Powers of Attorney

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Conditions

Explanation of conditions of appointment under a Power of Attorney

· 8 min read

Conditions Can Be Imposed In Respect Of An Agent’s Appointment

A condition controls the right of a potential candidate for appointment as an agent, successor agent or sub-agent to be or remain appointed.

Before imposing a condition in respect of the potential appointment of a candidate for appointment as an agent, successor agent or sub-agent, a prudent principal might consider whether a direction or limitation may be used instead of a condition.

This is because conditions determine whether an agent takes or remains in office, whereas a direction or limitation tends to qualify aspects of the operation of the Power of Attorney.

That said, it is not impossible for a direction or limitation to control the appointment of a candidate for appointment as an agent, successor agent or sub-agent, merely that directions and limitations deal with matters without necessarily affecting the eligibility for appointment of a candidate.

Conditions & The Legislation

Legislation in the Six (6) Greater States dealing with termination of a Power of Attorney for a person1 as against an agent does not mention termination of an agent’s appointment in the event that the agent’s breaches a condition of appointment.

This is illustrated in the Summary Table - Legislation Grounds For Termination, which addresses termination as against an agent and termination of the Power of Attorney separately, noting that the legislation only refers to termination in accordance with its terms in respect of termination of the Power of Attorney.

In this regard, it is curious that:-

The position is curious in Texas and Florida because only Texas and Florida make provision with respect to termination of a Power of Attorney according to its terms and in both these states, the provision dealing with termination of a Power of Attorney according to its terms are directed to termination of the Power of Attorney, not termination as against an agent, the effect of which seems to falls short of the work necessary to effect termination of an agent’s appointment if the agent breaches a condition of appointment, notwithstanding that this does not prevent the Power of Attorney terminating according to its terms, merely gives it no legislative recognition in this context.

In California:-

In Pennsylvania and Illinois where there are no substantive termination provisions in legislation, inclusion of a condition in a Power of Attorney would require the Power of Attorney to deal with that termination in all respects.4

Relevant Concepts

Accepting that legislation governing Powers of Attorney for a person5 in the Six (6) Greater States makes no mention of conditions, a prudent principal would consider carefully how they deal with conditions, presumably in full terms in their Power of Attorney.

Dealing with conditions might involve for example:-

  • including terms in a Power of Attorney that require any agent to resign in the event that they breach a condition
  • defining different types of conditions having regard to temporal nexus to improve clarity about the precise terms of any condition
  • dealing with issues like what transpires where a potential agent is ineligible by virtue of breaching a condition, being a condition capable of being subsequently satisfied and the potential agent later satisfies that condition
  • dealing with whether a successor agent who has replaced an agent who was earlier unable to satisfy a condition remains in office if the condition is subsequently satisfied
  • dealing with the significance of a condition governing either or both the right to be appointed or remain appointed as an agent, successor agent or sub-agent
  • taking care to ensure a condition is worded to ensure it is always possible to ascertain whether or not it has been fulfilled

Conditions Upon An Individual

An individual condition is a condition imposed in respect of less than a class of officeholders.

A principal may for example, require that a person be married to a specified person, or own certain property, or engage in certain activities, so as to qualify for appointment or remain appointed as an agent, successor agent or sub-agent.

Using Conditions To Create A Scheme Of Priority

Individual conditions may be used to ‘prioritize’ the appointment of agents using different individual conditions.

It would be important to ensure for example, that conditions of this kind accord with the other terms of a Power of Attorney including in particular, terms dealing with appointment of agents and similar.

Example

Imagine a Power of Attorney containing individual conditions along the lines:-

  • Bill is ineligible if Mary is willing and eligible to be appointed
  • John is ineligible if Bill or Mary are appointed
  • Peter is ineligible if Bill, Mary or John are appointed

In this example, Mary is first choice, Bill is second choice, followed by John and Peter.

Conditions Upon A Class

A principal may identify conditions in respect of a particular class of officeholder.

