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Protecting Californians.
Do You Need A Power of Attorney?
The headings on this page are:
About Titles
About Types
| Basic Types | Non-Durable / Durable / Non-Statutory / Statutory |
| Hybrid | Non-Statutory Non-Durable / Non-Statutory Durable / Statutory Non-Durable / Statutory Durable |
| Variant | Commercial / Military / Legislative / Contractual / Oral / Irrevocable / General / Limited, Special & Specific / Springing / Temporary |
Note: Not including Powers of Attorney for health purposes.
Titles of Powers of Attorney reflect variously upon matters such as the purpose or terms of a Power of Attorney, or the circumstances in which a Power of Attorney has been created.
Examples of titles include:
commercial, non-statutory non-durable, non-statutory durable, non-statutory, non-durable, durable, statutory, military, legislative, contractual, oral, irrevocable, general, limited, special, specific, springing, temporary and ordinary.
It is benign to suggest that a single word might inform a reader of all of the minutiae associated with appointing an agent under a Power of Attorney.
Titles like commercial, non-statutory non-durable, non-statutory durable, non-statutory, non-durable, durable, statutory, military, legislative, contractual, oral, irrevocable, general, limited, special, specific, springing, temporary and ordinary often seem as helpful as they are bewildering.
Every Power of Attorney is unique, although government forms are considerably more generic than custom-made Powers of Attorney.
Knowing the purpose of a Power of Attorney without its terms, or its terms without its purpose, is not particularly informative, which illustrates the problem with 'one word' titles, of the kind cited under the heading "Examples" above.
Understanding the design of a Power of Attorney requires reading its terms as a whole[1] in conjunction with any relevant legislation.
Legislation governs Powers of Atttorney for persons[2]:-
Particular nomenclature may be nonsensical in some of these states.
For example:-
in Florida:-
in Pennsylvania, a government form is not promulgated, rendering it a nonsense to speak of statutory and non-statutory Powers of Attorney
In Texas, a Power of Attorney is not governed by legislation if it is either:-
The distinction between non-durable Powers of Attorney and durable Powers of Attorney is frustrating because:-
The problem is much bigger than distinguishing non-durable and durable Powers of Attorney, because:-
These examples merely illustrate the limited utility in giving a Power of Attorney any particular title of the kind under the heading "Examples" above. A single word does not convey an account of the many features of a Power of Attorney that which would need to be addressed, if a title was to be genuinely useful.
A Power of Attorney might be likened to a motor vehicle.
Imagine if you were only told a particular car was a certain color, or had 6 cylinders, or its manufacturer, or model.
Insight about one feature of a car is unlikely to say much, even if it is a comparably important piece of information.
By contrast, if you were told it is a red, convertible, automatic, 6 cylinder, turbo charged, 2017 BMW 2 Series.. this would be more helpful.
Even these details wouldn't tell you if it was in good condition, or had certain modifications or accessories.
Ultimately, there would be no substitute for inspecting the vehicle in person.
Similarly, there is no substitute for reading a Power of Attorney in full, to understand how it works.
To understand the meaning of "non-durable Power of Attorney" it is necessary to first appreciate that a durable Power of Attorney is a Power of Attorney that performs in accordance with its terms, is not terminated, suspended or deemed voidable, as a consequence of the principal losing capacity, being a Power of Attorney for a person that is not excluded from the ambit of the legislation.
If durable Powers of Attorney had not been developed in around 1960, there would have been no need to develop the term "non-durable" Power of Attorney, which gives the term "non-durable" an unusual, limited purpose.
It follows that in this Wiki, the following description of a non-durable Power of Attorney is preferred:
"A non-durable Power of Attorney is a Power of Attorney that, upon the principal losing capacity does not continue to operate by virtue of operation of law, perhaps terminating, being suspended or becoming voidable by virtue of operation of common law or statute, being a Power of Attorney for a person that is not excluded from the ambit of the legislation.
