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Power of Attorney Did Not Grant Power to Create a Trust

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Can an agent create a trust for you?

How can someone create a trust? It seems like a trick question. In Arizona, someone can create a trust by signing a trust document, transferring assets, or by making a will with trust provisions. Arizona even permits someone to just declare a trust exists.

But can an agent under a power of attorney create a trust for the principal? A recent Massachusetts case raised that question.

The lead-up to the court decision

Lubov Stempniewicz signed a will and a durable financial power of attorney in 2013, when she was 91. She named her brother Edward as agent in the power of attorney. The will replaced her earlier will, signed in 1999.

Four years later, Edward signed a trust for Lubov’s benefit. He signed it three times, actually: once on Lubov’s behalf as settlor, once on her behalf as trustee, and once on behalf of himself as co-trustee. Then he signed deeds transferring two pieces of real property to the trust’s name (again signing as Lubov’s agent). He also transferred her financial accounts — as well as some of his own, apparently — into the trust’s name.

The trust Edward signed left small amounts to each of Lubov’s children and grandchildren. It directed that the bulk of her estate would be held in continuing trust for the benefit of Edward’s own two children.

When Lubov died in 2018, her children and grandchildren sued Edward to recover her estate. They argued that he had no authority under the power of attorney to create the trust, and that it was therefore invalid. They sought a court order directing that Edward held the assets in trust for their benefit, and that he should divide Lubov’s $1.5 million estate among them.

The language of Lubov’s power of attorney actually mentioned trusts in at least two places. In one, it gave Edward the authority to “act for me in all matters that affect a trust….” In another, it authorized Edward to “transfer ownership of any property … to the trustee of a revocable trust I have created….”

Court rulings

The trial judge ruled that those provisions did not give Edward authority to create a trust. The trust he signed was invalid. Thus, he held all trust property for the benefit of Lubov and her estate. Edward appealed.

The Supreme Judicial Court of Massachusetts agreed with the trial judge, and affirmed its holding that the trust was invalid. But that did not mean that all trust assets automatically belonged to Lubov’s estate or children. The state high court remanded the case for the probate judge to determine whether the trust contained any of Edward’s own assets.

Key to the (thoughtfully reasoned) appellate decision was that Massachusetts law does not seem to permit an agent to create a trust for the principal. Or, at least, the law does not permit it in the absence of clear authority in the power of attorney document itself. And the two trust-related provisions in Lubov’s document could only be read to allow Edward to act with regard to existing trusts, not to create a completely new one. Barbetti v. Stempniewicz, June 28, 2022.

The appellate court noted, parenthetically, that Lubov did not consult with any lawyers before signing her new will and power of attorney. Likewise, Edward sought no legal consultation before he tried to create a trust (and transferred assets to it). Would the outcome have been different if a lawyer had been involved? Perhaps. Or perhaps a lawyer might have recognized that there might be concerns about Lubov’s abilities or intentions.

Does Arizona permit an agent to create a trust?

But what about Arizona law? Would the same thing happen if Lubov, Edward and all the property were in Arizona?

Though Arizona does not have a case on point (yet), it seems likely that the result would be pretty similar. Like Massachusetts, Arizona has adopted a version of the Uniform Trust Code. Arizona’s version says that a trust can be created only if “the settlor has capacity to create a trust.” Of course, it might be that Lubov had capacity and that Edward created the trust with her understanding and express approval. But if she lacked capacity, Arizona’s law seems to suggest that an agent could not create a trust.

But what if Arizona law applied and the power of attorney expressly and unequivocally authorized Edward to create (and fund) a trust? Might the trust have been valid then?

The answer is unsettled. Express language in a power of attorney would clearly be more helpful. But the Arizona version of the Uniform Trust Code seems to indicate that the only exception to the requirement that the settlor be competent is when a probate court approves the trust. Arizona does have a relatively simple and efficient mechanism for seeking court approval for such a single transaction. That process would have provided Lubov’s family with notice and an opportunity to weigh in on the trust’s terms, at least.


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Robert B. Fleming


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


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


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.

Famous people's wills

Matthew M. Mansour


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.