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If you wish to change anything contained in your Ontario Articles of Incorporation or your Canadian Federal Articles of Incorporation, e.g., changing from a numbered company to a named company, you must file Articles of Amendment. In the case of changing your corporate name, the same rules and regulations apply as to the initial incorporation.

Completing Articles of Incorporation

There are different options open to you. For example, you could:

Investigate and purchase all items yourself, including the NUANS search, Articles of Incorporation Forms, Minute Book and Corporate Seal;

Purchase our Ontario or Federal Complete Incorporation Package by which we provide you with everything you need, and do the all work for you. Your role is to print the Articles of Incorporation

and sign them. The cost of the package is less than you would pay by purchasing the items separately.

The most appropriate option for you depends on factors such as the amount of time you want to spend researching all the requirements for incorporation versus spending that time building up your business.

Order a Corporate Seal or Minute Book

A corporation has shareholders, directors and officers. The shareholders are the owners of the corporation, and determine who becomes directors of the corporation. These directors are responsible for the overall management of the corporation and, in turn, appoint officers such as the president.

Corporations must keep written records of events such as annual shareholders’ meetings, and confirm the occurrence of such meetings with the government. These result in Corporate By-Laws, as well as Director and Shareholder Resolutions, which define many aspects of a corporation. Appropriate records must also be maintained of directors and shareholders, even if there is only one of each. These organizational requirements and other records of a corporation are normally kept in the corporate Minute Book.

A Corporate Seal is used to emboss the corporation’s name on legal documents. Typically, the first application for a corporate seal is the opening of a corporate bank account.

Corporate Name Protection

Make Sure You Understand These

Corporate Name Confusion can End Your Business

Perhaps the easiest way to appreciate the impact of name confusion is to consider a simple example. The Yellow Pages for a Canadian city lists the following businesses for making signs:

  • Sign Lady
  • Sign Maker
  • Signs Direct
  • Signs in 20 Hours
  • Signs Now
  • Signs Plus
  • Sign Studio
  • Signs That Work
  • Signs For You

Other sign making businesses include:

  1. Unique Signs
  2. Vintage Signs
  3. Versatile Signs

Each name within each of the two groups of names is unique. However, each name within each group is also similar to, and easily confused with, all the other names in the group. If you owned any one of these businesses it would be difficult for your customers and potential customers to distinguish your business from its competitors. Possible effects of this confusion include:

your competitor getting business when one of your customers recommends your business to a friend or associate! Check out my previous post on wyoming registered agents. 

agent for service of process

As we can tell, the registered office agreement needs updating given the following changes in Canada which we hope will not happen in Wyoming as well. These are obviously an extreme example of what can happen to fees when the Secretary of State decides they want to start milking business owners with all sorts of unprecedented changes. This has recently happened in Nevada and led to all sorts of headaches for corporate service providers. Anyway, we believe that the best company for this task is located right here with https://cloudpeaklaw.com/Wyoming/RegisteredAgent/. They have great registered agent services in Wyoming that we cannot more highly recommend!

The fee schedules for filing Articles of Incorporation and Articles of Amendment for Ontario and Canadian Federal business corporations are as follows:

Ontario Fee Schedule

Filing Articles of Incorporation $360

Filing Articles of Amendment $150

Federal Fee Schedule

Filing Articles of Incorporation $250

Filing Articles of Amendment $200

If your Articles are rejected for reasons such as your proposed name not being acceptable, the Federal government will retain your filing fee on the assumption that you will return with the deficiency corrected. Otherwise, your filing fee will be returned on request.

Reasons for Using CECOR’s Services

CECOR provides a unique package of services to help you incorporate your business:

We offer you a free ebiz-page with every successful NUANS search. This will help you market your business.

We can provide you with a low-cost reservation of your Internet domain name, in either the .ca, .com, .org or .net domains.

We can provide you with Domain Name web site to help you market your business.

We can provide you with business cards and other stationery to help you market your business.