A non-durable Power of Attorney is often defined as:
"..a Power of Attorney that terminates immediately upon the principal losing capacity.."
The usual definition, focusing upon termination, overlooks that at common law outcomes are not limited to termination and include for example, the Power of Attorney being suspended or becoming voidable.
Alternative outcomes to termination are discussed in articles like Does The Agency Die When The Principal Becomes Mentally Incapacitated? by Alfred Mukatis (1983) & Incompetent Principals, Competent Third Parties, and the Law of Agency by Alexander Meiklejohn (1986).
In California termination is an inherently more likely outcome at least with respect to a Power of Attorney that is for a person and not excluded from the ambit of the legislation, because in California §4155 specifically addresses termination, being a provision which has no equivalent in the other Six (6) Greater States.
In California, §4155 provides:-
"..the authority of an [agent] under a nondurable Power of Attorney is terminated by the incapacity of the principal to contract.."
§4155 in California is unlikely to be exclusive so as to replace any common law that may result in any other outcome with respect to Powers of Attorney that are not excluded from the ambit of the legislation.
As to why this is correct, consider the need to accommodate for example, persons who wish to create a Power of Attorney that is not excluded from the ambit of the legislation under which an agent is authorized to perform certain tasks between two, future dates if the principal lacks capacity between those two dates, without authority to act at any other time if the principal lacks capacity, the point being that if §4155 was proscriptive in this instance, the Powers of Attorney would terminate if the principal lost capacity prior to the earlier of the two dates, being an outcome unlikely to have been intended by the legislature when §4155 was enacted.
It follows that the operation of §4155 in California is limited to recognising termination upon the principal losing capacity as a requirement relevant to a non-durable Power of Attorney and any Power of Attorney that does not terminate at such time which is for a person and not excluded from the ambit of the legislation needing to comply with the requirements of a durable Power of Attorney, or risk falling into the uncertain territory where a Power of Attorney is neither non-durable or durable in the sense that the Power of Attorney fulfils neither of the statutory constructs described by these terms.
Where a Power of Attorney is for a person and not excluded from the ambit of the legislation and does not state that it terminates upon the principal losing capacity and does not satisfy the requirements of a durable Power of Attorney, it would seem to be subject to any applicable common law defining outcomes with respect to the Power of Attorney in the event that the principal loses capacity, because §4155 is not proscriptive (for the reason explained in the previous paragraph) and so, where the Power of Attorney does not prescribe that it terminates upon the principal losing capacity and termination is not the appropriate outcome at common law, the outcome as prescribed at common law would operate, alternative outcomes (such as the Power of Attorney being suspended or becoming voidable) being discussed in articles like Does The Agency Die When The Principal Becomes Mentally Incapacitated? by Alfred Mukatis (1983) & Incompetent Principals, Competent Third Parties, and the Law of Agency by Alexander Meiklejohn (1986), as referred to above.
In respect of a Power of Attorney for a person that is not excluded from the ambit of the legislation in California :-
§4155 states “..the authority of an [agent] under a nondurable Power of Attorney is terminated by the incapacity of the principal to contract..”
§4018 states “Durable power of attorney” means a power of attorney that satisfies the requirements for durability provided in §4124"
§4124 deals with mandatory inclusion of an expression of durable intent, being “words showing the intent of the principal that the authority conferred shall be exercisable notwithstanding the principal's subsequent incapacity”
§4022 provides "..a Power of Attorney may be durable or nondurable.."
§4030 provides (bold added): “A springing Power of Attorney may be a durable power of attorney or a nondurable Power of Attorney…”
Similar to Powers of Attorney that are not subject to the legislation[8], a distinction between durable and non-durable with respect to a Power of Attorney for a commercial entity being durable or non-durable is a nonsense.
There is no reason to draw a distinction with respect to non-durable or durable Powers of Attorney for a commercial entity, because the concept of durability is not relevant to a commercial entity.
