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Issue  22  Article  51
Published:  5/1/1997

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Gifts by Attorneys in Fact - a Comment on WHITFORD v. GASKILL, No. 399PA95., Supreme Court of North Carolina, 480 S.E.2d 690, Feb. 10, 1997
Chris Burti, Vice President and Legal Counsel

The Supreme Court of North Carolina in Whitford has come out with a definitive, first impression, decision on the power of an attorney in fact to make gifts of real estate on behalf of the principal.

 

In 1988, George W. Pittman, Jr., now deceased met with an attorney, and executed a power of attorney giving his wife, Rose Lupton Pittman, authority to act for Mr. Pittman including the power to transfer real property. The power of attorney modified the statutory short-form power of attorney set forth in N.C.G.S. 32A-1 and by stating that Mrs. Pittman had the specific authority to conduct "real property transactions, including the power to transfer the real estate known as the homeplace that I inherited from my mother."

Shortly thereafter, Mrs. Pittman signed a deed at the direction of Mr. Pittman, and in the presence of both Mr. Pittman and a notary public, conveying property from Mr. Pittman to Dessie Pittman Gaskill and Alice Pittman Lewis Durham, the defendants and Mr. Pittman's sisters. The deed was subsequently recorded and delivered to the defendants. At the time of delivery, the property was worth $75,000. The defendants did not pay any consideration for the property. Mr. Pittman died intestate and plaintiff (Mr. Pittman's daughter) and Mrs. Pittman's daughter, would be entitled to inherit the property.

In 1990, plaintiff initiated this action alleging that the deed to the defendants signed by Mrs. Pittman as attorney-in-fact for Mr. Pittman was void. The trial court granted partial summary judgment in plaintiff's favor after finding that the deed signed by Mrs. Pittman was void and of no effect. On appeal, the Court of Appeals affirmed the trial court and held that an attorney-in-fact may not convey real property by gift unless the power of attorney expressly confers the authority to make gifts of real property. Whitford v. Gaskill, 119 N.C.App. 790, 792, 460 S.E.2d 346, 347 (1995). The defendants appealed.

The Supreme Court opinion dealt with two main issues. First, does an attorney-in-fact have the authority to make gifts of real property on behalf of the principal if not expressly authorized to do so in the power of attorney? Second, if specific authorization is required, is the word "transfer," when added to the standard wording of the statutory short-form power of attorney, sufficient to confer such authority to make gifts of real property?

Citing; Annotation, Power of attorney as authorizing gift or conveyance or transfer without a present consideration, 73 A.L.R. 884 (1931) Johnson v. Fraccacreta, 348 So.2d 570 (Fla.Dist.Ct.App.1977); King v. Bankerd, 303 Md. 98, 492 A.2d 608 (1985); and Brown v. Laird, 134 Or. 150, 291 P. 352 (1930) the Whitford Court stated that " ... in accord with the majority of jurisdictions which have considered this issue, we hold that an attorney-in-fact acting pursuant to a broad general power of attorney lacks the authority to make a gift of the principal's real property unless that power is expressly conferred. Accordingly, the power of attorney set forth in N.C.G.S. 32A-1 and the powers granted attorneys-in-fact by N.C.G.S. 32A-2(1), standing alone, do not authorize an attorney-in-fact to make gifts of the principal's real property."

The Whitford Court then dealt with the issue of whether the word "transfer" was sufficient to modify the statutory form in order to grant the necessary authority by relying on its definition as set forth in Webster's Third New International Dictionary 2427 (1976)and Black's Law Dictionary 1497 (6th ed. 1990) stating "The common thread connecting each of these definitions is that the word "transfer" is a word ordinarily used to represent a conveyance of property by sale or by gift".

In 1995 the North Carolina legislature, amended N.C.G. S. 32A-1 and 32A-2. The amendment adds a section to the statutory short-form power of attorney giving the principal the ability to grant the attorney-in-fact the authority to make gifts to individuals and charities in accordance with the principal's personal history of giving gifts. Interestingly the Whitford Court, in noting the amendment stated that it "...does not affect our decision as it relates to general powers of attorney executed prior to the effective date of the amendment nor does it affect our decision as it relates to the attorney-in-fact's authority to make gifts subsequent to the amendment where there is no personal history of gift-giving.". It would seem that a clear inference could be drawn when a title examination does not disclose any previous gift deeds that there is no history of giving gifts to meet the threshold requirement of the statute. The "history" requirement is probably unnecessary as being too protective since the required act of initialing the power should be sufficient to demonstrate the principals intent. In light of the holding in this case, and the language in amended N.C.G.S. 32A-1 and 32A-2, it may be prudent for practitioners drafting these instruments to consider modifying the statutory form to include clear express language to implement their clients intentions.


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