenia Miller was already incapacitated. The two agents in her 1995 power of attorney began to handle her finances, as she had planned. They faced a quandary: should they continue to pay significant sums to maintain properties even though the payments would not benefit Xenia Miller’s estate? Even though she might not be able to enjoy visiting two of the properties any more? Even though the expenditures might actually benefit one of the agents?

Xenia Miller died in 2008. During the four years between Irwin’s and Xenia’s death, the agents under the power of attorney spent over $20 million on keeping the properties going, making improvements and (in the case of the family home) arranging to interest the Indianapolis Museum of Art in moving into the property. Concerned that the expenditures might be challenged, they ultimately filed a petition with the local probate court seeking approval of their expenditures.

One of Irwin and Xenia’s children objected, and a four-day hearing was held on the accounting filed by the agents. Among his allegations: because the agents were acting under a power of attorney, their behavior created a presumption of undue influence requiring that the payments be set aside. The probate judge listened to testimony and arguments from both sides and then approved all the transactions. The judge also ordered the objecting son to pay the legal fees incurred by the agents.

The Indiana Court of Appeals reviewed the holding and agreed that “Xenia and Irwin Miller were extraordinary individuals who did everything in their power to enrich their community, support their family, and better society as a whole.” The appellate judges upheld the probate court approval of the expenditures; they did, however, rule that the contest was not frivolous and so reversed the award of attorneys fees. In Re General Power of Attorney of Miller, September 30, 2010.

The Millers left an extraordinary legacy — on many levels. They provided for their five children. They enriched their community. They created a lasting memory of a wealthy and public-spirited family. Though they probably did not intend to leave a legal precedent that could guide others, they did. By writing what amounted to an “ethical will,” setting out not just financial inheritances but also principles he lived by and hoped would guide his children, Irwin Miller gave us another legacy: he taught us that a power of attorney can be used to carry out the intentions of the signer, even if his purposes are not solely financial.

The Court of Appeals opinion is worth reading, if only for the language of Irwin Miller’s letter to his children. For more on the extraordinary Millers, consider the Christie’s auction notice describing sale of their collection and their impact on the architecture and art communities. Xenia Miller was an extraordinary individual in her own right, with business, art, religious and civil rights credentials that earned her recognition and acclaim.

One Response

  1. If the law is put in place to protect a patients rights who had a stroke, is blind, unable to walk, and has been legally declared incompetent by his doctors, then what law is there to protect the family of the patient if a part-time girlfriend comes in exploiting a vulnerable adult with intention to isolate and alienate, to the point where the family is shut off from all communication. The father is the patient, the girlfriend the puppet-master, pulling the string to destroy each family member one day at a time so they pose no threat. The hospital, aware of this, allows it to happen…patients rights…even though the patient is being brainwashed. The son gets legal guardianship, but oopps, the father had the stoke out of the state they reside. Start process all over again. However, the father is so brainwashed by now, it may be too late. The girlfriend has all the rights…the family destroyed. How could this happen?

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Robert B. Fleming

Attorney

Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman

Attorney

Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson

Attorney

Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

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Matthew M. Mansour

Attorney

Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.