Uniform power of attorney for finances and property

The new uniform act supersedes both prior uniform acts. The person authorized to act is the "agent," and the person granting the authorization is the "principal." The durable power of attorney offers a method of surrogate decision making for persons whose modest assets may not justify incapacity planning with a trust. The durable power of attorney is also used to avoid guardianship.

This bill includes definitions and general rules that are not in current law. The term "incapacity" replaces the term "disability" used in current law. The bill's definition of "incapacity" is consistent with the standard for appointment of a guardian under current law. Under the bill, a power of attorney is durable unless it contains express language indicating otherwise. The bill also provides that, unless the principal specifies that the power of attorney is to become effective upon a future date or event, the authority of an agent becomes effective when the power of attorney is executed. Current law requires express language to make the power durable and is silent on when the agent's authority becomes effective.

The bill provides that the authority granted to a principal's spouse is revoked upon the commencement of proceedings for legal separation, marital dissolution, or annulment. The bill also provides that the authority granted to the principal's domestic partner is revoked if the domestic partnership is terminated. The bill also provides guidance where there is none in current law regarding the default rules for co-agents' and successor agents' reimbursement and compensation, an agent's acceptance of appointment, the agent's duties, and an agent's resignation. The bill sets out a comprehensive list of persons who may petition the court to review the agent's conduct, and addresses agent liability.

The bill includes a new provision that protects persons who in good faith accept an acknowledged power of attorney without actual knowledge that the power of attorney is revoked, terminated, or invalid or that the agent is exceeding or improperly exercising the agent's powers.

The bill specifies when a person may, in good faith, refuse to accept an acknowledged power of attorney. For example, a person may refuse if the power of attorney would be inconsistent with federal law, when the person has actual knowledge of the termination of the agent's authority, when the person believes the power of attorney is not valid, when the power of attorney becomes effective upon the occurrence of another event that the person does not have evidence of having occurred, and when the person has reasonable belief that the power of attorney is illegal. The bill allows a person whose power of attorney is not accepted to ask a court to order the other person to accept the power of attorney and to pay the costs and attorney fees incurred by the person seeking the court order.

The bill clarifies that the power of attorney is supplemented by the principles of common law to the extent those principles are not displaced by specific provisions and that the new statutory language is not intended to supersede any law applicable to financial institutions or insurance businesses. The bill further provides that the remedies under the bill are not exclusive and do not abrogate any other cause of action or remedy that may be available under current law.

The bill offers detailed descriptions of the authority under the power of attorney relating to subjects such as "real property," "retirement plans," and "taxes." A principal may, under the bill, incorporate a particular authority in full into the power of attorney either by a reference to the short descriptive term for the subject used in the bill or by a reference to the statutory section number. The bill also addresses concerns about certain types of authority that might be used to dissipate the principal's property or alter the principal's estate plan by listing specific types of authority that cannot be inferred from a grant of general authority, but which may be granted only through express language in the power of attorney. The bill contains a default rule prohibiting an agent, other than the principal's spouse or domestic partner, from making a gift to the agent or certain other persons. Current statutory language is silent on these issues.

Finally, the bill includes the statutory durable power of attorney form. As under current law, the statutory form is optional and is designed for use by lawyers as well as laypersons. The form in this bill contains, in plain language, instructions to the principal and agent. Step-by-step prompts are given for designation of the agent and successor agents, and the granting of of general and specific authority. In the section of the form addressing general authority, the principal must initial the subjects over which the principal wishes to delegate general authority to the agent.

The bill also contains a sample agent certification form.