Stafford v. Crane

F I L E D
United States Court of Appeals
Tenth Circuit

SEP 3 2004
PUBLISH

UNITED STATES COURT OF APPEALS PATRICK FISHER
Clerk
TENTH CIRCUIT

L.J. STAFFORD, a/k/a JAY
STAFFORD,

Plaintiff-Appellee,
v. No. 03-3067
CAROL JANE CRANE, Trustee of the
L.J. Stafford Irrevocable Trust,

Defendant-Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
(D.C. No. 01-CV-2536-KHV)

Submitted on the briefs:

W. Greg Wright, Hill, Beam-Ward, Kruse & Wilson, LLC, Overland Park, Kansas
for Plaintiff-Appellee.

Leonard L. Wagner and Anne W. Schiavone, Husch & Eppenberger, LLC, Kansas
City, Missouri for Defendant-Appellant.

Before KELLY, MCKAY , and HENRY , Circuit Judges.

HENRY , Circuit Judge.
 In September 1999, Plaintiff L.J. Stafford executed a durable power-of-

attorney, naming his two sisters his lawful attorneys-in-fact. In April 2000, the

sisters used the power-of-attorney to commit Mr. Stafford to a lock-down

Alzheimer’s unit and to create an irrevocable trust for Mr. Stafford. Defendant

Carol Jane Crane, Mr. Stafford’s niece, assumed the role of trustee. In September

2000, Mr. Stafford filed a habeas corpus petition, seeking release from the

Alzheimer’s unit. He was judged mentally competent and released to the care of a

nursing home, due to his physical condition.

Mr. Stafford then filed this diversity action against Ms. Crane in the federal

district court for the District of Kansas, seeking a declaratory judgment that the

trust was void ab initio and seeking the return of all property received by the

trust. Before trial, the parties filed a joint motion and stipulation, which was

accepted by the district court, declaring the trust null and void as of May 9, 2002.

After a bench trial, the district court found for Mr. Stafford, holding that (1) the

trust was void ab initio because the durable power-of-attorney did not expressly

authorize the attorneys-in-fact to create the trust for Mr. Stafford, and therefore

(2) all disbursements which had been made by Ms. Crane as trustee were

misappropriations, except to the extent that Mr. Stafford conceded that he himself

would have paid the bills for which the disbursements were made. The court

ordered Ms. Crane to pay back the challenged disbursements, with interest.

2
 In this appeal, Ms. Crane contends that (A) the parties’ pre-trial stipulation

that the trust was null and void as of May 9, 2002, barred Mr. Stafford’s claim at

trial that the trust was void ab initio, and (B) Mr. Stafford’s attorneys-in-fact had

the authority to create the irrevocable trust on his behalf. For substantially the

same reasons as the district court, we AFFIRM.

I. BACKGROUND

Mr. Stafford, aged 92 at the time of trial, is a long-time resident of Keyes,

Oklahoma. On September 17, 1999, Mr. Stafford executed a durable power-of-

attorney, appointing two of his sisters, Billie Jo Stafford and Juanita Jankowski

his lawful attorneys-in-fact. See Aplt’s App. vol. I, at 30. The power-of-attorney

authorized Ms. Stafford and Ms. Jankowski to manage Mr. Stafford’s property but

did not expressly grant authority to the attorneys-in-fact with respect to the

creation, amendment, or revocation of trusts.

Subsequently, on April 6, 2000, Mr. Stafford executed a durable medical

power-of-attorney, appointing Billie Jo Stafford as his agent for health care

decisions. See id. at 33. The following day, Billie Jo Stafford used the durable

medical power-of-attorney to involuntarily admit Mr. Stafford to the Morton

County Geriatric Hospital and Psychiatric Center in Elkhart, Kansas. On April

20, 2000, she transferred him to a locked-down Alzheimer’s unit at the Southeast

3
Colorado Hospital and Long Term Care Center in Springfield, Colorado. That

same day, she executed a document titled “L.J. Stafford Irrevocable Trust”

(“Trust”).

