Upoaa Power Point Presentation 20090510


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Virginia Uniform Power of Attorney Act

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Upoaa Power Point Presentation 20090510

  1. 1. The Virginia Uniform Power of Attorney Act Andrew H. Hook, CELA, CFP ® Lisa V. Johnson, Esquire Oast & Hook, P.C. Attorneys and Counselors at Law Serving Virginia and North Carolina Tel: 757-399-7506 | Tel: 252-722-2890 Fax: 757-397-1267 www.oasthook.com
  2. 2. Why Do We Need a New POA Statute? <ul><li>There is a growing divergence among state POA statutes. </li></ul><ul><li>Results from a 2002 national survey demonstrated the need for a comprehensive statute that would address the following: </li></ul><ul><ul><li>Confirmation of activation of contingent powers </li></ul></ul><ul><ul><li>Revocation of spouse-agent’s authority upon dissolution or annulment of marriage to principal </li></ul></ul><ul><ul><li>Portability </li></ul></ul>
  3. 3. Survey Results Continued… <ul><ul><li>Requirement that gifting authority to be expressly granted </li></ul></ul><ul><ul><li>Providing default standard for fiduciary duties </li></ul></ul><ul><ul><li>Permitting principal to alter default fiduciary standard </li></ul></ul><ul><ul><li>Requirement of notice from agent when agent is no longer willing or able to act </li></ul></ul><ul><ul><li>Safeguards against abuse by an agent </li></ul></ul><ul><ul><li>Remedies and sanctions for abuse by an agent </li></ul></ul><ul><ul><li>Protection for reliance of third parties on a POA </li></ul></ul><ul><ul><li>Remedies and sanctions for refusal of third parties to honor a POA. </li></ul></ul>
  4. 4. Why Do We Need a New POA Statute? <ul><li>Modern Default Rules </li></ul><ul><li>Preserve POAs as a low-cost, flexible and private form of surrogate decision making </li></ul>
  5. 5. Encourages Acceptance <ul><li>Provides broad protection for good faith acceptance or refusal of an acknowledged POA by third parties. </li></ul><ul><ul><li>Honesty in Fact </li></ul></ul><ul><ul><li>Authority to request agent certification or opinion of counsel </li></ul></ul><ul><ul><li>Rejects imputed knowledge </li></ul></ul><ul><li>Sanctions for unreasonable refusal to accept POA by third party (including Attorneys’ fees) </li></ul>
  6. 6. Provides Protection for Principals <ul><li>Mandatory and default duties for agents </li></ul><ul><li>Liability for agent misconduct </li></ul><ul><li>Broad standing for judicial review </li></ul><ul><li>Requires express language for “hot powers” </li></ul>
  7. 7. Protection of Agents Agent who acts with care, competence and diligence will not be liable solely because the agent also benefits from the transaction or has a conflicting interest.
  8. 8. Assists in Drafting POA <ul><li>Modern definitions of authority </li></ul><ul><li>Default Rules which can be customized </li></ul><ul><li>Incorporation of powers by reference </li></ul><ul><li>“ Portability” </li></ul><ul><li>Statutory Short Form POA </li></ul>
  9. 9. Retains Popular Existing Virginia POA Rules <ul><li>Discovery by third parties of the acts of an agent </li></ul><ul><li>Anti-Casey gift rules </li></ul>
  10. 10. Concerns Expressed About the UPOAA <ul><li>It is a long (i.e. 22 pages) and complex law </li></ul><ul><ul><li>Answer: The substance of the bill is contained in the first 8 pages. The balance of the bill contains statutory definitions of authority and the statutory form POA. The UPOAA primarily provides default rules where the POA is silent. </li></ul></ul><ul><li>It is not wise to provide the public with a form POA </li></ul><ul><ul><li>Answer: Form powers of attorney are already easily available to the public. The UPOAA provides a readily recognizable form for consumers who wish to use a form. </li></ul></ul>
  11. 11. Article One <ul><li>Modern definitions (i.e. “agent” and “incapacity”) </li></ul><ul><li>Durability is default Rule </li></ul><ul><li>Execution by principal or in his presence by another at his direction. </li></ul><ul><li>Encourages portability by recognizing POAs created under the laws of other states </li></ul>
  12. 12. Article One Continued <ul><li>Recognizes a photocopy or electronically transmitted copy </li></ul><ul><li>Permits nomination of a guardian </li></ul><ul><li>Authorizes immediately effective (default rule) and springing POAs </li></ul><ul><li>Provides default rules for the termination of the POA or agent’s authority </li></ul><ul><li>Provides default rules for co-agents and successor agents </li></ul>