This is because:-
Other than in California, only the legislation of New York mentions the word "non-durable", being no more than an innocuous refererence in §5-1504 in the context of enforcement against third parties, being with respect to an enforcement regime that only operates in respect of Powers of Attorney for a person that are not excluded from the ambit of the legislation, being also a government form.
The term "non-durable" is not mentioned in the legislation of Texas, Florida, Illinois or Pennsylvania.
The terms "not durable" and "not a durable" are mentioned in the legislation of New York and Pennsylvania respectively:-
A Power of Attorney that is excluded from the ambit of the legislation would be confusingly called non-durable or durable.
It is confusing because:-
With respect to California outcomes where a Power of Attorney does not comply with the mandatory requirements applicable to a durable Power of Attorney and is not said to terminate immediately upon the principal losing capacity are discussed under the heading The Uncertain Territory above.
Things become interesting where a Power of Attorney for a person is not excluded from the ambit of the legislation and:
does not comply with mandatory requirements applicable to a durable Power of Attorney and yet for example, is somehow indicated to be perhaps intended to be a durable Power of Attorney
is consistent with being a non-durable Power of Attorney and yet, complies with the mandatory requirements applicable to a durable Power of Attorney
in some ways is consistent with being both a non-durable or durable Power of Attorney
These possibilities are not as remote as they may seem.
Consider for example, a Power of Attorney in California, Texas or Florida (being states that require the inclusion of an expression of durable intent) that includes an expression of durable intent but is not properly executed in accordance with the mandatory requirements applicable to a durable Power of Attorney.
There are other examples of how this kind of difficulty might arise, although examples tend to involve some error being made in the drafting of the Power of Attorney, for example a Power of Attorney in California, Texas or Florida (being states that require the inclusion of an expression of durable intent) that includes an expression of durable intent and is properly executed and otherwise complies with the mandatory requirements applicable to a durable Power of Attorney, but irregularly also contains an expression to the effect "this Power of Attorney will terminate upon the principal losing capacity".
These kinds of difficulties seem inherently less likely to arise in respect of Powers of Attorney in New York, Pennsylvania and Illinois, where a Power of Attorney is assumed to be durable unless the Power of Attorney prescribes otherwise, which is presumably part of the explanation as to why this approach is preferred in these states.
Issues arising where a Power of Attorney does not comply with mandatory requirements are discussed further under the heading Failure to Comply With Mandatory Requirements.
Sometimes, the term “ordinary Power of Attorney” is used to identify a non-durable Power of Attorney.
Legislation enacted in Texas deals with durable Powers of Attorney and makes no reference to non-durable Powers of Attorney.
That is not to say that non-durable Powers of Attorney do not exist in Texas, merely that they receive no attention in the legislation.
The legislation of Texas includes §751.003, in respect of which there no equivalent in any of the other five (5) of the Six (6) Greater States.
§751.003 states:
"This subtitle shall be applied and construed to effect the general purpose of this subtitle, which is to make uniform to the fullest extent possible the law with respect to the subject of this subtitle among states enacting these provisions.."
§751.003 may be of relevance in determining how things work in Texas, with respect to durable and non-durable Powers of Attorney.
That is not to say that the effect of §751.003 in Texas is particularly clear, in particular with respect to what the term "states enacting these provisions" in §751.003 means.
§751.003 in Texas was introduced in 2011 and amended to add the underlined section in 2017:-
Sec. 751.003. UNIFORMITY OF APPLICATION AND CONSTRUCTION
"This subtitle shall be applied and construed to effect the general purpose of this subtitle, which is to make uniform to the fullest extent possible the law with respect to the subject of this subtitle among states enacting these provisions."
The 2011 amendments to the Power of Attorney legislation in Texas formed part of wider changes to the legislation discussed in articles like The Story of the Texas Estates Code by William D. Pargaman (2014).
