Question about durable POA

[SecondCor521]

Hi all,

Father has durable POA in place naming Mother as agent and oldest child as "successor agent" if Mother can't/doesn't want to serve. Likewise, Mother has durable POA in place naming Father as agent and oldest child as "successor agent" if Father can't/doesn't want to serve.

Oldest child lives on the other side of the country and has her own busy life to attend to. Youngest child lives five miles from Father and Mother and has a busy life also but is FIRE'd.

Father and Mother are both early stage dementia and are still capable of handling their financial affairs but may soon not be. Father wants youngest child to handle financial affairs when the time comes. Mother is agreeable to this plan but doesn't want to "hassle with a lawyer" to update the existing POA or put a second POA into place.

Question: Can oldest child somehow extend or transfer POA to youngest child? In other words, can oldest child use her position and authority as POA to grant POA to youngest child? Is POA transitive?

(I am youngest child.)

 

[ERD50]

Do you have access to their papers? As I recall, for executors or maybe successor trustees, I've seen verbiage that outlines what to do if the primary cannot or chooses not to serve. Maybe the primary can designate, or maybe beneficiaries choose/approve?

-ERD50

 

[bingybear]

you can do a new poa without a lawyer. but you will need mom and dad to be competent to sign off and get all appropriate signatures

 

[rodi]

I don't think older child can transfer POA to younger child. We looked into this when we were trying to avoid legal guardianship for MIL and FIL. (MIL had POA for FIL, and developed dementia of her own.)

I would consult an attorney. I would also not delay - because if your parents are deemed incompetent because of early stages of dementia - they cannot sign over POA. If it is in their medical records already, it might be too late. The guardianship route is much harder - involves a court trial and the court determining whether your parents are competent. Also involves medical and psychiatric evaluations.

 

[SecondCor521]

@ERD50, yes, I've seen and glanced over the POAs. They basically are boilerplate 5 page documents that name spouse as agent and then there is one sentence basically saying if spouse can't/won't serve, then Oldest Child gets the job.

@rodi, yes, that's the situation I'm trying to avoid. If both Dad and Mom become senile enough to where they can't grant POA, then the choices become (A) have Oldest Child do the work, or (B) go for a conservatorship/guardianship with its obvious drawbacks. Oldest Child can do the work, but perhaps not as easily or promptly as I could since I'm local to Father and Mother, as well as the CPAs and estate lawyers and doctors.

It's hard to walk the fine line between urging them to do something that's in their best interest and seeming to be too pushy to gain control. Especially with financial and medical issues and where they are now on the descending slope.

 

[MichaelB]

I'd tear up the old POA and have a new one prepared. Banks and financial institutions are often reluctant to accept a POA, and my guess is they would refuse any delegation of authority that did not come directly from the original party. It is a hassle to go back to an attorney, but it will help avoid lots more hassle later on.

 

[bingybear]

I'd tear up the old POA and have a new one prepared. Banks and financial institutions are often reluctant to accept a POA, and my guess is they would refuse any delegation of authority that did not come directly from the original party. It is a hassle to go back to an attorney, but it will help avoid lots more hassle later on.

+1, but these can be done without an attorney, but should be inexpensive with a general practice one. There are other things that can help too, but at least get the minimum to save bigger hassles. If you're going back to the lawyer... get multiple alternates assuming people they trust are available and willing.

Hopefully all the "interested parties" (children) are on the same page.... makes things easier long term.

 

[spncity]

Why can't you just type up the same form and format, adjust the names, and take them to their bank for signing with a notary? That solves the resistance to paying an attorney but maybe there is some other resistance?

You could have Oldest Child ask them to let you help them with the new form to have Closest Child first and Oldest Child second.

If possible, do more than one original. Some transactions require original and it can be scary to let that out of your possession.

P.S. You could also redo the very same document just adding the Closest Child at the end (Oldest Child first, Closest Child second) and then when it's needed, Oldest Child can decline to serve (or decline until a future date). Then Closest Child has what is needed to do most of the work.

 

[spncity]

By the way, financial institutions often choose not to recognize DPOAs unless your parent has handed them a copy.

Some banks require their own forms...

 

[spncity]

Finally, if they are both getting demented now, it would be best to go ahead and delegate POA to the trusted children, and not to one another. Maybe this is what they would resist most. (Most banks still won't accept it unless the parent gives the bank a copy).

 

[pmac]

Short answer is that an agent of a POA cannot transfer agency authority to another person. If your parents are legally competent, the best choice is to have them execute a new POA. While you can pull a form off the internet, the money paid to an attorney to get it done correctly is well spent. Don't go cheap on important legal documents.

