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Protecting Californians.
¶ What is a Protector?
This page explains
¶ Why Does The Term “Protector” Mean?
The term ‘protector’ is used in this Wiki to refer to a legal entity that is authorized under legislation governing Powers of Attorney for persons[1] to “designate” or “appoint” successor agents under a Power of Attorney.
¶ 
What Is A Protector
- Protector in (CA, TX, IL & PA)
- Comparing protectors in California, Texas, Illinois & Pennsylvania
- Identification by name, office or function
- Appointing a commercial entity as protector
- Shortcomings associated with a protector
- Must protector be an appointed agent in Pennsylvania
- Commercial entities identifying a protector
- Protector being identified after Power of Attorney created perhaps in a separate document
- Protector needing to accept appointment & obligations
- Positive duty to act
- Supervision of protector
The term ‘protector’ is used in this Wiki to refer to a legal entity that is authorized under legislation governing Powers of Attorney for persons[1:1] to “designate” or “appoint” successor agents under a Power of Attorney.
¶ The Legislation in California, Texas, Illinois & Pennsylvania
| California | §4203 provides that “the principal may grant authority to another person, designated by name, by office, or by function… to designate at any time one or more successor attorneys-in-fact” |
| Texas | In Texas (in respect of a durable Power of Attorney) legislation refers to “grant[ing] authority to designate one or more successor agents to an agent or other person designated by name, office, or function": §751.023 |
| Illinois | The principal may appoint a “grant authority to another person, designated by name, by office, or by function, including an initial or successor agent, to designate one or more successor agents" §2-10.3 |
| Pennsylvania | §5602 legislation governing Powers of Attorney for persons[2] says a principal may provide for “the delegation to an original or successor agent of the power to appoint his successor or successors” |
¶ New York & Florida
In New York and Florida, legislation governing Powers of Attorney for persons[3] makes no mention of a protector:-
- there may be debate as to whether a protector may be appointed
- the law regarding powers of appointment may assist in answering the question of whether a protector may be appointed (being outside the scope of this Wiki)
Perhaps in Florida, the restrictive approach seen in prohibition of the appointment of sub-agents (unlike the other five (5) of the Six (6) Greater States) reflects a generally conservative approach, which might extend to restriction of delegation of a power of appointment (see §709.2114(b)).
With respect to appointment of a protector in respect of a non-durable Power of Attorney in Texas:-
- it remains a matter of common law whether a protector can be appointed
- if the view be taken that a protector is a fiduciary, any corporation proposed for appointment as a protector would need to be authorized (see §304.003(4) discussed in more detail below)
¶ Comparing Protectors in California, Texas, Illinois and Pennsylvania
¶ Choice of Protector
In California, Texas and Illinois in respect of a Power of Attorney for a person[4]:-
- choice of protector is not limited to only include an agent or successor agent (as is the case in Pennyslvania)
- a protector may be identified by name, office or function
- a protector may “designate” a successor agent (as opposed to “appoint” in Pennsylvania)
- the term “designate” seems to contemplate a candidate being identified as a candidate, that is, someone identified for appointment in the future
- this approach seems consistent with the extensive use of the word “designate” in the legislation of California, Texas and Illinois
In Pennsylvania in respect of a Power of Attorney for a person,[5] things work differently:-
- an agent or successor agent may be authorized to “appoint” their own replacement
- the term “appoint” may have a different meaning to the word “designate” used in California, Texas and Illinois in the same context:-
- “appoint” might be read restrictively, so as to mean that a protector cannot merely name a candidate, only actually appoint a successor agent
- “appoint” might be read expansively, permitting a protector to do everything incidental to appointing a successor agent who need not be taking office at any particular time and for example, permit a protector to appoint a professional who intends to charge for their services as a successor agent
¶ Identification By Name, Office or Function
In California, Texas and Illinois, a principal in respect of a Power of Attorney for a person[6] may identify a protector by name, office or function.
The terms “office” or “function” presumably account for a principal identifying as a protector persons like:-
- the oldest appointed agent under the Power of Attorney
- an officer of a church (i.e. the Bishop of the Catholic Church, Brooklyn etc.)