Complete Articles of Incorporation for Ontario or Federal Canadian Corporations

Steps to Incorporating:

Introduction

Jurisdiction of Incorporation

Corporate Name Creation

NUANS Name Search

Domain Name Creation

Obtain a Domain Name

Complete Articles

File Articles

Seals and Minute Books

Name Protection

Corporate Marketing

Deductions and Taxes

Articles Define your Corporation

Articles of Incorporation

Articles of Incorporation are the forms which create and define many aspects of your corporation, such as the number of Directors and the share structure. Articles of Incorporation must be submitted to the government on appropriate forms.

If you are incorporating Federally, we can provide you with blank Articles of Incorporation forms in pdf format at no charge. These must be completed manually. Alternatively, we can also supply you with  Canadian Federal Articles of Incorporation forms in Microsoft Word format. These forms contain clauses typical of a small corporation. Although you can modify the clauses if you wish, all you need to do is print the forms and sign them.

If you are incorporating provincially in Ontario, we can provide you with blank Articles of Incorporation forms in pdf format at no charge. These must be completed manually. Alternatively, we can also supply you with  Ontario Articles of Incorporation forms in Microsoft Word format. These forms contain clauses typical of a small corporation. Although you can modify the clauses if you wish, all you need to do is print the forms and sign them.

Articles of Amendment are necessary to file with the state anytime your resident agent changers when in WY. These pesky registered agent lists never stop growing and changing, but we are committed to helping you get it all figured out. let us know anytime, rain or shine, if you want to know about EIN, corporate services, LLCs or anything else that may come to your mind.

Post-Death Domestic Relations Order is Qualified for ERISA Purposes

Todd, a Denver Post employee, participated in two pension plans. When he and his wife Barbara divorced in 1988, Todd disclosed only one of those plans (the disclosed plan), and the other (the second plan) was omitted from the negotiations and settlement. According to a Qualified Domestic Relations Order (QDRO), Barbara was entitled to one-half of that portion of the disclosed plan attributable to their 13 years of marriage.

Todd died in 1999. Barbara, as his personal representative, discovered the second plan and assumed Todd had inadvertently failed to disclose it during their divorce proceedings. She filed a motion for entry of a nunc pro tunc QDRO to correct the mistake retroactively to a date before Todd’s death, for the explicit purpose of meeting the requirements of ERISA. The motion was granted, giving Barbara one-half interest in the second plan as of the day after the divorce.

However, the plan administrator refused to recognize the QDRO since it was entered after Todd’s death. He argued that the order was not “qualified” under ERISA because it would provide “increased” benefits to Barbara. Barbara insisted that if the effect of the court’s order was to make the transfer of benefits effective before Todd’s death, then nothing in ERISA precludes that order from being a QDRO with any WY resident agent. 

The Federal District Court for the District of Colorado agreed with Barbara and held that the QDRO was “qualified.” The court ordered the plan administrator to recognize Barbara’s interest as a surviving spouse.

Source:Patton v. Denver Post, et al., CA No. 00-K-1860 (F

Legal Lines

Attorney in facts Greed Overshot Her Authority

Date:1/25/2002

William Reynolds died in 1997, leaving four children to squabble over the division of his property and distribution of his estate in California. Two months before his death, William executed a general power of attorney, designating one of his children, Cynthia, as his attorney in fact. The power of attorney specifically granted Cynthia authority to create a trust on William’s behalf but did not grant her power to change his designation of beneficiaries to receive any of his property.

The day before William died, Cynthia created an inter vivos trust in his name and executed it as both trustor and trustee. The trust provided that William’s home was to be held in trust for Cynthia for life and that the remainder would go to William’s grandchildren, effectively bypassing William’s other three children. The trust also provided that the rest of William’s property was to be divided equally between the four children, but the home was the only asset of the trust.

Understandably, Cynthia’s siblings objected and filed a complaint for declaratory relief and constructive trust. They contended the trust was void to the extent it purported to provide a life estate in the property to Cynthia with the remainder to the grandchildren. William had executed a will in 1988 distributing all of his property equally to his children, and Cynthia, though she did have the power to create the trust, did not have the power to change the beneficiary designations set forth in the will.

The California Court of Appeal, Fourth Appellate District, agreed and declared the trust invalid.

