Powers of attorney are regulated by state law and those laws vary substantially. In 2006, the Uniform Law Commissioners (ULC), who draft and propose model laws, approved the Uniform Power of Attorney Act. Among other goals, the UPOAA aims to promote autonomy and prevent, detect and redress power of attorney abuse.
Some of the key provisions of the UPOAA that benefit and protect people who execute POAs include:
The clear statement of an agent’s duties, including the agent’s responsibility to act in good faith, within the scope of authority granted, and according to the principal’s known expectations or best interest–as well as more specific duties such as preserving estate plans and cooperating with health care proxies;
Stringent requirements for exercising “hot powers”–those with a high propensity for dissipating property or altering an estate plan;
The provision that a third party may refuse to honor a POA when the third party reports suspected abuse to an adult protective services agency or knows that someone else has made a report; and
Liability of malfeasant agents for damages, attorney’s fees and costs.
How Do the States Measure Up?
While two states–New Mexico and Idaho–have enacted the UPOAA, a careful comparison of current state POA statutes with the UPOAA shows that a large majority of state laws lack most of the UPOAA’s protections for individuals creating powers of attorney. For example, at the beginning of 2008:
Only four states had provisions regarding an agent’s mandatory duties that are identical, equivalent or substantially similar to Section 114(b) of the UPOAA.
Only eight states had provisions requiring specific grant of the “hot powers” that are identical, equivalent or substantially similar to Sections 201(a) and 301 of the UPOAA.
Only four states had provisions on agent liability that are identical or equivalent to UPOAA Section 117.
What States Can Do
State legislatures can adopt the UPOAA, in whole or in part. The full report includes tips for enacting the UPOAA provisions that protect against power of attorney abuse or promote autonomy. The text includes a list of stakeholders who may want to collaborate in the study and recommendation process.
About the Author
Attorney Adam Peck has been practicing law since 1981. A former successful business owner, Mr. Peck initially focused his legal career on business law. Within the first three years, after some colleagues and friend’s parents endured nursing home neglect and elder abuse, he continued his education to begin practicing elder law and nursing home abuse law.