The below article was published in the May 2019 Edition of the Elder Law & Special Needs Journal of Wisconsin
Thompson v. Thompson, 2018AP93 (Wis. Ct. App. Jan. 15, 2019 [unpublished]), a recent unpublished opinion from the Wisconsin Court of Appeals, was extremely short (six paragraphs) by the court’s standards. However, in the small amount of space it took up, the court clarified a misconception held by many, and solidified the law as it relates to misconduct by an agent on a financial power of attorney.
The Case and Ruling
Mark Thompson filed a petition under Wis. Stat. section 244.16, requesting an accounting and judicial review of the conduct of his brother, Jeffrey Thompson. Jeffrey served as power of attorney for their mother, Mae Thompson. Mae Thompson executed a power of attorney in 2006, appointing Jeffrey as her agent. Jeffrey acted as power of attorney from Aug. 12, 2009, until Mae’s death March 31, 2016. Jeffrey was also acting as trustee of Mae’s revocable trust. The petition filed by Mark alleged that Jeffrey may have breached his fiduciary duty to Mae to the detriment of her heirs, specifically because he had “failed to make any annual accounting … or his stewardship” as Mae’s power of attorney. The circuit court dismissed the case for lack of subject matter jurisdiction, asserting that the probate court had exclusive jurisdiction over administration of Mae’s trust and that the petitioner was requesting an accounting as beneficiary of the trust. The appellate court affirmed, but on different grounds. The appellate court concluded that no relief can be granted under any set of facts that plaintiff can prove in support of his allegations, and that the case is dismissed upon failure to state a claim. The court found that section 244.16(1) requires that the petition be filed while the principal is alive – because the principal cannot be present nor have legal residence in Marathon County if she was dead. Since Mae had died prior to the petition being filed, Mark could not file a petition under section 244.16. Additionally, since a power of attorney terminates at death under Wis. Stat. section 244.10(1)(a), there is no agent whose conduct can be reviewed. Where does this ruling leave those who believe an agent under a power of attorney has misappropriated funds either negligently, recklessly, or intentionally?
Not Without Options
Most practitioners would agree that this ruling correctly applied section 244.16 to the facts, but that surviving heirs of a deceased principal are not without options. The most common options are to either: • file a petition under Wis. Stat. section 244.14(8)(d). This allows a “personal representative or successor in interest to a principal’s estate” to obtain an accounting from a decedent’s agent under a power of
attorney. This seems to be the most common way to investigate the actions of an agent post-death; or • file a tort action for breach of fiduciary duty or conversion, etc., against the agent. This would require an Estate to be opened, because the claims would likely rest with the deceased principal (the Estate) and not directly with the beneficiary. The correct option, or combination of options, depends entirely on the circumstances of the case and should be evaluated carefully.
A Wake-up Call
So, while the Thompson decision is not an entirely new interpretation of law, it should serve as a wake-up call to practitioners and other aggrieved persons to be careful how they approach the court with their issues. There are a host of statutes that one can rely upon to get into court, but they won’t all result in a satisfactory outcome.