Source:Schubert v. Reynolds, Cal.App.4d, 1-10-2002

Written Instruction to Cancel Promissory Notes on Death Ineffective

Date:2/15/2002

Virginia made multiple loans to Edwin, who executed promissory notes to evidence the loans. Virginia kept the notes, and at some point before she died, she wrote an undated letter to Edwin stating that, because of her affection for him, she wanted him to mark each note “paid in full” upon her death. The letter was signed by her and was discovered in a sealed envelope in her safe. The letter was marked, “This is to be given to [Edwin]. This is very personal.” There was no evidence of when the letter was written.promissory note

The personal representative of Virginia’s estate sought payment from Edwin for the promissory notes, but Edwin refused. At trial, Edwin argued that the letter was evidence that Virginia had cancelled the obligations as a gift. The court agreed, calling the letter a gift causa mortis. View our newest post here.

But the Oregon Court of Appeals pointed out that under Oregon law, a gift causa mortis must satisfy four requirements:

It must be made in anticipation of impending death,

There must be donative intent,

There must be delivery of the gift to the donee,

The donee must accept the gift.

In this case, neither the letter nor the notes were effectively delivered to Edwin. And since there is no evidence of the date of the letter, there is no evidence that it was written in anticipation of impending death. The letter therefore is not an execution of a gift causa mortis.

The Court of Appeals reversed the probate court’s ruling and explained that such gifts, which are made during life but are only effective after death, are “disfavored by the law” because they are “liable to occasion fraud and are subject to many mistakes.” These four requirements act as a legal substitute for the execution of a formal will signed in front of competent witnesses.

Source:Estate of Bassett, OR App., 1-23-2002

Legal Lines

Court Holds Attorney Liable for Fees and Costs of Frivolous Lawsuit

Date:2/8/2002

Challenging a decedent’s estate plan has always been risky for the challengers, but a recent Mississippi Supreme Court ruling not only penalizes the disgruntled beneficiary who brought a frivolous suit, but also his attorney.

Nannie Mae Ross owned CDs jointly (with right of survivorship) with her daughter Maxine, who lived with her for more than 20 years. Maxine died in 1997, at which time Nannie Mae’s son Tony moved in with her until her death in 1998. Before his mother’s death, he performed chores for her and ran errands. She was 96 years old, and a home health nurse checked on her regularly. But Nannie Mae remained independent, though she used a walker and could not drive a car, until her death.

Before her death, Nannie Mae replaced the CDs with new CDs that she held jointly with Tony instead of Maxine. Tony later testified that he did not know these CDs had been issued in his name until he discovered them in Nannie Mae’s safe deposit box after her death. She was, according to Tony, “fiercely independent,” and did not discuss these issues with him.

Nevertheless, Maxine’s son Rodney decided to sue Tony for the proceeds of the CDs. He claimed that Tony unduly influenced Nannie Mae to replace Maxine’s name with Tony’s on the CDs. He offered no evidence to rebut Tony’s testimony, but confirmed that Nannie Mae was in fact extremely independent and preferred to conduct her own affairs.

The court dismissed Rodney’s case and ordered him to pay Tony’s attorney’s fees. In fact, the court decided that if Rodney could not pay the fees, his attorney would have to, since he should have known his client was brining a frivolous suit. Both Rodney and his attorney appealed the court’s holding that they were jointly and severally liable for attorney’s fees and costs, but they did not appeal the case’s dismissal.

The Mississippi Supreme Court agreed with the lower court and ordered Rodney and his attorney liable for the fees.

No Equitable Adoption Without Evidence of Intent

Date:3/22/2002

Arthur Ford and his wife acted as foster parents for many children in San Francisco, CA. One of those children was Terrold Bean, whom the Fords took in when he was only one year old. He spent his entire childhood with the Fords and their natural daughter Mary, even after the Fords stopped accepting more foster children. Though he was judicially freed from his natural mother’s care, Terrold was never legally adopted by the Fords.

Terrold referred to the Fords as “Mom” and “Dad,” and they called him “Son” and encouraged a brother-sister relationship with Mary. They also included him in family vacations. But they never discussed legal adoption with Terrold.