Because the insertion of §751.003 post-dates the 2006 ULC recommendations, when considering the effect of §751.003 there may be a question as to the extent to which the 2006 ULC recommendations were taken up in Texas and other states, in particular because if the 2006 ULC recommendations were taken up in Texas then the term "these provisions" might refer to the 2006 ULC recommendations in which event, only the legislation of states that also took up the 2006 ULC recommendations would be relevant in this context.
In the Enactment History for the 2006 ULC recommendations (as amongst the Six (6) Greater States) it is suggested that only Texas and Pennsylvania took up the 2006 ULC recommendations.
If the term "these provisions" refers to the 2006 ULC recommendations (as opposed to say, a reference to enactment of any provisions dealing with durable Powers of Attorney), it would mean that uniformity considerations only extend to Pennsylvania when looking at the Six (6) Greater States, noting none of the remainder of the Six (6) Greater States are said to have taken up the 2006 ULC recommendations, at least in the Enactment History.
If the term "these provisions" does not refer to the 2006 ULC recommendations, further consideration would need to be given to what the words "these provisions" refer to in §751.003 and due consideration given to which states have enacted those provisions, to understand and apply §751.003.
§751.001 states "This subtitle may be cited as the Durable Power of Attorney Act", being the sub-title referred to in §751.003, which might suggest reference is being made to any state that has enacted legislation dealing with durable Power of Attorney however this seems to be incorrect, given that §404 of the 2006 ULC recommendations recommends repeal of any Durable Power of Attorney Act and §104 of the 2006 ULC recommendations is in direct conflict with §751.0021 of the Texas Probate Code, raising questions as to how it is said in the Enactment History in respect of the 2006 ULC recommendations that Texas took up the 2006 ULC recommendations and suggesting that Texas did not take up the 2006 ULC recommendations in important respects, meaning that the term "these provisions" could not be referring to the 2006 ULC recommendations.
Legislation makes no reference to non-durable Powers of Attorney.
Legislation provides with respect to a Power of Attorney for a person that is not excluded from the ambit of the legislation that:
Because §709.2109 is proscriptive, things work differently in Florida as compared to California, where §4155 appears to be non-proscriptive, as discussed under the heading The Uncertain Territory in California above.
Words like 'the authority conferred shall be exercised notwithstanding the principal's subsequent disability or incapacity' are required in a durable Power of Attorney (§709.2104).
It follows that in Florida, a Power of Attorney that does not include words like 'the authority conferred shall be exercised notwithstanding the principal's subsequent disability or incapacity' is non-durable and terminates upon the principal losing capacity.
Having regard to the intracies associated with non-durable in California and Texas discussed above, it is arguable that the approach taken in Florida through §709.2102 and §709.2109 is to be preferred, accepting California and Texas also require inclusion of an expression of durable intent, unlike New York, Illinois and Pennsylvania.
Legislation expressly provides that a Power of Attorney for a person that is not excluded from the ambit of the legislation is durable unless it provides otherwise:
§5-1501A in New York states: "A Power of Attorney is durable unless it expressly provides that it is terminated by the incapacity of the principal"
§5601.1 in Pennsylvania states: “..unless specifically provided otherwise in the Power of Attorney, all Powers of Attorney shall be durable as provided in §5604..”
§2-5 in Illinois states: "Unless the agency states an earlier termination date, the agency continues until the death of the principal, notwithstanding any lapse of time, the principal's disability or incapacity or appointment of a guardian for the principal after the agency is signed"
In New York, legislation also provides in respect of a Power of Attorney for a person[9] that “..a Power of Attorney terminates when the principal becomes incapacitated, if the Power of Attorney is not durable…” (§1511)
The only reference to the precise term “non-durable” in the legislation of New York is in §5-1504, being an innocuous refererence in the context of an enforcement regime that only operates in respect of Powers of Attorney cast using a government form for a person, being a Power of Attorney not excluded from the ambit of the legislation.
