¶ 
Case Studies
- Case Study - Different types of terms
- Case Study - Mental illness
- Case Study - Examples of durable Powers of Attorney
- Case Study - Between two dates
- Case Study - Conditional termination
- Case Study - Springing Powers of Attorney
- Case Study - Military Powers of Attorney
- Case Study - The Concept of ‘Inception’
- Case Study - Fulfilment of Purpose
- Case Study - Temporal Nexus & Purpose
¶ Case Study - Different Types of Terms
¶ Introduction
This Case Study illustrates the nature of different ‘terms’, in particular:
- the term of the Power of Attorney (ie. its lifespan)
- term of appointment being the period for which an agent is appointed (i.e within the lifespan of a Power of Attorney)
- terms of authority, explaining how things work during the course of the agent's appointment
¶ Facts
Mary creates a Power of Attorney, appointing Steven and Mark as agents.
The "term of Mary's Power of Attorney" is three (3) years, commencing and terminating on two specific dates.
The term of Steven's appointment is between two dates, being two dates that are six (6) months apart and both in the second year of the Power of Attorney.
Stephen is appointed upon certain terms of authority recorded in the Power of Attorney dealing with matters like:-
- what tasks Stephen may perform
- when Stephen may perform those tasks (perhaps on certain dates, subject to a contingency)
- any prevailing circumstances that qualify Stephen's role
- limitations restricting the scope of Stephen's authority
- obligations upon Stephen, such as perhaps producing annual accounts in compliance with specific directions
- Stephen's authority to act independently or by agreement with other agents
- Stephen's authority to act perhaps only if certain conditions are satisfied
Mark is appointed upon different terms.
¶ Conclusion
This Case Study highlights the difference between:-
- the 'lifespan' of a Power of Attorney (i.e term of the Power of Attorney)
- the period in respect of which an agent is appointed (i.e. term of appointment)
- provisions governing how things work during an agent's term of appointment (i.e. terms of authority)
¶ Case Study - Mental Illness
¶ Introduction
This Case Study illustrates is how:-
- a durable Power of Attorney may be cast so as to only authorize tasks to be performed when the principal has capacity
- a durable Power of Attorney may be cast so as to authorize tasks only to performed tasks when the principal lacks capacity
Importantly, because each of these Powers of Attorney are durable, they do not terminate immediately upon the principal losing capacity.
¶ Facts
Geoff suffers periodic bouts of mental illness, during which he loses capacity to manage his affairs for extended periods.
Geoff's wants to grant two Powers of Attorney:-
- Power of Attorney 1: to his sister Mary, an accountant, to perform tasks for Geoff on her own during any period that Geoff has capacity ("Power of Attorney 1")
- Power of Attorney 2: to his sister Mary and brother Mike, authorizing them to act by agreement in managing his affairs during periods Geoff lacks capacity ("Power of Attorney 2")
¶ Conclusion
Poignantly, circumstances involving mental illness are the precise kind of circumstances that durable Powers of Attorney are intended to solve.
For each Power of Attorney to be a durable Power of Attorney:-
- it would need to be clear from the contents of each Power of Attorney read in conjunction with any relevant legislation that Geoff intended the operation of the Power of Attorney to not terminate on the first occasion he loses capacity after the Powers of Attorney are signed by him;
- the Powers of Attorney would need to comply with any relevant mandatory requirements applicable to a durable Power of Attorney
In particular, Power of Attorney 1 granted to Mary alone would be durable, even though it only authorizes Mary to perform tasks at any time in the future that Geoff has capacity.
It is of no consequence that:-
- Power of Attorney 1 only authorizes Mary to perform tasks at any time in the future that Geoff has capacity
- does not authorize Mary to perform any task when Geoff lacks capacity
The question of what tasks Mary is authorized to perform at any given time is only an incidental matter, incidental to satisfaction of the relevant consideration, whether Geoff's preference is for the Power of Attorney not terminate on the first occasion Geoff loses capacity after the Powers of Attorney are signed by him.
What tasks Mary or Mike might perform under either Power of Attorney has no bearing upon Geoff's preference that neither of the Powers of Attorney terminate at the first moment Geoff loses capacity.
¶ Case Study - Further Examples of Durable Powers of Attorney
¶ Introduction
Below are some examples of a durable Power of Attorney
¶ Example 1
Consider these further examples of a Power of Attorney:-
- a Power of Attorney that terminates the day after the principal loses capacity, which would be a durable Power of Attorney because it does not succumb to the common law rule
- a Power of Attorney that terminates if the principal loses capacity and some further condition precedent is satisfied (i.e. a certain agent remaining eligible and appointed; a certain date has passed; a marriage is continuing)
Both of these are clearly examples of a durable Power of Attorney, because they do not unequivocally terminate upon the principal losing capacity
¶ Example 2
A durable Power of Attorney might:-
- only authorize agents to perform tasks when the principal has capacity
- authorize one agent to perform one task until such time as the principal loses capacity, after which point in time two other agents may commence to perform that task
- authorize two agents to perform certain tasks on an ongoing basis, but only perform those tasks, or perhaps other tasks, between two particular dates in the future if the principal lacks capacity
- terminate if the moon is blue and the principal has capacity, or if the moon is red and the principal lacks capacity etc.