- the principal’s day-to-day accountant
Where a principal prefers to identify a protector by office or function, certainty is the key.
For example, to identify as a protector “the Bishop of the Catholic Church” would not be effective, given there are multiple bishops in many states of America.
¶ Appointment of a Commercial Entity As A Protector
Perhaps in California, Illinois & Pennsylvania and perhaps even in Texas, a protector might be a commercial entity.
¶ California and Illinois
The relevant legislative provisions respectively speak of appointment of “another person… including an initial or successor agent” by the principal (§4203 CA; §2-10.3 IL).
- the legislation in which these words appear applies to Powers of Attorney created by persons
- the term “another person” might infer that a protector may only be a person (i.e. not a commercial entity)
- against this conclusion and in favour of the entitlement of a principal to appoint a protector that is a commercial entity:-
- in California, the term “person" is defined in §56 to mean ”individual, corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership, limited liability company, association, or other entity"
- in Illinois,§2-3 defines the term “person” to include “an individual, corporation, trust, partnership or other entity, as appropriate to the agency”
It may be that a commercial entity that is an agent or successor agent could also be a protector, possibly subject to requirements of the kind seen in Texas, requiring a corporation to be authorized.
¶ Texas
In Texas, legislation only governing durable Powers of Attorney refers to a “grant [of] authority to designate one or more successor agents to an agent or other person designated by name, office, or function": §751.023.
The expression "an agent or other person” calls into question whether a commercial entity may be appointed as an agent, discussed under the heading A Commercial Entity May Be An Agent, accepting that if a commercial entity may be appointed as an agent, it follows that a protector may be a commercial entity.
That is not the end of the inquiry, accepting that if a commercial entity cannot be appointed as an agent, it is also possible that the term “person” in §751.023 includes a commercial entity.
In the definitions chapter of the Texas Probate Code, the term “person” is defined as “including a natural person and a corporation” (§22.027).
There appears to potentially be real support for the entitlement of a principal to appoint a commercial entity as an agent, seen for example in articles like A Guide to Fiduciary Selection, Estate Planning Developments for Texas Professionals, Gerry Beyer, Texas Tech University School of Law, July 2014 which pre-dates the 2018 reforms in Texas but nonetheless, seems to support the notion of a commercial entity being appointed as an agent, accepting the article states “A corporation must be authorized to act as a fiduciary under Texas law… §304.003(4)..”
¶ Pennsylvania
In Pennsylvania, an agent or successor agent may be authorized to “appoint” a successor agent for themselves.
Similar to the position in Texas, this calls into question whether whether a commercial entity may be appointed as an agent, discussed under the heading A Commercial Entity May Be An Agent.
In Pennsylvania:-
- §5601(f) defines an agent as “a person designated by a principal in a power of attorney to act on behalf of that principal”
- “Person” is defined in §1991 to include “…a corporation, partnership, limited liability company, business trust, other association, government entity (other than the Commonwealth), estate, trust, foundation or natural person”
It seems to follow that an agent or successor agent may be a commercial entity and that a commercial entity that is an agent or successor agent could also be a protector, possibly subject to requirements of the kind seen in Texas, requiring a corporation to be authorized.
¶ New York and Florida
If it is possible to identify a protector in New York or Florida, where legislation makes no mention of a protector, it may be possible to appoint a commercial entity as a protector.
It may be that a commercial entity that is an agent or successor agent could also be a protector, possibly subject to requirements of the kind seen in Texas, requiring a corporation to be authorized.
¶ Shortcomings Associated With A Protector
¶ Clarity of Operation
The notion of a ‘protector’ is poorly dealt managed in legislation, which does not address issues like:-
- is a protector a fiduciary, so as to require authorization if the protector is a commercial entity? (see §304.003(4) in Texas discussed above and any similar provisions on the other five (5) of the Six (6) Greater States)
- does the term “designate” entitle a protector to depose an appointed successor agent, so as to in effect enable a protector to not only name a candidate for appointment as a successor agent under a durable Power of Attorney, but also for example, direct that the candidate replace an appointed successor agent?
