At present, many people have not planned for their potential incompetence. There are number of legal devices that are readily available to assist people in expressing their wishes in advance. Two of these devices include a Durable Power of Attorney for Financial Decisions (General Durable Power of Attorney), and Durable Power of Attorney for Health Care Decisions. A senior citizen may become permanently disabled due to a stroke, or a young adult might be rendered temporarily unconscious as a result of an automobile accident. In both of these scenarios, the trauma thrust upon everyone involved can be overwhelming, especially when interested parties disagree about how to handle the crisis.
As with most things in life, planning ahead can help. The two devices, Durable Power of Attorney for Financial Decisions and Durable Power of Attorney for Health Care Decisions, will be discussed separately. A durable power of attorney, is a form of agency. The person who gives the power is the principal, and the person who receives the power is the “attorney-in-fact” or agent. “Durable” in this context means that the agent’s power will survive the principal’s incapacity or disability. As a result Durable Power of Attorney’s, can be used as an alternative to guardianship in some states under certain circumstances, provided the principal executed the document before losing capacity.
As a general rule, a General power of attorney is also referred to as a Durable Power of Attorney for Financial Decisions, or simply a Durable Power of Attorney. A Durable Power of Attorney for Health Care Decisions is also a Durable Power of Attorney, but its authority is limited to health care decisions. In Kansas, both powers can be contained in the same document. Because these two documents convey such divergent authority to one person, many seniors choose a different person for each of these powers. The agent’s authority to act for the principal under a Durable Power of Attorney is based on the powers that the principal gives to her. Whether broad, general powers or limited, specific powers are given to the agent is completely determined by the principal. Among other things, the principal may delegate to the agent in the Durable Power of Attorney the authority to make deposits and withdrawals from his checking account, to file his tax returns, and to sell his home. There are a few powers, however, that the principal may not delegate. For example, the agent cannot prepare a will, vote, or seek a divorce on the principal’s behalf. In Kansas, the principal may grant a gifting” power to her agent, but this power generally must be stated with specificity within in the Durable Power of Attorney.
Two primary methods exist to determine the effective date of an agent’s power under a Durable Power of Attorney. First, a Durable Power of Attorney may confer power to an agent at the time the documents are executed and delivered. A second method reserves the agent’s power until the principal has become incapacitated or disabled. Upon the occurrence of either of these events, the power springs into effect. This type of Durable Power of Attorney is labeled “springing.” Kansas law provides for both types in the Uniform Durable Power of Attorney Act. Senior citizens’ needs vary; therefore, no solution is best for all people. Many considerations will need to be evaluated in order to determine how the senior’s needs are best meet.
A durable power of attorney is revocable by the principal while he still has capacity. If the agent has a financial interest in the subject matter of the power of attorney, the power is generally irrevocable. Most senior citizens who execute Durable Power of Attorney’s are getting assistance with their day to day personal affairs and their agents do not have an ownership interest in the senior’s property which would preclude revocation. In addition, revocation can be by implication, in addition to, destruction of the document or express revocation by the principal. Other modes of termination include: death of the principal or agent, occurrence of a specific event, qualification of a guardian, or the passage of a date of expiration. Generally, after the death of the principal, the agent of a Durable Power of Attorney may bind the principal using a Durable Power of Attorney only if she does not know of the occurrence of this event.
The agent binds the principal in accordance with the laws of agency. As a result, the principal is personally liable for contracts made by the agent on the principal’s behalf. The agent should follow the direction of the principal while the principal remains competent. The agent has a duty to act solely for the benefit of the principal, and if she does not, she is subjected to liability for her breach. Although this general principal is true, often the agent may not have any assets for which she may be held accountable. As a result, senior citizens are often advised to select a trustworthy person to be their agent. If the principal’s competency is in question, the agent may need to seek determination of a court prior to acting against the wishes of the principal, or she may be liable to the principal for breach of her fiduciary duty.
Kansas law does provide for the recording of any instrument which affects real estate. Recording, however, is not currently required by Kansas law. If the original Durable Power of Attorney was recorded, however, any subsequent revocation should be recorded. Some states do required recording of a Durable Power of Attorney that will affect real estate. The Kansas statutes provide for a Durable Power of Attorney for Health Care Decisions. The same basic concepts explained above for Durable Power of Attorney apply to the Durable Power of Attorney for Health Care Decisions with regard to agency law, effectiveness, revocation, and termination. The key difference between the Durable Power of Attorney and the Durable Power of Attorney for Health Care Decisions is the authority granted.
By: Jeffrey Broobin