¶ Example 3
Imagine a durable Power of Attorney including provision to the effect that the Power of Attorney:-
- will not terminate if the principal loses capacity before a certain date
- will terminate if the principal lacks capacity on or after that date
The Power of Attorney will operate until the specified date and thereafter, will terminate if the principal lacks capacity on or after that date.
¶ Case Study - Between Two Dates
¶ Introduction
This Case Study illustrates:-
- how a Power of Attorney may be cast to operate between two dates
- how to approach legislation along the lines of ‘a non-durable Power of Attorney is terminated by the incapacity of the principal’
¶ Facts
Imagine a durable Power of Attorney including provision to the following effect:-
"Between [Date 1] and [Date 2]:-
- agents may perform the tasks they are authorized to perform in this Power of Attorney at any time during any period that I have capacity
- agents cannot perform the tasks they are authorized to perform in this Power of Attorney at any time during any period that I lack capacity..
any time refers to any single time and more than one time..
any period refers to any single period and more than one period..
¶ Applying The Fundamental Principle
This is a durable Power of Attorney, because the intention of the principal is that the Power of Attorney continues to operate, if the principal's lacks capacity.
In drawing this conclusion, we focus solely upon the principal's intention.
The principal intends that the Power of Attorney not terminate immediately upon the principal losing capacity.
It is this intention, quite apart from any consideration of what the agents are able to do and when during the life of the Power of Attorney, that renders it durable.
¶ Why Is This Case Study Helpful
This Case Study is poignant, because:
- it illustrates how in California, §4155 (which provides that “a non-durable Power of Attorney is terminated by the incapacity of the principal”) is not to be read as suggesting a Power of Attorney that does not terminate on incapacity is durable (by some sort of ‘default logic’)
- it illustrates how in New York:-
This Case Study makes it easy to identify the flaw in reasoning like “..this Power of Attorney is non-durable in California, because it does not authorize the agents to perform tasks at any time that the principal lacks capacity”
This is plainly incorrect, applying the fundamental principle.
¶ A Side Issue
In considering this Case Study, it is helpful to recognize that the expression “perform the authorized tasks at any time during any period that I..” is preferred over a version using instead the expression “act if..”, resulting in expressions like "my agents cannot act if I lack capacity..".
This is because the word “act” seems to have unwanted intimations as to appointment.
Any suggestion that appointment is somehow relevant can and should be avoided, by adopting the preferred formula of words (including the expression ‘any time during any period’ above).
¶ Case Study - Conditional Termination
¶ Introduction
This Case Study illustrates the notion of conditional termination.
¶ Facts
Imagine a Power of Attorney that provides that:
“In the event that:-
(a) the principal lacks capacity and Bill Smith is appointed as an agent, this Power of Attorney will not terminate upon the principal losing capacity
(b) Bill Smith is not appointed as an agent and the principal lacks capacity, this Power of Attorney terminates..".
¶ A Further Example
Consider these examples:-
- a Power of Attorney that is to the effect “..this Power of Attorney terminates upon me losing capacity in San Francisco but if I lose capacity outside San Francisco, this Power of Attorney will not terminate..”
- a Power of Attorney that is to the effect “..this Power of Attorney terminates upon me losing capacity if Mary Smith is alive and functioning normally at the time I lose capacity, but if I lose capacity and Mary Smith is not alive and functioning normally at the time I lose capacity this Power of Attorney will terminate upon me losing capacity..”.
In the first example, if the principal loses capacity outside San Francisco it would not terminate and yet, if the principal loses capacity in San Francisco, the Power of Attorney would terminate.
In the second example, if the principal loses capacity and Mary Smith is alive and functionally normally, the Power of Attorney would not terminate and yet, if Mary Smith was dead or incapacitated, the Power of Attorney would terminate.
These examples illustrate how unless a principal unconditionally, without qualification, prefers that their Power of Attorney terminates if they lose capacity, they would need to create a durable Power of Attorney.
¶ Case Study - Springing Powers of Attorney
¶ Introduction
This Case Study examines the concept of springing Powers of Attorney.