The Trust purported to be an agreement between Mr. Stafford as settlor and

his niece, Barbara Ann Hinds, as trustee. It provided that

(a) During the lifetime of the Settlor, the Trustee shall pay or
apply so much of the income from the trust estate as well as any amount
from the principal of the trust which the Trustee, under his sole
discretion, deems necessary for the care, comfort, health and welfare
(including living, residential, medical and health, legal and general
welfare) of Settlor. . . .
(b) Within a reasonable time after the death of Settlor, Trustee
shall distribute the trust corpus and any accumulated income to the
estate of the Settlor outright in fee simple absolute.

Id. at 35-36. The Trust included Mr. Stafford’s real estate in Cimarron County,

Oklahoma, and Baca County, Colorado, which had an approximate value of

$3,000,000, and certificates of deposit at banks in Kansas and Oklahoma, totaling

nearly $1,000,000.

Billie Jo Stafford executed the Trust in Kansas, and it stated that it shall be

governed and construed under Kansas law. The Trust named Ms. Crane as

successor trustee if Ms. Hinds ceased to serve as trustee. Almost immediately

after she assumed the position of trustee, Ms. Hinds did cease to serve, and Ms.

Crane took over. Ms. Crane acted as trustee until May 9, 2002, when the parties

jointly stipulated that the Trust was null and void. While Ms. Crane was trustee,

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she made numerous disbursements from the Trust.

Mr. Stafford was in the Alzheimer’s unit from April until September 2000.

During this time Billie Jo Stafford, another sister, and a brother filed a petition in

the Baca County, Colorado District Court, requesting the appointment of Ms.

Crane as Mr. Stafford’s guardian and conservator. Also during this time, Mr.

Stafford filed a habeas corpus petition in the Baca County court against his family

and the Southeast Colorado Hospital seeking his release from the locked-down

Alzheimer’s facility.

The Baca County court consolidated the guardianship petition and the

habeas action and appointed an independent psychiatrist to evaluate Mr. Stafford.

The psychiatrist found Mr. Stafford to be oriented, intelligent, capable of giving a

good history, and not depressed or in need of sedating tranquilizers. On August

8, 2000, based on the psychiatrist’s recommendation, the court ordered that Mr.

Stafford’s medications be gradually reduced and discontinued. On September 12,

2000, the court ordered that Mr. Stafford be released from the Alzheimer’s unit

and moved to either a nursing home or home health care, because even though he

was competent, he had physical infirmities and could not properly care for

himself. The court appointed Ms. Crane as temporary guardian, but allowed Mr.

Stafford to nominate an acceptable replacement guardian.

On November 8, 2001, Mr. Stafford filed this suit against Ms. Crane in the

5
federal district court for the District of Kansas. He sought a declaration that the

Trust was void ab initio. Additionally, he sought the return of his nearly

$4,000,000 in property from the Trust and reimbursement for funds appropriated

by Ms. Crane.

Prior to trial, the parties filed an agreed order and stipulation, which

“declare[d] the ‘L.J. Stafford Irrevocable Trust’ dated April 20, 2000, null and

void” and provided for all assets in the purported irrevocable Trust to be

transferred to the new “L.J. Stafford Revocable Trust Agreement.” Id. at 68-69

(Order Declaring Trust Void, filed May 9, 2002). The order also set forth the

following findings of fact and conclusions of law:

[Mr. Stafford] has denounced the purported L.J. Stafford Irrevocable
Trust since its execution. . . [;] [t]here remains an issue as to whether
[Ms. Crane] has misappropriated any assets or income of the purported
trust during the time period she has served as trustee . . . [;] [and] [t]his
Court retains jurisdiction . . . to determine [Mr. Stafford’s] damages
from misappropriations of the purported trust’s assets by [Ms. Crane].

Id. at 69.

When the parties appeared for trial, Mr. Stafford’s counsel advanced the

argument that the Trust was null and void ab initio – i.e., that it was never a valid

trust from its execution in April 2000 – making all of the expenditures by Ms.

Crane misappropriations. Ms. Crane objected, arguing that this claim was barred

because Mr. Stafford’s counsel signed the parties’ joint stipulation, and the

stipulation did not preserve Mr. Stafford’s claim that the Trust was void ab initio.

6
The district court disagreed, finding that the stipulated order did not address that

claim and that the court had retained jurisdiction to determine the extent of Mr.

Stafford’s damages from the alleged misappropriation of trust assets.

