In re Estate of Palermini

Decision Date02 August 2021
Docket Number82048-6-I
CourtWashington Court of Appeals
PartiesIn the Matter of the Estate of ZORA P. PALERMINI, Deceased. v. DOMINIQUE JINHONG, individually, and Co-Trustee of the Zora P. Palermini Revocable Living Trust, Appellant. GEORGE BRALY, Personal Representative of the Estate of Zora P. Palermini and Co-Trustee of the Zora P. Palermini Revocable Living Trust, Respondent,

UNPUBLISHED OPINION

BOWMAN, J.

In the months before and after Zora "Polly"[1] Palermini's death, her granddaughter Dominque Jinhong misappropriated nearly all the assets in the estate of Zora P. Palermini (Estate) by falsifying documents, misrepresenting her authority, exerting undue influence over Polly as a vulnerable adult, and exploiting her fiduciary powers. The Estate successfully petitioned under the Trust and Estate Dispute Resolution Act (TEDRA), chapter 11.96A RCW, to recoup Polly's assets and disinherit Jinhong. Jinhong appeals arguing the trial court committed a series of evidentiary errors and reached conclusions of law that sufficient facts do not support. We affirm.

FACTS

Polly planned for her death thoughtfully and carefully. As a widow with two disabled adult sons, Matthew "Matt" Palermini and Louis Daniel "Dan" Palermini [2] Polly knew she would have to protect her assets for their long-term care.[3] Despite being "strong-willed" and "independent," Polly valued family and personal relationships. Though estranged from her daughter Jonnie Polly maintained a relationship with one of Jonnie's daughters, Dominique Jinhong, a lawyer and administrative law judge.

Polly's paramount concern to provide for Matt and Dan's needs was clear to everyone she knew. She lived frugally and saved as much as possible. In 1991, Polly used estate planners to create and maintain the Zora P. Palermini Revocable Living Trust (Trust) for the benefit of her sons. Polly intended all of her assets to transfer to the Trust after her death. She also created a "pour-over will" that transferred any assets in her name into the Trust when she died.

In 2010, Polly began working with attorney and estate planner John Kenney to manage her Estate. Against Kenney's advice, Polly insisted on appointing a friend and Jinhong as co-fiduciaries that must agree unanimously to act because of "trust issues" with her family.[4]

In October 2016, Polly met with Kenney to make changes to her Estate plan. Polly replaced one of the co-trustees with her accountant George Braly, who she considered "very trustworthy."[5] She executed a "Certification of Trust," naming Jinhong and Braly as joint successor trustees if she died, became incapacitated, or otherwise initiated a transfer of Trust powers. Two Morgan Stanley accounts held the Trust funds with a combined value of $802 478.

Polly also removed Jinhong's sister from the list of contingent beneficiaries and split that portion between her neighbors' two sons. Polly kept Matt and Dan as the primary beneficiaries of the Trust and decided that if one of her sons died, his share would go to the other son. None of the contingent beneficiaries would inherit under the Trust unless both sons died. Polly's Estate plan also provided that Jinhong could buy Polly's house at 90 percent of its fair market value. Polly decided against gifting her house to Jinhong because she wanted the proceeds from the sale of the house to remain in the Trust for the benefit of Dan and Matt.

Kenney also prepared and notarized a 20-page "General Durable Power of Attorney" (DPOA) for Polly. The DPOA appointed Jinhong and Braly as co-agents to make decisions on Polly's behalf "by unanimous consent" only. According to Kenney, the DPOA would authorize Polly's co-agents to transfer property to her Trust, make withdrawals from her retirement assets, or "do anything else that you want your agents to do for you to take care of you in the event that you become unable to effectively manage your property or financial affairs." Polly could activate the DPOA by signing a "Certification of Authorization by Principal," which she kept, unsigned, for future use. When Kenney prepared the 2016 documents, he had a copy machine that could not produce color copies. He made a black and white copy of the documents and gave all the originals except the will, to Polly in a three-ring binder.

Polly also maintained a KeyBank checking account that received "automatic direct deposits from [S]ocial [S]ecurity, [V]eterans[ ] [A]dministration, and civil service for the benefit of Polly, Matt and Dan." At the end of November 2017, the account had a balance of $181, 081.