- does the term “designate” entitles a successor agent to ‘withdraw’ a designation, before the designated person is appointed?
- does the term “appoint” refer only to appointment in the event of a vacancy in office, or does it permit a protector to name a candidate for appointment in the event of a vacancy?
- can a protector impose conditions or define a term of appointment in respect of a “designated” or “appointed” candidate for appointment as a successor agent?
- does a protector need to accept appointment?
Presumably, it is up the principal to deal with these kinds of issues in their Power of Attorney.
¶ Omission From Government Forms
Optional government forms do not include space to record a protector, noting:-
- in California and Texas, the optional government form includes no specific provision for recording the identity of a protector
- in Illinois, the government form refers in the ‘additional powers’ section to recording of powers of appointment in favour of an agent (which would not assist where the principal appoints a protector who is not an agent)
- Pennsylvania nd Florida do not have a government form
- in New York the government form contains no provision for recording a protector, which is unsurprising given the notion of a protector in New York is not included in the legislation
¶ Must Protector Be An Appointed Agent in Pennsylvania
In Pennsylvania, §5602(b) says that a principal may provide for “the delegation to an original or successor agent of the power to appoint his successor or successors”
§5602(b) does not speak of someone ‘named as a potential agent’ or ‘named as a potential successor agent’.
Perhaps the effect of §5602(b) is to only permit an appointed agent or a successor agent to name their own successor(s), as opposed to also authorizing a ‘mere candidate’ for potential appointment as an agent or a successor agent to name their successor(s), if so authorized by the principal.
¶ Commercial Entities Identifying A Protector
The legislation does not govern Powers of Attorney created by a commercial entity.
For this reason, the legislation is of no help in determining whether a commercial entity may name a protector in a Power of Attorney.
Naming of a protector in a Power of Attorney appears to amount to exercise of a power of appointment or delegation of a power of appointment, being topics that are outside the scope of this Wiki.
There does not appear to be any obvious basis to resist the conclusion that a commercial entity may exercise a power of appointment or delegate a power of appointment, which may justify the conclusion that a commercial entity may name a protector in a Power of Attorney.
Each of the Six (6) Greater States may approach this issue differently.
¶ Protector Being Identified After Power of Attorney Created And Perhaps In A Separate Document
Whether the appointment of a protector may be recorded in a separate document created after a Power of Attorney is created is uncertain.
Where a separate document is contemplated for possible use, questions might include whether it constitutes an amendment to the Power of Attorney and as such, must satisfy any requirements applicable to amendment.
¶ Protector Needing To “Accept Appointment”
It appears that a protector does not formally need to ‘accept appointment’, unless perhaps the Power of Attorney specifies otherwise.
¶ Positive Duty To Act
In California, Illinois & Pennsylvania, the legislation does not relieve a protector of any positive duty to act, which is at odds with provision in the same legislation excluding a positive duty to act on the part of an agent - see the heading In Some Of the Six (6) Greater States A Positive Duty To Act Is Positively Excluded.
In Texas, legislation does not expressly exclude the existence of a positive duty to act and expressly recognizes the existence of a fiduciary duty (§751.101) which might amount to imposition of a positive duty to act upon an agent.
It follows that at least in Texas where an agent is named as a protector, they may be subject to a positive duty to act, even if this be ‘by default’, as part of ther duties as an agent in circumstances where they are also named as a protector.
Whatever be the position:-
- there is nothing to prevent a principal from entering an agreement with a protector requiring them to act (i.e. imposing a positive duty to act)
- a prudent principal might consider including relevant terms either in the Power of Attorney or a separate agreement
¶ Supervision Of Protector
A prudent principal might consider entering arrangements dealing with supervision of the performance of a protector.
For example, a principal might execute a separate Power of Attorney authorizing a suitable body of agents to supervise the protector and ensure that the protector performs their functions.
Being not Powers of Attorney excluded from the ambit of the legislation - click here to read more. ↩︎ ↩︎
Ibid. ↩︎
Ibid. ↩︎
Being not a Power of Attorney excluded from the ambit of the legislation - click here to read more. ↩︎
Ibid. ↩︎
Ibid. ↩︎