The district court then concluded that the Trust was void ab initio because

the durable power-of-attorney did not specifically authorize the attorneys-in-fact

to create a trust on Mr. Stafford’s behalf. Accordingly, the district court found

that all of Ms. Crane’s expenditures as trustee, excepting those that Mr. Stafford

conceded he would have made himself, were misappropriations, and the court

ordered Ms. Crane to repay them, with interest, to Mr. Stafford.

We hold that (A) the pre-trial stipulation did not settle the dispute over

whether the Trust was void ab initio, so the district court did not err in addressing

the claim, and (B) the purported Trust was void ab initio because Mr. Stafford’s

power-of-attorney did not explicitly grant his attorneys-in-fact the authority to

create a trust on his behalf. Therefore, we affirm the district court’s judgment.

II. DISCUSSION

A. Did the parties’ pre-trial stipulation that the Trust was null and void
as of May 9, 2002, bar Mr. Stafford’s claim at trial that the Trust was
void ab initio?

On appeal, Ms. Crane first argues that “the district court erred in

determining the issue of the status of the L.J. Stafford Irrevocable Trust . . . when

7
the parties had by their agreement and through a stipulated order resolved the

issue of the status of the Trust prior to trial.” Aplt’s Br. at 19. She contends that

Mr. Stafford abandoned his argument that the Trust was invalid from its inception

by stipulating that the Trust was null and void as of May 9, 2002, and by failing

to specifically reserve the issue for trial.

1. Applicable Law and Standard of Review

We examine the district court’s interpretation of the stipulation de novo.

See Scrivner v. Sonat Exploration Co., 242 F.3d 1288, 1291 (10th Cir. 2001)

(construing settlement agreement de novo); Liggatt v. Employers Mut. Cas. Co.,

46 P.3d 1120, 1129 (Kan. 2002) (holding that the interpretation of a contract is a

legal question). Generally, “[t]his court is . . . reluctant to relieve parties from

the benefits, or detriments of their stipulations.” L.P.S. v. Lamm, 708 F.2d 537,

539-40 (10th Cir. 1983). The primary rule is to ascertain the intent of the parties.

Homestake-Sapin Partners v. United States, 375 F.2d 507, 511 (10th Cir. 1967);

Liggatt, 46 P.3d at 1125. However, a stipulation is not ambiguous merely because

the parties disagree as to its interpretation. Homestake-Sapin Partners, 375 F.2d

at 511; Marshall v. Kansas Med. Mut. Ins. Co., 73 P.3d 120, 130 (Kan. 2003).

2. The Parties’ Stipulation

We have carefully reviewed the language of the joint stipulation that the

parties submitted to the court for approval. Despite the parties’ differing views as

8
to the total effect of the agreement to render the Trust null and void as of May 9,

2002, we hold that its terms are clear and unambiguous. With regard to the status

of the Trust, the stipulation resolves that

[t]he parties agree and stipulate that the L.J. Stafford Irrevocable Trust
. . . is null and void. The parties agree that all real property, personal
property and all other assets of any kind that are under the ownership
or control of the purported L.J. Stafford Irrevocable Trust shall be
immediately transferred to the L.J. Stafford Revocable Trust
Agreement.

Aplt’s App. vol. I, at 55 (Joint Motion and Stipulation for Order Declaring Trust

Void, Requiring Final Accounting and Retaining Jurisdiction to Adjudicate

Damages, filed April 24, 2002). Nowhere does the stipulation or the resulting

court order state that the parties have agreed that the Trust was at any time valid

or that it was not void ab initio. In the absence of such language, we cannot find

that Mr. Stafford waived his right to litigate the issue. A party’s waiver of the

right to assert a claim must be knowing and voluntary. See Torrez v. Pub. Serv.

Co. of New Mexico, Inc., 908 F.2d 687, 689 (10th Cir. 1990); City of Topeka v.

Watertower Place Dev. Group, 959 P.2d 894, 901 (Kan. 1998) (“Waiver implies

that a party voluntarily and intentionally [gave] up a known right or [took] some

action inconsistent with the contractual right.”).