Classes of officeholder include agents, successor agents and sub-agents.

There is nothing to prevent a Power of Attorney also defining conditions applicable to all classes of officeholder (i.e. any agent of any class).

Examples Of Class Conditions

For example:-

  • a principal might impose class conditions in respect of any sub-agent that requires them to be a suitably qualified professional, perhaps older than a certain age and similar
  • a class condition might be used to limit the number of agents appointed at any given time (i.e. recording a class condition in respect of sub-agents that not more than three (3) sub-agents are already appointed under the Power of Attorney) or otherwise define limited circumstances in which a particular class of officeholder may be appointed and similar

Examining a Condition

Examining whether for example, a condition has been satisfied might include consideration of matters like:-

  • what precisely constitutes satisfaction
  • when the condition must be satisfied
  • whether the condition must remain satisfied

Satisfaction Of A Condition & Temporal Nexus

Defining when a condition must be satisfied may be best achieved using one of the following six (6) alternatives:-

A condition that must be fulfilled:-

  • before the agent takes office
  • before the agent takes office and must continue to be satisfied
  • at the time that the agent takes office
  • at the time that the agent takes office and must continue to be satisfied
  • at a future point in time
  • at a future point in time and must continue to be satisfied

Other Approaches To Conditions

Staged Conditions

The ‘six-type’ approach above does not account for other forms of conditions, for example ‘staged conditions’ involving a series of criteria required to be satisfied, staggered over time.

For example, a ‘staged condition’ might involve the candidate in respect of whom the condition applies to have completed a university degree by 31 December 2025, married by 1 January 2027 and remain married as at 30 December 2030.

Anyone attempting to define a ‘staged condition’ might be assisted by consideration of the concepts above.

Reliance Upon Agent’s Certificates

In Texas, Illinois and Florida, provisions dealing with certification of a contingency seem to offer scope for an agent to certify certain matters which probably include an assurance that they are not ineligible by virtue of breach of any condition.

This is less applicable in California, New York and Pennsylvania where:-

Drafting Tips - Suggestions & Ideas

Focus On Names

When drafting conditions, focus on using the name of the person in respect of whom the condition applies. For example:-

  • a condition in respect of Bill Smith that “Bill Smith must be 25 years or older” is better than “must be 25 years or older" which may be uncertain as to who must be 25 years of age
  • taking the example above a step further, for example, in respect of Bill Smith there might equally be a condition that “Mary Smith must be 25 years or older” the effect of which is that unless Mary Smith is 25 years of age, Bill Smith cannot be appointed

References like ‘brother’ or ‘sister’ should be avoided in favour of full names and where names are mentioned inclusion of an address is also warranted, unless specified elsewhere in the Power of Attorney

Focus On Dates & Times

Dates and times are important and so rather than expressions like “12pm (GMT) in ………. on May 12, 2029 in Austin, Texas” preferred over say, “May 12, 2029”.

Test The Condition

The wording of conditions is a delicate exercise with serious ramifications.

A simple test to apply when wording a conditions is to determine if any other construction other than the intended construction could be given to the condition or uncertainty exists as to its construction and operation.

If so, refining the words of the condition and possibly other words in the Power of Attorney to remove these outcomes is the only way that the condition could be used effectively.

There are literally hundreds of examples of ways to draft better conditions, these are just two suggestions.

Many lawyers would recommend drafting of conditions and related provisions in a Power of Attorney be done by a lawyer, given the impact they can have upon the effectiveness of a Power of Attorney and the need to appreciate their effect as part of the whole terms.

  1. Being not Powers of Attorney excluded from the ambit of the legislation - click here to read more. ↩︎

  2. See also §4155 ↩︎

  3. See for example, the heading Relevant Concepts ↩︎

  4. Ibid. ↩︎

  5. Being not Powers of Attorney excluded from the ambit of the legislation - click here to read more. ↩︎