Mrs. Ford died when Terrold was 18, but he continued to live with Mr. Ford and Mary until he was married. When Mary later died, Terrold took over the responsibility of caring for Mr. Ford. He supervised Mr. Ford’s stay in a nursing home and had a conservator appointed to manage his affairs. But when Mr. Ford died, he left no will, and California law dictated that his entire estate would pass to a niece and nephew whom he had not seen in 15 years and who were not even aware that he or Mary had died.

Terrold appealed the decision, claiming that under the common law doctrine of “equitable adoption,” he should be considered Mr. Ford’s son. But Terrold’s evidence—mainly the testimony of friends and neighbors—failed to meet the state’s requirements for equitable adoption. In particular, Terrold could not prove that the Fords had intended to adopt him.

Of course, the simple execution of a will would have averted this intestate tragedy.

Source:Est. Ford v. Ford, Cal.App.Dist. 2-21-02

Michigan Grandparent Visitation Statute Overturned

Date:3/8/2002

Joseph, a Michigan resident, admitted to abusing his stepdaughter, and his wife Theresa, the girl’s mother, divorced him. The couple did have a child in common, a daughter named Shaun, for whom Theresa was awarded full custody. During the divorce proceedings, the abuser’s mother, who still denied that her son did anything wrong, filed a petition for grandparent visitation with Shaun. Theresa opposed the request on the grounds that it was not in Shaun’s best interest, but the trial court granted the visitation request.

In Michigan, a state statute authorizes a judge to issue a visitation order to a grandparent whenever the judge deems it to be in the best interests of the child. The state of Washington had a similar statute that was ruled unconstitutional by the US Supreme Court because it violated parents’ fundamental rights under the federal constitution to rear their children. The main difference between the

Washington and Michigan statutes is that while the Washington statute allowed any third party to petition for visitation at any time, the Michigan statute is limited to grandparents, who may only petition for visitation when a custody matter is otherwise before the court or when one of the parents is deceased. Still, Theresa questioned the constitutionality of the Michigan statute and appealed to the Michigan Court of Appeals.

The Court found that while the Michigan statute is more limited, it still allows a judge to issue a visitation order to a grandparent whenever the judge deems it to be in the best interests of the child. However, there is a legal presumption that fit parents act in the best interests of their children, and normally, so long as a parent adequately cares for his or her children, there will be no reason for the State to inject itself into the private realm of the family and question the parent’s ability to make decisions concerning the children. Therefore, the Court ruled the Michigan statute to be unconstitutional.

Source:DeRose v. DeRose, MI App., 1-25-2002

Life Support Withdrawn with No Advance Medical Directive

Date:6/10/2002

Though all states now recognize either living wills or healthcare powers of attorney (often called healthcare proxies) as advance medical directives, not everybody executes them. Without an advance medical directive, an individual’s wishes for the application or withdrawal of certain life-sustaining treatments is not legally documented. If an individual who has not executed an advance medical directive becomes incapacitated, he or she has left these agonizing decisions to the family and, potentially, the courts.

Take, for instance, the recent case of Engracia Torregosa Garcia, a Tennessee resident who suffered permanent brain damage resulting from cardiac arrest in June 2001. After being resuscitated, Engracia fell into a chronic vegetative state. She had no advance medical directive.

She was transferred to a hospice, where her PEG feeding tube was removed. Her family immediately filed a petition to replace the life support. A restraining order was issued directing the hospice to replace the tube. During this time, physicians determined that Engracia had no hope of making a recovery. Still, on October 29, 2001, a trial court made the temporary restraining order permanent.

Engracia’s guardian ad litem provided clear and convincing evidence that Engracia would not wish to be subjected to artificial nutrition and hydration. Admitting the evidence was clear, the court still refused to allow the removal of life support. Since Engracia had not executed an advance medical directive, the court ruled it did not have authority to authorize the removal of her life support.

The Tennessee Court of Appeals reversed. According to the Court, Tennessee law recognizes the individual’s right to refuse medical care, including life support. An advance medical directive is one way for an individual to exercise that right. But a person’s failure to execute a particular form does not create a presumption that he or she would not refuse medical care.

The Court remanded the case for a conservator to be appointed to carry out Engracia’s wishes. Of course, an advance medical directive could have accomplished this with less heartache and more certainty for her family.