Polly became increasingly ill toward the end of 2017. She was 88 years old and suffered from congestive heart failure, among other conditions, and understood her condition was terminal. In December 2017, Polly was admitted to a long-term skilled nursing facility and Jinhong began taking an active role in Polly's affairs. Jinhong took Polly to KeyBank to designate herself as the "Payable on Death" beneficiary on the account so that she could "pay bills for the boys."

On December 2, 2017, Polly executed the single-page Certification of Authorization by Principal form prepared by Kenny in 2016, triggering the 2016 DPOA. But before Polly executed the authorization, Jinhong drafted a new DPOA, purportedly signed by Polly and notarized by Jinhong. The new document differed significantly from the original DPOA Kenney created for Polly. It named Braly as a successor agent rather than a co-agent, giving Jinhong sole authority to manage Polly's affairs.

On December 13, 2017, Jinhong took control of Polly's KeyBank account by presenting the new DPOA to KeyBank officials. She attached the new DPOA to an altered version of the Certification of Authorization by Principal. The altered document did not match the original certificate in Polly's three-ring binder and completely omitted the "Certification of Authorization by Principal" heading.

Jinhong then tried to access Polly's Trust accounts, telling Morgan Stanley the money was needed "to fund Polly's long-term care." She made three attempts to access Polly's funds. First, she scanned and e-mailed Morgan Stanley the 2016 DPOA that Kenney drafted. But Morgan Stanley rejected the document as insufficient authorization to access Polly's accounts. Later that same day, Jinhong scanned and e-mailed the "updated" 2017 DPOA she drafted, naming herself as Polly's sole agent. Again, Morgan Stanley rejected the document as insufficient authorization to access Polly's accounts.

Three days later, Jinhong forged and e-mailed to Morgan Stanley a Certification of Trust that removed Polly as trustee and named herself sole trustee over Polly's accounts. The certification conflicted with other Trust documents identifying Braly and Jinhong as co-trustees and differed from the Certification of Trust that Kenney prepared in 2016 and kept in his files. While Jinhong's altered Certification of Trust bore Kenney's signature, he later testified he "would never" sign two different versions of the document. The forged document also showed physical signs that it was not created along with the other Estate documents kept in Polly's three-ring binder. It did not have visible three-hole-punch shading and omitted certain words from Kenny's version. Forensic document examiners and handwriting experts hired by the Estate later concluded that the forged Certification of Trust contradicted the other Trust documents, contained altered signatures, and was created using a color-capable copy machine, which Kenney did not have in 2016. But unaware of the forgery, Morgan Stanley accepted the Certification of Trust as sufficient authority for Jinhong to access Polly's Trust accounts.

Jinhong then prepared and "convinc[ed]" Polly to sign a quit claim deed to Polly's house and a zero-interest promissory note, transferring ownership of the house from the Trust to Jinhong for $1 to be paid after Polly's scheduled date to end her life under the Washington Death with Dignity Act (DDA), chapter 70.245 RCW. On January 8, 2018, Jinhong recorded the house "as a gift."

Sadly, on January 9, Polly's son Dan died. Then, utilizing the DDA, Polly took her life on January 12, 2018 by self administering fatal medications. At the time of her death, Polly was under hospice care at the skilled nursing facility.

Records showed that between December 27, 2017 and January 31, 2018, Jinhong withdrew $91, 433 from Polly's KeyBank account to pay her personal debt. She then liquidated Polly's Morgan Stanley accounts and moved the Trust funds into the KeyBank account, creating "the appearance to Morgan Stanley that the transfers were made for the benefit of Polly" and supporting Jinhong's "representations that the funds were for Polly's benefit." The transfer triggered capital gains taxes of more than $188, 000. On January 31, 2018, Jinhong withdrew $706, 029 from Polly's KeyBank account as a cashier's check payable to herself. She used none of the funds to pay for Polly's medical care.

Jinhong presented the altered Certification of Trust to Braly and explained that she was now the sole trustee of Polly's Trust accounts. Braly contacted Kenney, who felt "[i]t was clear" that Jinhong gave Braly "false" documents. On May 10, 2018, Braly as personal representative (PR) of the Estate and co-trustee of the Trust petitioned under TEDRA to recover Polly's assets, remove Jinhong as trustee, and remove Jinhong as a beneficiary, alleging that Jinhong breached her fiduciary obligations. Jinhong responded that she was acting according to Polly's instructions under the "later" 2017 DPOA and authorized to manage Polly's assets.[6]

Jinhong moved for partial summary judgment, which the trial court denied. After a three-week bench trial, the...

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