Moreover, the clear, unambiguous language of the stipulation indicates that

although the parties agreed to declare the Trust null and void as of May 9, 2002,

the parties did not agree regarding the Trust’s prior status. The stipulation

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consistently refers only to the “purported” Trust, Aplt’s App. vol. I, at 54-56, and

expressly states that Mr. Stafford “has denounced the purported L.J. Stafford

Irrevocable Trust since its execution.” Id. at 55. Had Mr. Stafford waived his

claim that the Trust was void ab initio, this language would be superfluous and

contrary to the agreement. Additionally, under the stipulation the district court

“retain[ed] jurisdiction . . . to determine [Mr. Stafford’s] damages from

misappropriations of the purported trust’s assets by [Ms. Crane].” Id. at 69. We

agree with the district court that this jurisdiction “necessarily embrac[ed] the

issue whether the trust was void ab initio,” id. at 102 (Mem. Order, filed Dec. 30,

2002), as it encompassed the possibility that the court would find that all of Ms.

Crane’s disbursements were misappropriations because the Trust was invalid from

its inception. From the plain language of the stipulation, the only issue resolved

was that the Trust was null and void; nothing in the stipulation or the order speaks

to the creation of the Trust or its status previous to the stipulation.

We disagree with Ms. Crane’s argument that stipulating that the Trust was

null and void as of May 9, 2002, was inconsistent with or preclusive of a claim

that the Trust was void ab initio. A determination of the former does not include

a determination of the latter. Black’s defines “null” as “[h]aving no legal effect;

without binding force; VOID,” noting that “[t]he phrase null and void is a

common redundancy.” B LACK ’ S L AW D ICTIONARY 1098 (8th ed. 2004). In

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contrast, Black’s defines “void ab initio” as “[n]ull from the beginning, as from

the first moment when a contract is entered into.” Id. at 1604. The parties’

agreement to declare the Trust null and void as of May 9, 2002, merely rendered

any purported Trust without legal or binding effect as of that date, thereby ending

Ms. Crane’s control over Mr. Stafford’s property and allowing him to transfer the

property into a trust of his own creation. This declaration did not, by its terms,

constitute an agreement that the Trust was either valid or invalid from its

inception.

Ms. Crane’s argument that “a valid settlement agreement is final and

conclusive as between the parties for all pre-existing claims directly tied to the

settled dispute” is inapposite. See Aplt’s Br. at 26. The issue of whether the

Trust was void ab initio is not a “pre-existing claim” that is “directly tied” to the

agreement to render the Trust null and void as of May 9, 2002. Compare In re

Engels, 692 P.2d 400, 404 (Kan. Ct. App. 1984) (holding that a settlement

agreement to withdraw a competing will barred a subsequent attempt to recover

attorney’s fees incurred in the process of offering the withdrawn will because “the

agreement was clearly intended to settle the will contest, and [these attorney] fees

. . . were directly tied to that contest.”) (emphasis added) and Cent. Kan. Credit

Union v. Mut. Guar. Corp., 886 F. Supp. 1529, 1538 (D. Kan. 1995) (holding that

“a settlement agreement finally determines the amount in dispute and bars a later

11
attempt to litigate that amount”). Ms. Crane asserts that this interpretation of the

joint stipulation makes “any benefit to [Ms.] Crane from the settlement . . .

illusory at best.” Aplt’s Br. at 29. However, she overlooks the fact that rendering

the purported Trust null and void freed her from her fiduciary duties to Mr.

Stafford and put an end-date on his claims for damages resulting from the alleged

misappropriations of his funds or property.

Ms. Crane makes much of the fact that Mr. Stafford’s attorney “conceded

[that] he had drafted a stipulation originally including language stating that the

Trust was null and void ab initio” and that “[Ms.] Crane’s attorney refused to

agree the Trust would be declared void ab initio, and consequently [Mr.]

Stafford’s attorney agreed the phrase ‘ab initio’ could be taken out.” Id. at 20.

However, these negotiations over the stipulation merely underline the fact that

Mr. Stafford has consistently asserted his claim that the Trust was void ab initio.

They do not, contrary to Ms. Crane’s contentions, establish that Mr. Stafford

agreed to abandon this claim. This exchange between the lawyers and the

resulting stipulation declaring the Trust null and void and remaining silent on the

ab initio issue are consistent with our conclusion that the matter was left open for

determination by the court.

Accordingly, we hold that the parties’ pre-trial stipulation that the Trust

was null and void as of May 9, 2002, did not bar Mr. Stafford’s claim at trial that

12
the Trust was void ab initio. Therefore, the district court did not err in

considering the claim.