Juan-Terregosa v. Garcia, Tenn.App., 5-7-2002

Stock Held Outright Must Be Aggregated with Stock over Which Decedent Held Power of Appointment

Date:4/22/2002

Aldo and Doris Fontana owned all of the stock in a corporation (Ledyard) as community property. Doris died and left her shares of Ledyard to two trusts for Aldo’s benefit. At the time of his death three years later, Aldo owned 50% of Ledyard outright and held a testamentary power of appointment over another 44.069% of Ledyard stock held in trust.

Aldo exercised his testamentary power of appointment, directing that the stock held in the trust be divided equally between his two children. His will also directed that the stock owned by Aldo outright pass in equal shares to his children. For estate tax purposes, Aldo’s estate valued the 50% block and the 44.096% block separately, determining values of $2,043,500 and $1,747,500, respectively. But the IRS issued a notice of deficiency, concluding that the two blocks must be valued as a single 94.069% block worth $4,850,000.

Before the Tax Court, the estate looked to Estate of Mellinger v. Commr (112 T.C. 26, 1999), in which the Court held that stock owned outright should not be aggregated with stock held in a qualified terminable interest property (QTIP) trust. In that case, Harriett Mellinger owned a block of Frederick’s of Hollywood stock outright, while a second block was held by a QTIP trust for her benefit. While she received income from the trust, she had no control over the ultimate distribution of the stock held by the trust. The obvious difference in the present case is that Aldo held a testamentary power of appointment over the 44.069% block of Ledyard stock.

The Tax Court held in favor of the IRS. The blocks of stock must be aggregated and valued as a single 94.069% interest.

Estate of Fontana v. Commissioner, 118 T.C. No. 16, 3-28-2002

Legal Lines

Beneficiary Not Disqualified for Facilitating Will

Date:7/1/2002

Cecilia was 76 when her husband died in 1988. Later that year, Cecilia hired local handyman Rick to repair her garage. Through 1994, Cecilia placed more and more responsibility on Rick, until he was eventually making $1,400 per week managing her properties and helping her with bills, bookkeeping, and other duties.

Cecilia had no children or other close relatives. In January 1995, she met with an attorney to draft a new estate plan that would leave everything to Rick and his wife, with Mr. Rice (a long-time tenant of a ranch owned by Cecelia) as contingent beneficiary if the couple predeceased her. According to the attorney, Rick was present and did much of the talking. Rick also provided lists of Cecilia’s assets. When the attorney asked Cecilia how she wished to leave her estate, she confirmed she wanted to leave it entirely to Rick and his wife. With Rick’s assistance and encouragement, Cecilia eventually executed the plan, which included a living trust, a pour-over will, grant deeds, and other documents. She died in May 1996.

Mr. Rice brought an action to declare the donative transfers to Rick and his wife invalid under the California Probate Code (§21350). California law presumptively disqualifies a person as the recipient of a donative transfer by instrument if he or she drafts the instrument, or if he or she has a fiduciary relationship with the transferor and “transcribes the instrument or causes it to be transcribed.” Mr. Rice contended that Rick fit these criteria, so Cecilia’s estate should pass to Mr. Rice.

The trial court agreed that Rick had a fiduciary relationship with Cecilia, but concluded that his assistance and encouragement did not constitute “causing” the instruments to be transcribed. Though Rick took part in “arranging for preparation” of the instruments, he did not prepare them himself or direct anyone else to do so. The California Supreme Court affirmed.

Rice v. Clark (Cal. No. S037456, 6-10-02)

Federal District Court Has Jurisdiction to Hear Challenge to Trust but Not Will

In April 1996, Mrs. Sianis executed a will and a trust, to which she transferred the majority of her property, worth about $430,000. The trust instrument named Sianis’s daughter Mary Jensen as trustee and provided that upon Sianis’s death, 25% of the value of the trust (but no more than $100,000) was to be distributed to Sianis’s son Chris, and the rest would go to Mary. One month after executing the will and trust, Sianis died without a agent agreement with the secretary of state.

Her will was informally probated in a Nebraska probate court. Pursuant to a pour-over provision in her will, the assets of her $83,000 estate were distributed to the trust. Chris executed a release in favor of the trust and received a distribution of $88,600. In the release, Chris indicated he did not believe his mother’s will was in harmony with the terms of the trust.

