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Unlike Arizona, Oregon Power of Attorney Effective for Gifts

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Suzanne C. Pruitt died in 1994 from complications related to her Alzheimer’s disease. At the time of her death her estate was worth over $1.4 million. The IRS argued that it should have been $120,000 more than that, and that the estate should pay just under $50,000 more in taxes.

For years before her death Ms. Pruitt had made regular gifts to her children and grandchildren. In 1992, for example, she had given $185,000 to her three children and another $70,000 to grandchildren. The reasons for her generosity were clear: she wanted her offspring to enjoy the money immediately, and she wanted to reduce the size of her estate to limit the amount of tax due at the time of her death.

In 1987, and again in 1992, Ms. Pruitt had given her daughter Sandra Thompson a durable power of attorney to handle her financial matters. As it turned out it was good she had done so, since Ms. Pruitt lost the ability to manage her own affairs by 1993. In that year, Ms. Thompson had to decide whether to continue her mother’s pattern of making gifts of her property.

Using the power of attorney Ms. Thompson did give away some of her mother’s property in 1993, but she only transferred $10,000 each to Ms. Pruitt’s three daughters and their husbands. The next year she did the same thing, and Ms. Pruitt died a month after the last transfers of property.

When the estate tax return was filed, the IRS had no problems with gifts made by Ms. Pruitt herself before 1993. The tax authority did object to gifts made using he power of attorney, however. The agency argued that the powers of attorney did not include express language authorizing Ms. Thompson to give away her mother’s property, and so the gifts were incomplete. Since Ms. Pruitt could theoretically have filed a lawsuit to set aside the gifts and secure a return of the property, they should be included in her estate for tax purposes, insisted the IRS.

Ms. Pruitt’s children disagreed, and appealed to the United States Tax Court. They argued that Oregon law does not require any special language in a power of attorney to authorize gift giving, and that the transfers were effective to reduce Ms. Pruitt’s estate.

The Tax Court was particularly impressed by the history of gifts made by Ms. Pruitt while she was still competent, and the testimony of her attorney that he had advised her to continue to make gifts. The Court ruled that Ms. Pruitt’s estate did not owe the additional tax. Estate of Pruitt v. Commissioner, September 12, 2000.

The Pruitt decision would provide no comfort to an Arizona taxpayer in a similar situation, however. Arizona law is clear: a power of attorney does not authorize gifts unless the power is clearly spelled out and separately initialed by the principal and witnesses.

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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.