Durable Power of Attorney

Durable Power of Attorney means: a power of attorney that remains in effect even if the principal becomes incompetent.

Uniform Power of Attorney Act Developed to Address Problem Areas Associated With Durable Powers of Attorney

By Andrew H. Hook, Esq. Oast & Hook, P.C., Virginia Beach and Portsmouth, VA

There has been a recent explosion in the use of durable powers of attorney (DPAs) and resulting litigation. State courts are beginning to realize the need for guideposts to govern the fiduciary responsibilities of an agent so that agents can operate efficiently on behalf of the principal under a DPA, and also so that the principal is protected from abuse of the power and unnecessary court interventions and government intrusions are prevented.1

States have responded by revising their DPA statutes to address perceived problem areas. As the laws concerning DPAs continue to develop and evolve, the clear trend is the movement of DPAs from the common law toward statutory law. This trend is made evident by the promulgation of the Uniform Power of Attorney Act (UPOAA) by The National Conference of Commissioners on Uniform State Laws. The UPOAA is basically a set of default rules that preserves a principal’s freedom to choose both the extent of an agent’s authority and the principles to govern the agent’s conduct.2 Where the UPOAA does not address an issue, the common law rules of Agency apply.3 In addition, the UPOAA facilitates the drafting of DPAs and increases the likelihood of acceptance by third parties. As states continue to adopt the UPOAA, there is hope that laws regarding DPAs will become more uniform in order to encourage greater portability and acceptance of DPAs.

As a result of the explosion in the use of DPAs, attorneys will frequently be asked to assist clients in implementing DPAs. Additionally, attorneys will be asked to assist agents in exercising the authority granted by DPAs, represent third parties to whom DPAs have been presented for acceptance, and represent interested parties who are concerned about the use of a DPA and whether the named agent is abusing his or her authority. Therefore, the representation of agents and others concerning the use of DPAs will be a growth area in the practice of law.

For more information, in the Tax Management Portfolios, see Hook, 859 T.M., Durable Powers of Attorney, and in Tax Practice Series, see ¶6350, Estate Planning.

1 Russ v. Russ, 2007 WI 83 (Wis. 7/3/2007).

2 UPOAA §121.

3 Id.