 

[DrRoy]

Short answer is that an agent of a POA cannot transfer agency authority to another person. If your parents are legally competent, the best choice is to have them execute a new POA. While you can pull a form off the internet, the money paid to an attorney to get it done correctly is well spent. Don't go cheap on important legal documents.

+1 on these points. I think the only way to avoid a lawyer on the new POA is if you are certain about the requirements for the new document to supercede the old one. Just notarizing the new POA may not be enough. It may need to be recorded or registered somewhere.

 

[bingybear]

+1 on these points. I think the only way to avoid a lawyer on the new POA is if you are certain about the requirements for the new document to supercede the old one. Just notarizing the new POA may not be enough. It may need to be recorded or registered somewhere.

quick search...

You can revoke your power of attorney whenever you want, as long as you are mentally competent. This revocation should be in writing, signed by you in front of a notary public, and delivered to the attorney-in-fact and any third parties with whom your agent has been in contact (e.g., your bank).

If these have never been used and only the family are involve. Have them revoke the documents. Using a lawyer is a straight forward way.
If you don't revoke the old ones... they I'd assume both are valid. In this case likely not an issue if all children are in agreement.

 

[Walt34]

Short answer is that an agent of a POA cannot transfer agency authority to another person. If your parents are legally competent, the best choice is to have them execute a new POA. While you can pull a form off the internet, the money paid to an attorney to get it done correctly is well spent. Don't go cheap on important legal documents.

What he said. There are times to try to save money, this is not one of them. The clock is ticking on how long your parents are going to be considered competent to appoint a POA and you need to get that done now. Otherwise it goes the much more convoluted/expensive route of having physicians asses their competence, reporting to a court, the court weighing the reports, and finally appointing a POA with maybe reporting requirements to the court. All of this is going to cost gobs more money and time than simply hiring an attorney to do the paperwork now.

 

[Souschef]

I just had it done for my wife and myself and it was $400 here in CA. Cheap insurance!

 

[SecondCor521]

In our case, the existing POA's were developed and signed back in 2000. I did not happen to notice if they were notarized, but since a lawyer prepared them I assume they did that part as well. I don't think they are registered, and I also don't know the registration requirements in my state. My plan, as far as I had gotten, was to offer to help my parents prepare a new POA and then go from there.

The lawyer / law firm who did them is still around, and I'm sure for a few hundred dollars could prepare new ones. The cost and what to do are the easy parts. The biggest hurdle is persuading the parents to "go through the hassle" at the same time that they're dealing with health issues.

Family is all in agreement as far as I know, but then again I haven't had detailed discussions with Oldest sibling. I would not expect things to go sideways but I know they sometimes/often do.

Thanks for all the replies...they're very helpful.

 

[Options]

Trying to save a buck while executing estate planning is a fool's errand, IMO. No, a successor agent cannot "extend" POA authority. More importantly, do your parents have a comprehensive estate plan--will, trust (if required), decisions regarding best method for transfer for assets (i.e., POD, TOD, direct beneficiary designation), medical power of attorney for healthcare, updated POA, buriel preparations and instructions, arrangements with financial custodians regarding documentation/process required of executor to access assets, etc.?

I just finished this rather exhaustive process in March and learned it's very easy to screw it up. You will only learn of your error once one (or both) of your parents have passed, and then it can quickly devolve into a mess (potentially requiring the involvement of an estate attorney at that time to "un-mess" it). If you don't want to take the time to immerse yourself in the details of total estate planning (like I did), I would definitely recommend using an estate planning attorney.

 

[mathjak107]

The main thrust of a power of attorney is to appoint an agent to act on an individual’s behalf with respect to financial matters in case such individual becomes incapacitated. Many people innocently refer to this document as one that is “simple” to prepare. This could not be further from the truth. Firstly, New York State passed legislation effective September 2009 in an attempt to create a statutory form that would be uniformly accepted. This legislation was the result of tremendous abuse that was found in this particular area, with some appointed agents taking advantage of the disabled and elderly.
very interesting newsletter one of the well known estate attorney's has .