§5-1504 states (bold added):
"No third party located or doing business in this state shall refuse, without reasonable cause, to honor a statutory short form Power of Attorney properly executed in accordance with section 5-1501B of this title, or a statutory short form Power of Attorney properly executed in accordance with the laws in effect at the time of its execution.
(a) Reasonable cause under this subdivision shall include, but not be limited to:
..(5) actual knowledge of the incapacity of the principal or a reasonable basis for believing that the principal is incapacitated where the Power of Attorney tendered is a nondurable Power of Attorney"
Both California and New York prefer the term "nondurable" as opposed to "non-durable" in their legislation (see §5-1504 (NY) and §4155, §4022 & §4030 (CA)) whereas the term “non-durable” is preferred in this Wiki.
In Illinois and Pennsylvania:-
in Pennsylvania §5605 states (bold added):
"..the disability or incapacity of a principal who has previously executed a written Power of Attorney which is not a durable power shall not revoke or terminate the agency as to the agent or other person.."
§5605 merely addresses circumstances where an agent or third party is unaware of incapacity of the principal, making the reference to a Power of Attorney "which is not a durable power" somewhat innocuous.
By contrast, in Illinois there is no reference to concepts like "not durable" or "non-durable" anywhere in the legislation.
The Exposé about durable Powers of Attorney on the next page of this Wiki addresses general and technical aspects of durable Powers of Attorney seperately.
General aspects deal with:-
Technical aspects deal with precisely how things work having regard to the minutiae of the legislation, for example with respect to:-
For the reasons explained in the Exposé which appears on the next page of this Wiki, in this Wiki the following approach to durable Powers of Attorney is preferred:
In this Wiki, the following approach to durable Powers of Attorney is preferred.
¶ At Common Law
At common law, the agency relationship and the agent's authority to act are terminated on the death, bankruptcy or incapacity of the principal.[10]
Consequently, to create a Power of Attorney that does not terminate on the incapacity of the principal, legislation is required.
¶ Where
All of the Six (6) Greater States have passed legislation recognizing the right of a person to create a durable Power of Attorney.
¶ Requirements
A durable Power of Attorney must not be for a purpose that is excluded from the ambit of the legislation.
A durable Power of Attorney must comply with certain mandatory requirements.
¶ Exclusions and Mandatory Requirements
Relevant exclusions and mandatory requirements are imposed under the legislation of each of the Six (6) Greater States.
The exclusions and mandatory requirements in any of the Six (6) Greater States may be the same as or different to the exclusions and mandatory requirements in any of the other Six (6) Greater States.
¶ Legislation
In 1954, Virginia, was the first state to allow a Power of Attorney to continue beyond the principal's incapacity.[11]
¶ Estate Planning Purposes
The durable Power of Attorney is most commonly used to handle the affairs of an incapacitated person without court supervision.
¶ Business Purposes
Any person undertaking a substantial transaction of any kind, in particular a transaction that might result in a claim for damages in the event the person does not fulfil their side of the contract (i.e. a contract to buy a house, purchase a business etc. sell certain property etc.) or who engages in these kind of transactions from time to time, would be well placed to create a durable Power of Attorney.
If you are entering such a transaction with a person, you my prefer that the person you are doing business with properly executes a durable Power of Attorney authorizing an agent to complete the transaction on their behalf, if they lose capacity.
¶ Examples of Designs
A durable Power of Attorney might authorize an agent to act after a certain future date, if the principal lacks capacity, or upon as the happening of an event, such as a birth or adoption of a first child, marriage or someone's death and thereafter operate if the principal lacks capacity.
A durable Power of Attorney might authorize an agent to act between two dates in the future:-
if the principal lacks capacity between those two dates, without authorizing the agent to act before the earliest of those two dates even if the principal lacks capacity
whether or not the principal lacks capacity between those two dates and authorize the agent to act before the earliest of those two dates, if the principal lacks capacity earlier in time
A durable Power of Attorney might for example, authorize an agent to act before a certain date whether or not the principal lacks capacity and only after that date if the principal has capacity, or perhaps only if after that date if the principal lacks capacity etc.