B. Did Mr. Stafford’s Attorney-in-Fact Have the Authority to Create an
Irrevocable Trust on His Behalf in the Absence of an Express Grant of
Authority in the Power-of-Attorney?

It is undisputed that Mr. Stafford executed a durable power-of-attorney

appointing his sister, Billie Jo Stafford, as one of his lawful attorneys-in-fact. It

was in this capacity that Billie Jo Stafford established the Trust on Mr. Stafford’s

behalf. The district court strictly construed the power-of-attorney and found that

because it did not specifically authorize Billie Jo Stafford to create an irrevocable

trust on Mr. Stafford’s behalf, the Trust was void ab initio. Ms. Crane contends

that the district court’s finding was in error because “the power of attorney gave

very broad and explicit power to the attorney-in-fact to act in plaintiff Stafford’s

stead with respect to all property of the plaintiff and in all financial matters, such

that the creation of the Trust was within the power of the attorney-in-fact.” Id. at

32. We disagree.

1. Applicable Law and Standard of Review

In order to resolve this issue, we must examine both Oklahoma and Kansas

law. We begin with the choice of law rules of the forum state, see Vitkus v.

Beatrice Co., 127 F.3d 936, 941 (10th Cir. 1997), which inform us that the

principle of lex loci contractus controls. Dragon v. Vanguard Indus., 89 P.3d

13
908, 914 (Kan. 2004). “In most instances, this means courts apply the substantive

law of the state where the contract was made.” Id.

Here, Mr. Stafford’s power-of-attorney was executed and filed in

Oklahoma, and is therefore governed by Oklahoma law. On the other hand, the

the Trust was executed in Kansas, and states that it shall be governed by Kansas

law. Aplt’s App. vol. I, at 40-41. We thus look to the Kansas courts in

determining how to interpret that instrument. Davis v. Miller, 7 P.3d 1223, 1229

(Kan. 2000) (applying a contract’s choice of law provision).

As to both instruments, “[w]hen the facts are undisputed, this Court

reviews the district court’s interpretation of [them] . . . de novo.” U.S. Fid. and

Guar. Co. v. Federated Rural Elec. Ins. Co., 286 F.3d 1216, 1218 (10th Cir.

2002); In re Estate of Somers, 89 P.3d 898, 902 (Kan. 2004). However,

as the district court recognized, “neither Kansas law . . . nor Oklahoma law . . .

specifically address [sic] whether an attorney in fact may create an irrevocable

trust without express language which grants such authority in the durable power

of attorney itself.” Aplt’s App. vol. I, at 104. Therefore, we must “consider a

number of authorities, including analogous decisions by the [state] Supreme

Court, the decisions of the lower courts in [the state], the decisions of the federal

courts and of other state courts, and the general weight and trend of authority.”

Progressive Cas. Ins. Co. v. Engemann, 268 F.3d 985, 988 (10th Cir. 2001)

14
(internal quotation marks omitted).

2. Powers of the Attorney-In-Fact

In Kansas, one of the elements necessary to the creation of a valid trust is

“[a]n explicit declaration and intention to create a trust.” Taliaferro v. Taliaferro,

921 P.2d 803, 808 (Kan. 1996). In this case, the purported settlor of the Trust,

Mr. Stafford, did not create the Trust himself. Rather, his attorney-in-fact, Billie

Jo Stafford, executed the purported Trust by signing her name to a trust

instrument above a signature line that reads “L.J. Stafford, by Billy [sic] Jo

Stafford, his attorney in fact.” Aplt’s App. vol. I, at 42. Without an explicit

declaration of intent by Mr. Stafford to give Billie Jo Stafford the authority to

create a trust on his behalf, the element of intent necessary to trust creation is

missing. Thus, we must determine whether Mr. Stafford’s durable power-of-

attorney conferred such authority upon Billie Jo Stafford as his attorney-in-fact.

In Oklahoma, 1

[a] durable power of attorney is a power of attorney by which a
principal designates another his attorney-in-fact in writing and the
writing contains . . . words showing the intent of the principal that the
authority conferred shall be exercisable notwithstanding the principal’s
subsequent disability or incapacity, and, unless it states a time of
termination, notwithstanding the lapse of time since the execution of the
instrument.

