Welcome to Edward Zetlin Law

Blog

google+ facebook twitter email print

The Virginia Uniform Power of Attorney Act

Jun 25, 2010 A Durable Power of Attorney (DPA) is an easy, private and legal way to appoint someone to manage your affairs if you become incapacitated. It is a document in which you, a Principal appoints an Agent, someone you trust, to act on your behalf. This document is durable since it endures. The Agent can continue to act even when the Principal becomes incapacitated.

Durable Power of Attorneys appear simple. Yet, this simplicity is deceptive. Parties subject to a DPA are increasingly going to court to have a judge define its terms. Third parties refuse to accept the DPA. In response, the Virginia General Assembly recently enacted the Virginia Uniform Power of Attorney Act to clarify issues that DPAs raise.

Below, are questions often asked by clients. I have provided answers in light of this new statute.

Q. How can I have a Durable Power of Attorney that assures me that my Agent will be able to step in if I am incapacitated?
A. Even if your document does not specifically state that the Agent has the power to act once you become incapacitated, it will be presumed that this is the case. However, it’s still a good idea to include durability language.

Q. How can I be sure that my Durable Power of Attorney will be accepted?
A. The law provides sanctions against third parties who unreasonable refuse to accept an acknowledge DPA. It also protects third parties who accept an acknowledged DPA in good faith. Acknowledgment means that the DPA was signed under notary seal.

Q. Are copies of my Durable Power of Attorney acceptable to third parties?
A. The new law provides that photocopies are valid except where specifically required by law such as recording.

Q. What duties does an Agent have when acting as Agent under Power of Attorney?
A. The new law lists certain mandatory duties on an Agent. An Agent must act in good faith; act within the scope of the authority granted; and act in accordance with the Principal’s reasonable expectations. Other duties include: act loyally, avoid conflicts of interests; act with care, competence and diligence; and keep records.

Q. How can I assure that my Agent can make gifts that I would have made if I were not incapacitated?

A. An express, specific grant of authority must be written into your Durable Power of Attorney for acts that pose a risk to your property and estate plan. In other words, if you would like your Agent to be allowed to make gifts of your property, you must draw up a Durable Power of Attorney that states this specifically.

Other powers that must be specifically granted an Agent include the powers to:
1. Create, amend, revoke or terminate an inter vivos trust;
2. Create or change rights of survivorship;
3. Create or change a beneficiary designation;
4. Delegate authority under a DPA.

Q. Is it necessary that the signatures on my Durable Power of Attorney be notarized? Do I need witnesses when I sign my Power of Attorney?

A. Although it’s not necessary it’s advisable to have your Power of Attorney notarized and witnessed. First, a notary is necessary to assure that your Power of Attorney is accepted by third parties. It’s also necessary if you need to record the Power of Attorney. If your Power of Attorney needs to be recognized outside of Virginia, your signature should be witnessed by two, unrelated, disinterested witnesses. Some states require that Powers of Attorney be witnessed and executed as though they are wills. Witnesses are also good if your capacity to execute the Power of Attorney is ever challenged. Should this occur, the witnesses can testify to your capacity at the time the Power of Attorney was signed.

Q. I have a Power of Attorney form I got off the web. Do I really need a lawyer?

A. Forms are good in that they enable non-lawyers to learn about Power of Attorney. The problem with forms is that they often have an array of boxes that can be checked. If you simply check boxes granting authority without a full understanding as to the power you are conveying, you can open yourself up to abuse by your Agent once the DPA becomes effective.

The penalties for a poorly drafted Power of Attorney are severe. Should the DPA fail a court can appoint a Guardian to make personal decisions for you and a Conservator to control your finances. This takes time and money – your money. Also, the court has the right to appoint strangers to these jobs, or people you might not approve of. Recently a client brought in a Power of Attorney her mother had gotten off the internet. The Power of Attorney was not notarized and it did not address the Agent’s authority over real property. She was not able to use the Power of Attorney to get a reverse mortgage for her mother. Instead, a conservatorship was required for the daughter to obtain use of the equity so that her mother could stay in the home. Had the proper Power of Attorney been executed the expense of the conservatorship could’ve been avoided.

google+ facebook twitter email print