Durable Power of Attorney

Vogt v. Warnock, 107 S.W.3d 778 (Tex. App.—El Paso 2003, pet. denied).


Principal designated Agent in his durable power of attorney. Agent knew about her appointment but she never exercised any authority which Principal granted to her. Later, Principal made many gifts to Agent and paid her to manage his personal and financial affairs. Some of these gifts were of property Principal had originally placed in a revocable trust in favor of Son. Agent was also named as the primary beneficiary of Principal’s will. After Principal died, Executor filed sued against Agent alleging breach of fiduciary duty under the durable power of attorney. The trial court found that some transfers were fair while others were unfair and therefore were set aside. Agent appealed.

The appellate court held that as a matter of law Agent stood in a fiduciary capacity to Principal even though she never acted under the durable power of attorney. Accordingly, Agent had the burden to prove that all of the Principal’s transfers to her were fair. However, the court agreed with Agent that it was unreasonable for the jury to conclude that certain gifts were unfair to Principal. Instead, the evidence was clear that all transfers were fair. There was no evidence showing that Principal did not understand his actions, was acting under undue influence, or that Agent exerted any pressure on him to make the transfers. It was irrelevant that the transactions were not fair from Son’s perspective.

Moral: Agents must be informed that they are subject to fiduciary duties toward the principal even if they do not exercise any authority under the power of attorney.