1
Both Oklahoma and Kansas have adopted statutes regarding the power-of-
attorney. See O KLA . S TAT . tit. 58, §§1071-1077; K AN . S TAT . A NN . §§ 58-650 to
665.

15
O KLA . S TAT . tit. 58 § 1072. The document granting the power-of-attorney may

“show . . . the extent and scope of the powers conferred” and “may grant complete

or limited authority with respect to the principal’s person . . . [or] property.” Id. §

1072.1 (A)(3), (B).

Under Oklahoma law, “the instrument creating the special [power-of-

attorney] agency will be strictly construed.” In re Rolater’s Estate, 542 P.2d 219,

223 (Okla. Ct. App. 1975). Additionally, “[i]n exercising granted powers, the

attorney is bound to act for the benefit of his principal avoiding where possible

that which is detrimental unless expressly authorized.” Id.; Bank IV, Olathe v.

Capitol Fed. Sav. & Loan Ass’n., 828 P.2d 355, 361 (Kan. 1992) (“[A]s a general

rule, powers of attorney are to be strictly construed.”). The power-of-attorney

designating Billie Jo Stafford as Mr. Stafford’s attorney-in-fact is broad and

grants her authority to perform most actions with regard to Mr. Stafford’s

property and finances. However, it does not expressly grant her the authority to

create, modify, or revoke trusts.

The general weight of authority suggests that the power to create, modify,

or revoke a trust is personal and non-delegable to an attorney-in-fact unless

expressly granted in the power-of-attorney. See Carolyn L. Dessin, Acting as

Agent Under a Financial Durable Power of Attorney: An Unscripted Role, 75

N EB . L. R EV . 574, 582 & n.38 (1996) (observing that “there are a few restrictions

16
on the acts that can be delegated to agents under durable powers of attorney,” but

“noting the following powers are frequently non-delegable: . . . funding a trust)

(citing Paul L. Sturgul, Financial Durable Powers of Attorney, 41 No. 5 Prac.

Law. 21, 29-30 (July 1995)). Several states have codified this rule. 2 The

2
See C AL . P ROB . C ODE § 4264 (“A power of attorney may not be construed
to grant authority to an attorney-in-fact to perform any of the following acts
unless expressly authorized in the power-of-attorney: (a) Create, modify, or
revoke a trust.”); F LA . S TAT . ch. 709.08(7)(b)5 (“[A]n attorney in fact may not . .
. [c]reate, amend, modify or revoke any document or other disposition effective at
the principal’s death or transfer assets to an existing trust created by the principal
unless expressly authorized by the power of attorney.”); M O . R EV . S TAT . §
404.710(6) (“Any power of attorney, whether durable or not durable, and whether
or not it grants general powers for all subjects and purposes or with respect to
express subjects or purposes . . . may grant power of authority to an attorney in
fact to carry out any of the following if the actions are expressly authorized in the
power of attorney: To execute, amend or revoke any trust agreement[.]”); N EB .
R EV . S TAT . § 30-3854(e) (“A settlor’s powers with respect to revocation,
amendment, or distribution of trust property may be exercised by an agent under a
power of attorney only to the extent expressly authorized by the terms of the trust
or the power.”); U TAH C ODE A NN . § 75-5-503 (“A power of attorney may not be
construed to grant authority to an attorney-in-fact or agent to perform any of the
following, unless expressly authorized in the power of attorney: (1) create,
modify, or revoke an inter vivos revocable trust created by the principal; (2) fund,
with the principal’s property, a trust not created by the principal or by a person
authorized to create a trust on behalf of the principal; (3) make or revoke a gift of
the principal’s property, in trust or otherwise[.]”); W ASH . R EV . C ODE §11.94.050
(“Although a designated attorney in fact or agent has all powers of absolute
ownership of the principal, or the document has language to indicate that the
attorney in fact or agent shall have all the powers the principal would have if
alive and competent, the attorney in fact . . . shall not have the power, unless
specifically provided otherwise in the document: To make, amend, alter, or revoke
any of the principal’s . . . trust agreements.”). See also Lisa H. Jamieson, Marital
Property Issues in the Modern Estate Plan, 49 B AYLOR L. R EV . 391, 411 (1997)
(suggesting that under the Texas probate code “an agent does not have the power
(continued...)