Even a durable Power of Attorney that authorize an agent to act if the principal lacks capacity raises design considerations, such as considerations for the purpose of determining capacity, which might be a matter, for example:-
- determinable by an agent
- requiring a doctor to furnish a report confirming that the principal lacks capacity
- be assigned for determination by multiple agents jointly, or by majority
- certified by an agent
There are lots of possible designs, although perhaps using the simplest design is best, ensuring that where a Power of Attorney operates between two future dates, during the period between the two dates, the agent may act whether or not the principal lacks capacity, removing capacity as an issue in various respects that might otherwise arise, if uncertainty about the capacity of the principal could be relevant to the principal's affairs under the Power of Attorney.
More sophisticated designs of durable Powers of Attorney for example, might authorize an agent or different agents to perform different tasks, or certain tasks differently, depending upon whether the principal has or lacks capacity.
¶ Simplest Design
The simplest design is a durable Power of Attorney that authorize an agent to act whether or not the principal lacks capacity, from the moment that the principal properly executes the Power of Attorney.
This simple design substantially removes the need to consider whether or not the principal lacks capacity (other than at the time that the Power of Attorney is properly executed by the principal, reducing the possible need to consider medical evidence in the context of a dispute about the Power of Attorney and for example, ensuring an agent is always confident that they have authority, without regard to the principal's capacity.
¶ Nuances In The Six (6) Greater States
Things work differently in the Six (6) Greater States.
Florida
Florida has prohibited Powers of Attorney that “become effective” in the future (see §2201(1).
This is interesting because:-
- Florida does not have a government form which might shed light on the implications of this limitation
- Florida does not appear to prohibit the use of a Power of Attorney that is immediately binding upon the principal and authorizes an agent or different agents to perform certain tasks until some future point in time
- a Power of Attorney designed to authorise the performance of particular tasks at some future point in time in Florida might usefully include some innocuous task in such a Power of Attorney that may be performed forthwith upon the Power of Attorney being properly executed by the principal, making clear that for example, that all other tasks authorized to be performed by an agent or different agents under the Power of Attorney may only be performed at a later, nominated point in time, to minimise the risk that a poor approach is taken by someone to §2201(1), which might otherwise compromise the operation of such a Power of Attorney.
California
to be inserted
Texas
to be inserted
New York
to be inserted
Illinois
to be inserted
Pennsylvania
to be inserted
The term “non-statutory” is a convenient label to attach to any Power of Attorney for a person[2:1] that is not created using a government form, which is the sense in which the term “non-statutory” is used in this Wiki.
Other approaches to the term “non-statutory” might include the term identifying a Power of Attorney that is excluded from the ambit of the legislation, that is, not governed by legislation.
The latter approach is not common.
The notion of a “non-statutory” Power of Attorney as a Power of Attorney not created using a government form accords with the definition of “non-statutory Power of Attorney" in §5-1501 in New York.
In §5-1501, the term “non-statutory Power of Attorney” is defined in New York as follows:
"Non-statutory power of attorney” means a power of attorney that is not a statutory short form power of attorney"
In, California, Texas and Illinois, the term “non-statutory Power of Attorney” is not defined in legislation.
In Florida and Pennsylvania there is no government form, rendering the term non-statutory redundant.
The term “statutory” refers to a Power of Attorney created using a government form.
A government form is available in California (§4401) Texas (§752.051) New York (§1513) and Illinois (§3-3).
The term “statutory” is used in the titles given to government forms in California, Texas, New York and Illinois.
A statutory” Power of Attorney may only be used by a person.
In some circles, the term “statutory” might be said to be a Power of Attorney that is governed by legislation. The term “statutory” is not used in this manner in this Wiki.