¶ Facts
¶ Example 1
Maria creates a Power of Attorney that:-
- includes a direction requiring her agent, Michael to take reasonable steps to meet every six (6) months with a co-agent, Jennifer, to review a plan in place to ensure a development application in respect of a block of land is lodged by a certain date two years from today, being an development application that Maria wants lodged between January 1, 2024 and December 31, 2025, when it is in the best interests of the principal
- entitles Michael and Jennifer to remuneration and expenses associated with their meetings
- authorizes Michael and Jennifer to lodge the development application between January 1, 2024 and December 31, 2025
¶ Example 2
Maria creates a Power of Attorney that states: “this Power of Attorney does not commence until 1 January 2029” and no other words that might qualify these words.
¶ Example 3
Maria has a spouse and children.
Maria creates two general Powers of Attorney:-
- one Power of Attorney commences today and terminates on the 70th birthday of her spouse, Michael, unless:-
- Michael dies prior to his 70th birthday, in which event the Power of Attorney terminates upon his death; and
- Michael loses capacity prior to his 70th birthday, in which event the Power of Attorney continues according to its terms, which provide Michael may only only perform tasks at any time during any period that Michael has capacity prior to his 70th birthday; and
- a second Power of Attorney which commence today and under which:-
- Maria and Michael's children are authorized to perform by agreement any task capable of being performed by an agent on and from Michael's 70th birthday unless Michael dies or loses capacity before Michael's 70th birthday, in which event Maria's children may commence to exercise authority under the second Power of Attorney immediately upon Michael's death or loss of capacity (during any period Michael lacks capacity)
- Michael is appointed and authorized as a co-agent to perform tasks independently at any time during any period that Michael has capacity
¶ Example 4
Maria has a spouse and children.
Maria creates two general Powers of Attorney:-
- one Power of Attorney commences today and terminates on the 70th birthday of her spouse, Michael, unless:-
- Michael dies prior to his 70th birthday, in which event the Power of Attorney terminates upon his death; and
- Michael loses capacity prior to his 70th birthday, in which event the Power of Attorney continues according to its terms, which provide Michael may only only perform tasks at any time during any period that Michael has capacity prior to his 70th birthday; and
- a second Power of Attorney which states it will “become effective” on Michael's 70th birthday, unless Michael dies or loses capacity before Michael's 70th birthday in which it will “become effective” upon Michael losing capacity, under which:-
- Maria and Michael's children are authorized to perform by agreement any task capable of being performed by an agent on and from Michael's 70th birthday unless Michael dies or loses capacity before Michael's 70th birthday, in which event Maria's children may commence to exercise authority under the second Power of Attorney immediately upon Michael's death or loss of capacity (during any period Michael lacks capacity)
- Michael is appointed and authorized as a co-agent to perform tasks independently at any time during any period that Michael has capacity
¶ Conclusion
¶ Comparing Example 1 and Example 2
In Example 1:-
- Michael and Jennifer will not perform what might be said to be the ‘core task’ until 2024 or 2025 and for example, there may be little for Michael or Jennifer to do in 2022, other than convene the meetings and presumably discuss when they might sensible commence to take ‘serious steps’ towards getting things done
- that said, they must convene meetings, become entitled to associated remuneration and expenses, assume fiduciary duties owed to the principal and similar, all of is consistent with the ‘commencement’ of the Power of Attorney
- the existence of entitlements, obligations and similar make clear the Power of Attorney is on foot
By contrast, in Example 2, Maria's Power of Attorney:-
- has literally no operation before 1 January 2029
- is expressed in particular, on terms that reflect it is not intended by Maria that the Power of Attorney will be binding upon her until 1 January 2029
- if signed by Maria after 1 January 2029 (i.e. properly executed),
- terms accordingly, seems to clearly fall afoul of §709.2108(3) in Florida.
¶ Examining Example 3
This arrangement is handy, because it means that:-
- while Michael is capable of making decisions a certain regime applies; and
- later in life, a new regime operates (perhaps under which Michael has authority to make decisions on his own and Maria's children may also together exercise authority by agreement); and
- if Michael predeceases Maria or loses capacity, Maria's children assume office in a scheme designed specifically for circumstances her children are in control, including directions and limitations applicable to circumstances where her children are handling Maria's affairs - rather than Maria's children simply replacing Michael under a scheme designed for when Michael was responsible for all of Maria's affairs
It would be considerably less satisfactory for example, if Maria merely identify Maria's children as successor agents to replace Michael under the first Power of Attorney because the following issues are unwieldy:-
- a Power of Attorney designed to appoint one agent (i.e. Michael) does not easily accommodate appointment of two agents
- issues for management in the wording of the Power of Attorney would include whether only one child could replace Michael at any given time
- the first Power of Attorney (for Michael) may have fewer checks and balances as compared to the second Power of Attorney intended for use by Maria's children solely if she lacks capacity
¶ Examining Example 4
This arrangement would be particularly problematic in Florida, where is handy, because §709.2108(3) also speaks of Powers of Attorney "“becoming effective”, stating:-
"..a Power of Attorney is ineffective if the power of attorney provides that it is to become effective at a future date or upon the occurrence of a future event or contingency”.