17
Uniform Trust Code, promulgated by the National Conference of Commissioners

on Uniform State Laws in 2000, takes the same position. See U NIF . T RUST C ODE

§ 602(e), available at http://www.law.upenn.edu/bll/ulc/uta/2001final.htm (“A

settlor’s powers with respect to revocation, amendment, or distribution of trust

property may be exercised by an agent under a power of attorney only to the

extent expressly authorized by the terms of the trust or the power.”).

The Restatement (Third) of Trusts also supports this narrow construction of

the power-of-attorney. Although it states that “[u]nder some circumstances, an

agent under a durable power-of-attorney or the legal representative of a property

owner who is under disability may create a trust on behalf of the property owner,”

R ESTATEMENT (T HIRD ) OF T RUSTS §11(5), the commentary to this section

indicates that this is only appropriate when the property owner is legally

incompetent. Id. at cmt. f (“Transfers of property belonging to . . . legally

incompetent adults may be made in the course of managing their financial affairs .

. . by the agent (attorney in fact) of an incompetent adult appointed and acting

under a durable power of attorney executed before the principal’s incapacity.”).

As Mr. Stafford was judged to be competent by the Baca County, Colorado

District Court, this provision does not support Ms. Crane’s actions.

2
(...continued)
to create a trust on behalf of the principal, only the right to fund a trust already
created by the principal”).

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 Moreover, several state courts have held that, in the absence of an express

grant of authority, an attorney-in-fact does not have the power to create a trust on

behalf of her principal. The reasoning of these decisions undermines Ms. Crane’s

argument here. See, e.g., In re Trust of Jameison, 8 P.3d 83, 87 (Mont. 2000)

(noting that “[t]he Power of Attorney [did] not specifically grant the authority to

create a trust, reflect [the beneficiary’s] intent to create a trust, or even mention a

trust” and that, as a result, “the Power of Attorney [did] not authorize [the

purported trustee] to transfer . . . property to herself as trustee and, as a result,

[the trust] was not properly created”); Kotsch v. Kotsch, 608 So. 2d 879 (Fla.

Dist. Ct. App. 1992) (strictly construing a power of attorney and concluding that

although the power of attorney granted authority to a son to manage the father’s

property during his lifetime, it did not authorize the disposition of the father’s

property by means of a trust).

Similarly, we find persuasive the reasoning of courts that have addressed

the analogous powers of attorneys-in-fact to revoke trusts created by the principal

and to make gifts of the principal’s property. These courts have also held that an

attorney-in-fact must be limited to performing only the powers that are expressly

granted in the power-of-attorney. See In re Guardianship of Lee, 982 P.2d 539,

541-42 (Okla. Ct. App. 1999) (holding that an attorney-in-fact did not have power

to revoke his principal’s revocable living trust when the power to revoke had been

19
specifically reserved to the principal in the trust instrument and not specifically

granted to the attorney-in-fact in the power-of-attorney); Muller v. Bank of Am.,

12 P.3d 899, 904 (Kan. Ct. App. 2000), (holding that “unless the settlor expressly

states otherwise in the trust document or the power of attorney, the power to

revoke a trust is personal to the settlor and is nondelegable”); In re Rolater’s

Estate, 542 P.2d at 223 (holding that a general power-of-attorney “carries with it

no authority to make a gift of the principal’s property in the absence of an explicit

direction”).

In conclusion, we hold that the Kansas and Oklahoma state courts would

follow the general weight of authority, strictly construing the power-of-attorney

and deeming the power to create trusts non-delegable in the absence of an express

grant of authority. Therefore, we hold that because the power-of-attorney

designating Billie Jo Stafford as Mr. Stafford’s attorney-in-fact did not expressly

authorize her to create a trust on his behalf, she lacked the power to do so.

III. CONCLUSION

We hold that (A) the parties’ stipulation that the Trust was null and void

did not bar Mr. Stafford’s claim at trial that the Trust was void ab initio, and (B)

Billie Jo Stafford lacked the authority as attorney-in-fact to create a trust on Mr.

Stafford’s behalf, making the Trust void ab initio. Accordingly, we AFFIRM the

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decision of the district court.

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