In Florida and Pennsylvania:-
In California:-
In Texas:-
In Illinois:-
In New York:-
The term Statutory Durable Power of Attorney is perhaps more appropriately used in states like Texas where a government form is only available to create a durable Power of Attorney (§752.051).
By contrast, in California, New York and Illinois a government form may be used for non-durable or durable purposes.
The government form available in California, New York and Illinois may be used for non-durable or durable purposes.
Legislation governing Powers of Attorney for a person[4:1] adds nuances to the ‘statutory’ tasks, for example:-
In Pennsylvania, a 'broadening authority' is included in respect of specific statutory tasks (see an example re §5603).
Division 4.5 governs statutory Powers of Attorney in California.
§4401 contains the government form, known as a UNIFORM STATUTORY FORM POWER OF ATTORNEY and referred to in the legislation as a “statutory form Powers of Attorney under Part 3” (see for example, §4100) which may be durable or non-durable.
In New York §5-1513 contains the government form.
§5-1501 provides:
"Statutory short form Power of Attorney" means a Power of Attorney that meets the requirements of paragraphs (a), (b) and (c) of subdivision one of §5-1501B of this title, and that substantially conforms to the wording of the form set forth in §5-1513 of this title..."
A Statutory short form Power of Attorney may be non-durable or durable.
In Texas a Statutory Durable Power of Attorney may be created using a government form (§752.051).
A government form cannot be used to create a non-durable Power of Attorney.
The statutory form for Illinois is found in §3-3, being known as a Statutory Shortform Power of Attorney for Property.
A Statutory Shortform Power of Attorney for Property. can be used for non-durable or durable purposes.
Pennsylvania and Florida offer no government form to create a Power of Attorney.
Taking into account the explanations of “non-statutory” and "non-durable" above, the term ‘non-statutory non-durable' refers to a Power of Attorney that:-
The term non-statutory non-durable draws upon two concepts only relevant to persons and consequently, it might be said that a non-statutory non-durable Power of Attorney may only be created by a person.
Anyone seeking to understand what a non-statutory non-durable Power of Attorney is should familiarize themselves with the meaning of these terms non-durable, durable, statutory and non-statutory, because an understanding of all of these concepts is necessary to understand the meaning of the term non-statutory non-durable.
There is no government form contained in the legislation of Florida and Pennsylvania.
For this reason, the term ‘non-statutory non-durable’ is something of a nonsense in Florida* and Pennsylvania. Every non-durable Power of Attorney is a ‘non-statutory’ Power of Attorney.
Texas has not passed legislation governing non-durable Powers of Attorney.
The absence of legislation governing non-durable Powers of Attorney and absence of a government form in Texas might be viewed quizzically by the other five (5) of the Six (6) Greater States.
On one view, Texas is the first state to question the need for non-durable Powers of Attorney, perhaps because it is arguable in Texas that a Power of Attorney that terminates upon the principal losing capacity may be cast as a durable Power of Attorney (in particular where a preference and intention that the Power of Attorney operate according to its terms, beyond any point that the principal loses capacity, is expressed in the Power of Attorney, the focus of the test being the principal's intention in this respect, not the terms of the Power of Attorney themselves, so to speak) in which event, there is little need perhaps to recognize non-durable Powers of Attorney, a person in Texas being able to cast a durable Power of Attorney if they wish, for example to take advantage (in Texas) of the third party enforcement regime.
This concept is discussed more under the heading Do We Really Need Durable & Non-Durable Powers of Attorney?
In New York, California and Illinois, a government form is contained in legislation dealing with non-durable and durable Power of Attorney and the government form may be used to create a non-durable or durable Power of Attorney.
The term ‘non-statutory durable' refers to a Power of Attorney that:-
The term non-statutory durable draws upon two concepts only relevant to persons and consequently, it might be said that a non-statutory durable Power of Attorney may only be created by a person.
Anyone seeking to understand what a non-statutory durable Power of Attorney is should familiarize themselves with the meaning of these terms non-durable, durable, statutory and non-statutory, because an understanding of all of these concepts is necessary to understand the meaning of the term non-statutory durable.