If it were found that the second Power of Attorney that is said to “become effective" at some future point in time fell afoul of §709.2108(3), it may for example, be declared to lack legal effect.
¶ Case Study - Military Powers of Attorney Raise Interesting Questions
¶ Introduction
This Case Study identifies two of many questions associated with military Powers of Attorney.
¶ Question 1
In New York, only a statutory Power of Attorney, that is a Power of Attorney created using a government form (§1504) is capable of being relied upon for the purpose of the third party enforcement regime operating in New York - would a military Power of Attorney be enforceable in the same manner if it was created without using a government form, because a military Power of Attorney is exempt from requirements as to form?
¶ Question 2
If a Power of Attorney created in accordance with the laws of Texas pertaining to durable Power of Attorney was executed before a military person so as to qualify as a military Power of Attorney, being a Power of Attorney in which the principal identified a protector and an agent sought to use the Power of Attorney in New York, where the notion of a protector is not recognized, would the appointment of a successor agent designated by the protector under the Power of Attorney be recognized in New York?
On one view, §1044b operates to cure defects as to form, substance or formality and any shortcoming as to preparation or execution and as such, §1044b does not operate to require New York to recognize or give effect to a Power of Attorney created other than in accordance with the laws of New York, merely recognize a Power of Attorney not executed in accordance with New York requirements as to form and execution, so to speak, although §5-1512 may bear upon the issues.
What if this question arose in Illinois? It seems the combined effect of §1044b and §2-10.6 in Illinois (similar to §5-1512 in New York) presents a basis to suggest there would be no difficulty, in terms of recognizing the actions of the protector.
¶ Case Study - The Concept of Inception In The Framework
The first part of the suggested framework for a Power of Attorney is 'Inception', dealing with when a Power of Attorney is binding upon the principal.
As it stands, many Powers of Attorney do not have a clause to the effect "this Power of Attorney is binding upon me upon me signing this Power of Attorney"
Without such a clause in a Power of Attorney:-
- it is considerably harder to define any other arrangement, because there are no words to modify
- it is inherently less certain what is intended by the principal with respect to when the Power of Attorney is intended to be binding upon them (such that at any time thereafter, an agents may accept appointment)
- this may be important for example:-
- in Florida where a Power of Attorney cannot be cast that "becomes effective" at a future point in time and for the reasons explained here in this Wiki, the view is taken that the words "become effective" refer to the Power of Attorney becoming binding upon the principal and the principal wants to make clear that the the Power of Attorney is intended to become effective when it signed by the principal, even if the Power of Attorney only authorizes agents to perform certain tasks after a certain point in time
- in the context of perhaps choosing to include detailed provisions (at the end of the Power of Attorney) dealing with circumstances where an agent signs a Power of Attorney before it has become effective upon the principal, which would be an unusual but not possibility, particularly in states other than Florida where a principal wants their Power of Attorney only be effective upon them at some future point in time, after they have signed the Power of Attorney and does not want any confusion arising where an agent signs the Power of Attorney before that time (accepting that without 'detailed provisions' dealing with this issue, such a Power of Attorney might raise a question as to whether acceptance of appointment by an agent can be valid where an agent purports to accept appointment before the Power of Attorney has become binding upon the principal)
This example illustrates the importance of actual words in a Power of Attorney addressing all relevant issues, rather than short form Powers of Attorney that lack the detail necessary to permit tailored arrangements to be crafted.
¶ Case Study - Fulfilment of Purpose
Imagine a person called Mike has a durable Power of Attorney under which Olivia is authorized to manage Mike's financial affairs if the Mike loses capacity.
Mike's Power of Attorney cannot terminate by virtue of fulfilling its purpose, because the authorized task is to be performed on an ongoing basis.
Having said this, there may be delicate considerations as illustrated in the Case Study - Temporal Nexus Affects Prospects To Fulfil Purpose below.
¶ Case Study - Temporal Nexus Affects Prospects to Fulfil Purpose
Imagine a property developer creates a Power of Attorney authorizing agents to perform certain tasks between departure and return dates for an overseas trip.
Consider that the task they are authorized to perform is "take all steps to promote to completion the development known as ..."
Compare that:-
- if the relevant Power of Attorney were given at the end of the development to sell the last two apartments in the block, that would actually seem to be a task capable of being fully completed
- if the Power of Attorney were given in the first year of the development enable an agent take all steps necessary to progress the development towards the final sale of all units there would be no issue about fulfilment of its purpose
This example illustrates how determining whether the purpose of a Power of Attorney could be or has been fulfilled involves examination of all of its terms and surrounding circumstances.