  13. 13. Article One Continued <ul><li>Establishes a default rule providing compensation for agent </li></ul><ul><li>Establishes the time at which the agency relationship and imposition of fiduciary duties commences </li></ul><ul><li>Defines mandatory and default duties for agents </li></ul><ul><li>Authorizes exoneration of agent </li></ul>
  14. 14. Article One Continued <ul><li>Broad standing to seek judicial relief </li></ul><ul><li>Imposes liability on agents for misuse of POA </li></ul><ul><li>Authorizes an agent to resign </li></ul><ul><li>Protects third parties for “good faith” acceptance of acknowledged POA </li></ul><ul><li>Imposes Liability for Refusal to accept acknowledged POA </li></ul>
  15. 15. Article One Continued <ul><li>Where the UPOAA is silent, the common law is retained. </li></ul><ul><ul><li>What authority a principal can not delegate to an agent </li></ul></ul><ul><ul><li>Capacity of an agent </li></ul></ul><ul><ul><li>Agent’s liability and duties to third parties </li></ul></ul><ul><ul><li>Principal’s duties to the agent </li></ul></ul><ul><ul><li>Actual and apparent authority </li></ul></ul><ul><ul><li>Rules of construction </li></ul></ul>
  16. 16. Article Two <ul><li>Defines the authority that must be expressly granted </li></ul><ul><ul><li>Create amend, revoke or terminate a trust </li></ul></ul><ul><ul><li>Make a gift </li></ul></ul><ul><ul><li>Create or change rights of survivorship </li></ul></ul><ul><ul><li>Delegate authority granted by POA </li></ul></ul><ul><ul><li>Exercise fiduciary powers that the principal has authority to delegate </li></ul></ul>
  17. 17. Article Two Continued <ul><li>Permits incorporation of various powers by reference </li></ul><ul><li>Defines incidental authority that accompanies all grants of authority </li></ul><ul><li>Provides modern definitions of various grants of authority </li></ul>
  18. 18. Defined Authority Gifts Taxes Retirement Plans Benefits from Government Programs Personal & Family Maintenance Claims and Litigation Estates, Trusts, and Beneficial Interests Insurance and Annuities Operation of Entity or Business Banks and Financial Institutions Commodities and Options Stocks and Bonds Tangible Personal Property Real Property
  19. 19. Article Three <ul><li>Statutory Form Power of Attorney with “plain English” set of instructions for the agent </li></ul><ul><li>Form Agent Certification </li></ul>
  20. 20. Article Four <ul><li>Miscellaneous provisions </li></ul><ul><li>UPOAA applies to existing POAs </li></ul><ul><li>Does not affect any action taken by an agent or third party prior to enactment </li></ul>
  21. 21. Recommended Amendments <ul><li>Expressly eliminate the delivery requirement </li></ul><ul><li>Expressly include disclaimers and augmented estate elections as “hot powers” </li></ul><ul><li>UPOAA will not apply to designations of persons to make burial arrangements </li></ul><ul><li>Include UPOAA §401 </li></ul><ul><li>Effective date July 1, 2010 </li></ul>
  22. 22. Status of UPOAA <ul><li>Enacted in 2009 with a re-enactment provision </li></ul><ul><li>Requires Enactment by 2010 session of General Assembly to be effective </li></ul><ul><li>Enactment supported by the Virginia Bar Association, Virginia Bankers Association, FPA and AARP </li></ul><ul><li>Contact your member of General Assembly to promote enactment </li></ul>
  23. 23. Where Can You Learn More? <ul><li>Virginia Legislative Information Service – SB 855 2009 Session </li></ul><ul><li>Uniform Law Commission Website - http://www.nccusl.org/Update/ </li></ul><ul><li>AARP Website - http://www.aarp.org/research/legal/legalrights/2008_17_poa.html </li></ul><ul><li>http://www.oasthook.com/legal_info.php </li></ul>
  24. 24. Attorneys and Counselors at Law Offices in Elizabeth City, Portsmouth, and Virginia Beach Tel: 757-399-7506 | Tel: 252-722-2890 | Fax: 757-397-1267 Please visit our web site at www.oasthook.com <ul><li>Estate Planning </li></ul><ul><li>Asset Protection Planning </li></ul><ul><li>Long-term Care Planning </li></ul><ul><li>Veterans Benefits </li></ul><ul><li>Financial Planning and Advice regarding Investments, Insurance, Annuities, Reverse Mortgages, and Equity Lines </li></ul><ul><li>Tax Planning </li></ul><ul><li>Guardianships and Conservatorships </li></ul><ul><li>Estate and Trust Administration </li></ul><ul><li>Special Needs Trusts </li></ul><ul><li>Care Management Services </li></ul><ul><li>Business Planning and Succession Planning </li></ul>