In January 1999, he filed an action claiming that his sister and her husband had fraudulently induced his mother into executing the will and the trust predominantly in their favor. A district court decided that Chris’s action was a disguised will contest, which should have been lodged in the Nebraska probate court, but dismissed the entire action on res judicata rather than jurisdictional grounds. In other words, the district court concluded that the probate court essentially had already settled the matter in the earlier proceeding. Chris appealed to the 8th Circuit.

The 8th Circuit agreed that any contest of the will would have to have been brought before the probate court. Since the federal courts lack jurisdiction to probate a will or administer an estate, the district court properly dismissed Chris’s claim concerning the will. However, the trust was a different issue. It was funded before Sianis died, and the probate court had no jurisdiction over it during the probate proceeding. Chris could not have challenged the validity of the trust before the probate court.

The 8th Circuit therefore ruled that the district court erred in dismissing Chris’s charge that Mary and her husband wrongfully induced Ms. Sianis into executing the trust instrument. The district court has jurisdiction to entertain the merits of that claim.

On a related note, a US Magistrate judge recently held that the government was entitled to the proceeds that an individual received as part of a settlement of a malpractice suit against the attorney who performed estate tax computation and asset valuation for his mother’s estate.

Check out my previous article here.

Attorney William Hackney provided legal services to the estate of Virginia Murphy, whose son William Murphy was the estate’s primary beneficiary and personal representative. Murphy later sued Hackney for alleged professional negligence that resulted in more than $1.2 million in taxes, penalties, and interest. Murphy brought suits both on behalf of the estate as personal representative and in his individual capacity as beneficiary. The parties settled both suits for about $130,000, but the US government claimed it was entitled to the entire amount.

Before the US Magistrate judge, Murphy argued that his claim to a portion of the settlement proceeds was superior to the government’s claim because of the dual capacity in which he brought the underlying suits. He claimed that the portion of the proceeds attributable to the suit he brought in his own capacity belonged solely to him, whereas the government’s tax lien was against the estate.

The US government argued that its claim to the entire settlement amount was superior to Murphy’s. Under Maryland law, the primary beneficiary of an estate does not have standing to sue the estate’s attorney in an individual capacity. Since Murphy did not have standing to sue in an individual capacity, the entire amount of the settlement proceeds were attributable to the suit he brought on behalf of the estate.

The judge agreed with the government and held that the settlement proceeds were estate property to which the government held superior claim

And here was my first post.

Slayer’s Statute Does Not Cause Killer to Forfeit Interest

On August 14, 2011, Iowa resident Willber Thomann murdered his wife JoAnn and then committed suicide. At the time of their deaths, the couple owned farmland and bank accounts in joint tenancy.

Flashback to my first post! and flashforward to my newest!

Under wills both spouses had executed in 1990, the survivor would receive all property owned by the first spouse to die. Since JoAnn had died first, Willbur would have inherited her share of their property shortly before killing himself, but Iowa’s “slayer’s statute” prevents a murderer from inheriting anything from his or her victim.

The executor of JoAnn’s estate requested a determination that all jointly held property of the couple was the property of JoAnn’s estate pursuant to the slayer’s statute. A district court agreed and held that JoAnn was the surviving owner of all jointly owned property as though Willbur had predeceased her. Willbur’s heirs appealed, arguing that the statute treats a murderer as predeceasing his victim concerning only the victim’s property. In other words, the statute did not force Willbur to forfeit his own interest in jointly held property. It merely prevents him from inheriting the interest of JoAnn.

The Iowa Supreme Court agreed with this interpretation and reversed the district court’s ruling.

In the Matter of the Estate of Thomann (IA Sup. Ct., No. 70 / 01-0664, 7-17-62)bad intent

Trust Designed to Protect Eligibility Still Countable

Date:8/5/2016

The Colorado Court of Appeals recently ruled that the assets of a trust created to hold a Medicaid beneficiary’s share of her husband’s estate are available to pay for her care, even though the trust was set up to protect her Medicaid eligibility.

