Published in the Union Leader (7/2/2018)
Q: In light of the newly adopted Uniform Power of Attorney Act, am I still authorized to act as my mother’s agent under documents she signed a few years ago?
A: Yes, but there are some things that you and your mother should consider.
As you likely know, a power of attorney is a legal document granting one party (the agent) the power to act on behalf of another party (the principal), usually in connection with a specific transaction or activity, such as the management of the principal’s financial affairs.
In 2017, New Hampshire adopted the Uniform Power of Attorney Act, which became effective on Jan. 1. The act applies not only to powers of attorney that were created on or after its effective date, but also to an agent’s acts taken after the effective date under a valid power of attorney created earlier.
This means that, regardless of when the principal signed the power of attorney, any action taken by the agent under the power of attorney on or after Jan. 1, 2018, is subject to the Uniform Power of Attorney Act.
Because of this, you and your mother should consider the changes brought about by the act. Among the biggest changes is that the act makes clear that an agent under a power of attorney has a duty to keep a record of all receipts, disbursements and transactions made on the principal’s behalf. Although this duty was previously recognized by common law, it is now expressly required by statute.
Another notable change brought about by the Uniform Power of Attorney Act is that, for a gift to be presumed lawful, gift-giving authority must be expressly granted in the power of attorney. A court will presume that a gift was lawfully made only if the document clearly states that the giving of gifts is permitted and the power of attorney is accompanied by a specific statutory disclosure statement and agent acknowledgment.
Absent inclusion of these provisions, the agent carries the burden of proving that the gift was authorized and lawful.
It is important for you to understand that, as an agent under the power of attorney, you are a fiduciary. Not only does your mother have the right to demand and compel an accounting of all transactions undertaken by you as agent, but so do your siblings. You may be held liable if you have managed the funds inappropriately or failed to keep proper records.
Much of my probate litigation practice consists of the bringing and defending of such accounting claims.
Ultimately, you can likely continue acting under the power of attorney that your mother executed, but you should both keep in mind the changes to the law discussed above, and that there are other changes to the law not addressed here. It may be prudent to consult an attorney for further guidance.
Lexi Cote can be reached at [email protected].
Know the Law is a bi-weekly column sponsored by McLane Middleton, Professional Association. We invite your questions of business law. Questions and ideas for future columns should be addressed to: McLane Middleton, 900 Elm St., Manchester, NH 03101 or emailed to [email protected]. Know the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for guidance specific to your particular situation.