LeCraw v. LeCraw , 261 Ga. 98 ( 1991 )

Benham, Justice.

Appellant/executors of the estate of Julia Adams LeCraw sought judicial direction in the administration of the estate, and a declaratory judgment concerning a power of attorney executed by Mrs. Le-Craw in which she appointed her three sons as her attorneys-in-fact. Pursuant to the power of attorney, the three sons made monetary gifts on Mrs. LeCraw’s behalf to her children and their spouses, her grandchildren, and several close friends during the 13-month period between their appointment and Mrs. LeCraw’s death. This appeal follows the trial court’s ruling that the power of attorney authorized the sons to make the gifts.¹

Through the power of attorney, Mrs. LeCraw authorized her attorneys-in-fact to, among other things,

make deposits to and to make withdrawals from any accounts [she] might now or hereafter have with banks ... including but not limited to checking accounts, savings accounts . . .

and

To do any other thing or perform any other act, not limited to the foregoing, which I might do in person, it being intended that this shall be a general power of attorney.

The trial court found that, by making the gifts, the attorneys-in-fact were continuing Mrs. LeCraw’s pattern of gifts to the recipients and were taking sound steps to minimize the transfer tax liability on Mrs. LeCraw’s estate.² The trial court also found that Mrs. LeCraw was informed by her administrative assistant of the pending gifts while the checks were being prepared by the assistant, that Mrs. LeCraw voiced no objection, and that she accepted the thanks of several of the gift recipients. In addition, the trial court found that Mrs. Le-Craw was competent to and did review her business affairs on a daily basis, and that she understood estate and gift tax planning, having consulted with legal counsel on such matters. After acknowledging the dearth of Georgia authority on the matter, the trial court determined that the power of attorney executed by Mrs. LeCraw authorized the gifts made by the attorneys-in-fact. We agree.

“[A] formal power of attorney is subject to a strict construction,” and “general terms in it are restricted to consistency with the controlling purpose, and will not extend the authority so as to add new and distinct powers different from the special powers expressly delegated” [cits.], yet . . . “the agent’s authority shall be construed to include all necessary and usual means for effectually executing it.” [Johnson v. Johnson, 184 Ga. 783 (193 SE 345) (1937).]

In addition, ascertainment of the intent of the parties plays an important role in the construction of a power of attorney, as it does in construing any contract. Flake v. Fulton Nat. Bank of Atlanta, 146 Ga. App. 40, 42 (245 SE2d 330) (1978). Where, as here, the grantor of the power of attorney expresses in that document the desires that her business be transacted by her attorneys-in-fact and that the power of attorney be a general power, and the evidence is undisputed that the actions taken by the attorneys-in-fact, unobjected to by the grantor, continue the grantor’s practice of giving monetary gifts to the natural objects of her bounty and affection; that the exercise of the power to make gratuitous transfers by the attorneys-in-fact does not deplete the grantor of the assets necessary for her to live her accustomed lifestyle; and that the exercise of the power to make gifts to the natural objects of her bounty minimizes the estate transfer tax, a goal the grantor desired, we construe the general power of attorney executed by the grantor to include within it the power to make gratuitous transfers of property to the natural objects of the grantor’s bounty.

Citing Harrison v. Harrison, 214 Ga. 393 (105 SE2d 214) (1958); Thompson v. Thompson, 190 Ga. 264 (9 SE2d 80) (1940); State Hwy. Bd. v. Price, 174 Ga. 143 (162 SE 283) (1932); and Taylor v. Phillips, 147 Ga. 761 (95 SE 289) (1918), appellants assert that this court has ruled that Georgia law prohibits attorneys-in-fact from making gifts of the grantor’s property under any circumstances. None of those cases contains such a holding. The ruling in each case was based on its facts, and none of the cases involving gratuitous transfers had, as we have here, evidence of the grantor’s history for gift-giving; of the grantor’s awareness of and apparent acquiescence to the gift-giving; and that the recipients of the gifts were the natural objects of the grantor’s bounty. Therefore, none of those cases controls here.

Judgment affirmed.

All the Justices concur, except Weltner, Hunt and Fletcher, JJ., who dissent.

1 After an audit of the federal estate tax return, the Internal Revenue Service took the position that the power of attorney did not authorize the sons to make the gifts and that the $650,000 so distributed was part of Mrs. LeCraw’s estate. This precipitated the executors and attorneys-in-fact to seek direction and a declaratory judgment.

2 Mrs. LeCraw left an estate in excess of $1,000,000, which estate did not include the gifts currently in dispute.