A probate court established an elective-share trust for the benefit of Ruby Faller, an incapacitated Medicaid recipient, after the death of her husband. The trust was to receive any assets passing to Ruby from her husband, which amounted to $96,134. Any distributions from the trust would be restricted to protect her Medicaid benefits. The probate court also ruled that the trust property was not Ruby’s property and was not available to pay for her care.

The Colorado Department of Health Care Policy (DHC) appealed, contending that the probate court had erred. The trust assets, DHC argued, were countable in determining Ruby’s eligibility.

The Colorado Court of Appeals agreed and reversed the probate court’s ruling. According to the Court, state law only allows three types of trusts to be created for the specific purpose of maintaining eligibility for public benefits—income trusts, disability trusts, and pooled trusts. Each of these trust provisions states that “no person is entitled to payment from the remainder of the trust until the state medical assistance agency has been fully reimbursed for the assistance rendered to the person for whom the trust was created.” Ruby’s elective-share trust was not such a trust, and its assets are therefore countable.

Transfer to Interested Amanuensis Was Valid

California resident Austin Stephens had two children, Lawrence and Shirley. In 1989, Mr. Stephens executed a durable power of attorney naming Shirley as his attorney-in-fact. Lawrence moved to Colorado that same year, an event that troubled Mr. Stephens, who felt his son had left him at a crucial time. By 1990, Mr. Stephens had lost his eyesight and relied upon Shirley to read documents to him. At that point, Mr. Stephens decided to make a gift of his home to Shirley.

The deed was prepared, and in the presence of a witness, Mr. Stephens verbally instructed Shirley to sign his name to the document. She did so and had it notarized, but she was not in Mr. Stephen’s presence when she signed the deed. The County Recorder’s office contacted Mr. Stephens by phone, and he confirmed verbally that his intent in executing the deed was to transfer his property to Shirley as a gift. After the deed was recorded, it was delivered to Mr. Stephens’s residence, where he verbally acknowledged receiving it and instructed Shirley to place it in safekeeping.

After Mr. Stephens died, Lawrence filed a petition for probate of his father’s will and a petition to determine title and require transfer of the property to the estate. A trial court declared Shirley the sole owner of the property under the “amanuensis” rule, which provides that where the signing of the grantor’s name is done with the grantor’s express authority, the person signing the name is not deemed an agent but is instead considered a mere instrument of the grantor, and the signature is deemed to be that of the grantor and not of the agent.

In an apparent clash of state statutes, a Florida appeals court has ruled that a guardian is not required for an incapacitated individual who had executed a durable power of attorney.

A Florida woman was found to be incompetent during guardianship proceedings, but the trial court declined to appoint a guardian because she had executed a valid durable power of attorney for her husband and stepdaughter. The woman’s grandniece and grandnephew appealed. They contended that Florida state law requires a guardian to be appointed. The law states that “when an order is entered which determines that a person is incapable of exercising delegable rights, a guardian must be appointed to exercise those rights.”

The ward’s husband and stepdaughter argued that no guardian was needed because they held power of attorney to manage her affairs. Durable powers of attorney may survive the incompetency of the principal under Florida law, as in all states.

Like what you’ve read? Then flash forward to my next post on trust fund interests.

To dispel this apparent conflict, the Fourth District Court of Appeal pointed out another section of the law requiring that an order appointing a guardian must be “the least restrictive appropriate alternative….” The Court determined that the provisions require a guardian to be appointed only when no other lesser intrusion on the privacy of the ward will accomplish the purpose of protecting the ward’s property.

The ruling of the trial court was affirmed.

But the California Court of Appeal reversed, rejecting the amanuensis theory because the deed had not been signed in Mr. Stephen’s presence. Since Shirley’s power of attorney did not expressly include the power to make gifts of property, the deed was void.

The California Supreme Court disagreed and reversed again. The Court ruled that the amanuensis rule may be applied in cases where an agent signs a contract outside the presence of the grantor, even when the amanuensis is an interested party, as in this case. An “interested amanuensis” bears the burden of proving that his or her signing of the grantor’s name was not the product of fraud, duress, or undue influence. In this case, Shirley overcame that presumption.

Est. of Stephens (CA S.C., No. S095401, 7-25-02)