The new power of attorney law results in a much lengthier document, and significantly restricts the actual power given to the agent over financial matters. If transfers are to be made on behalf of the principal, a separate gift rider must be executed. The gift rider must specifically articulate the agent’s power to make gifts to himself/herself or to third parties. Further, any additional powers beyond those enumerated in the statute, must be added to a modification section. Finally, while the law mandates banks, brokerage houses and other financial institutions to recognize the power of attorney, the form utilized must be statutory. Accordingly, if someone decides to cut corners and download a form from the internet, this may result in a tremendous disservice because if the form is not statutory, it does not have to be legally recognized. The power of attorney is an extremely important tool for estate and elder law practitioner. If the principal incorrectly drafts and/or executes this form, his/her ultimate plans regarding Medicaid eligibility or gifting to loved ones could be completely stymied.

 

[ERD50]

I'm going to question those who say an attorney is required - at least in Illinois, there is a POA form right on the illinois.gov website. Since this is provided by the State, shouldn't it be useful and accepted (assuming a non-complicated situation)?

https://www.illinois.gov/sites/gac/Forms/Documents/POA_Property_July2011.pdf

Relevant to some questions in this thread:

(NOTE: You may not name co-agents using this form.)

It looks pretty straightforward to me, and has explanatory NOTES along the way. Clearer than anything I've seen from a private attorney.

-ERD50

 

[MichaelB]

I'm going to question those who say an attorney is required - at least in Illinois, there is a POA form right on the illinois.gov website. Since this is provided by the State, shouldn't it be useful and accepted (assuming a non-complicated situation)?

https://www.illinois.gov/sites/gac/Forms/Documents/POA_Property_July2011.pdf

Relevant to some questions in this thread:

It looks pretty straightforward to me, and has explanatory NOTES along the way. Clearer than anything I've seen from a private attorney.

-ERD50

Illinois is unique in this respect, the statutory short form POA already has language that is generally accepted. Many state agencies won't accept any other POA.

We still used an attorney, who charged a lower fee. The form needs to be customized to the individual needs, and, as in the case of this thread, the grantor might not have the cognitive skills needed to fully understand the document, leaving open the door to a challenge down the road - just a crack. An attorney involved in the transfer of authority can lend credibility to the process.

 

[Options]

I'm going to question those who say an attorney is required - at least in Illinois, there is a POA form right on the illinois.gov website. Since this is provided by the State, shouldn't it be useful and accepted (assuming a non-complicated situation)?

https://www.illinois.gov/sites/gac/Forms/Documents/POA_Property_July2011.pdf

Relevant to some questions in this thread:

It looks pretty straightforward to me, and has explanatory NOTES along the way. Clearer than anything I've seen from a private attorney.

-ERD50

There is nothing "straightforward" in estate planning. Cut corners at your own risk. Many years ago I did exactly that and only this year while updating my estate plan (and doing it right this time by thoroughly reading/researching, obtaining counsel) did I learn had I passed away it would have resulted in a mess for my executor/heirs.

 

[ERD50]

There is nothing "straightforward" in estate planning. Cut corners at your own risk. Many years ago I did exactly that and only this year while updating my estate plan (and doing it right this time by thoroughly reading/researching, obtaining counsel) did I learn had I passed away it would have resulted in a mess for my executor/heirs.

OK, but I'm not sure that what I'm talking about, in the context of the OP's POA question, fits a description of 'cutting corners'. Yes, the overall plan needs to be looked at, but the question was about the POA specifically.

I just looked at the POA my MIL had written by a high priced fancy-$chmancy estate law firm - it is a cut-paste of the IL form I linked. That's actually a good thing IMO, I'd rather have something that has been published and reviewed, rather than some hand-crafted work by some guy, who might just do something stupid like a typo?

-ERD50

 

[Options]

OK, but I'm not sure that what I'm talking about, in the context of the OP's POA question, fits a description of 'cutting corners'. Yes, the overall plan needs to be looked at, but the question was about the POA specifically.

I just looked at the POA my MIL had written by a high priced fancy-$chmancy estate law firm - it is a cut-paste of the IL form I linked. That's actually a good thing IMO, I'd rather have something that has been published and reviewed, rather than some hand-crafted work by some guy, who might just do something stupid like a typo?

-ERD50

Well the POA has specific language granting the executor authority to act in various areas. If your financial institution doesn't recognize your POA, it can mean havoc for your executor attempting to access your assets. My bank requires my executor to deal with the bank's legal department in order to access my account upon death, even with a POD designation (although I was assured this is just a couple of days formality).

There are various types of POA's:

Types of Power of Attorney: Which POA is Right for Me? | ZING Blog by Quicken Loans

To your point, my estate plan was created according to California law (state I live in), and it really did look like a boilerplate document, even with my ability to customize what areas of authority would be granted to my executor. OTOH, upon learning the extent to which I had royally screwed up my prior trust, I'm glad I didn't take any chances this time!