In Florida and Pennsylvania the term ‘non-statutory durable’ is something of a nonsense, because in Florida and Pennsylvania there is no government form contained in legislation and so, every durable Power of Attorney is a ‘non-statutory’ Power of Attorney).
In New York, California and Illinois, a government form is contained in legislation dealing with non-durable and durable Power of Attorney and the government form may be used to create a non-durable or durable Power of Attorney.
Use of the government form in New York and California has more significance.
In Illinois, if the principal wants to include any of the ‘statutory’ tasks in a non-statutory durable Power of Attorney they will need to recite them verbatim in their Power of Attorney noting§3-4 provides:-
Explanation of powers granted in the statutory short form power of attorney for property
This Section defines each category of powers listed in the statutory short form power of attorney for property and the effect of granting powers to an agent, and is incorporated by reference into the statutory short form. Incorporation by reference does not require physical attachment of a copy of this Section 3-4 to the statutory short form power of attorney for property. When the title of any of the following categories is retained (not struck out) in a statutory property power form, the effect will be to grant the agent all of the principal's rights, powers and discretions with respect to the types of property and transactions covered by the retained category, subject to any limitations on the granted powers that appear on the face of the form..” §3-4
§751.0021 requires inclusion of certain words:-
An instrument is a durable power of attorney for purposes of this subtitle if the instrument..
(3) contains:
(A) the words:
(i) “This power of attorney is not affected by subsequent disability or incapacity of the principal”; or
(ii) “This power of attorney becomes effective on the disability or incapacity of the principal”; or
(B) words similar to those of Paragraph (A) that clearly indicate that the authority conferred on the agent shall be exercised notwithstanding the principal's subsequent disability or incapacity..
The term ‘statutory non-durable' refers to a Power of Attorney that:-
The term statutory non-durable draws upon two concepts only relevant to persons and consequently, it might be said that a statutory non-durable Power of Attorney may only be created by a person.
Anyone seeking to understand what a statutory non-durable Power of Attorney is should familiarize themselves with the meaning of these terms non-durable, durable, statutory and non-statutory, because an understanding of all of these concepts is necessary to understand the meaning of the term statutory non-durable.
Because Texas has not passed legislation governing non-durable Powers of Attorney, there can be no such thing as a statutory non-durable Power of Attorney in Texas.
In Florida and Pennsylvania the term ‘statutory non-durable’ is a nonsense, because in Florida and Pennsylvania there is no government form contained in legislation and so, every non-durable Power of Attorney is a ‘non-statutory’ Power of Attorney.
Texas has not passed legislation governing non-durable Powers of Attorney.
It follows that there can be no such thing as a statutory non-durable Power of Attorney in Texas.
In New York, California and Illinois, legislation deals with both non-durable and durable Power of Attorney largely if not completely together.
Consistent with this approach, the government form contained in legislation may be used to create either a non-durable or durable Power of Attorney.
The term ‘statutory durable' refers to a Power of Attorney that:-
The term statutory durable draws upon two concepts only relevant to persons and consequently, it might be said that a statutory durable Power of Attorney may only be created by a person.
Anyone seeking to understand what a statutory durable Power of Attorney is should familiarize themselves with the meaning of these terms non-durable, durable, statutory and non-statutory, because an understanding of all of these concepts is necessary to understand the meaning of the term statutory durable.
§4401 contains the government form, known as a UNIFORM STATUTORY FORM POWER OF ATTORNEY and referred to in the legislation as a “statutory form Powers of Attorney under Part 3” (see for example, §4100) which may be durable or non-durable.
In New York and Illinois (similar to California):-
Use of the government form has more significance in New York.
In Florida and Pennsylvania the term ‘statutory durable’ is a nonsense, because in Florida and Pennsylvania there is no government form contained in legislation and so, every durable Power of Attorney is a ‘non-statutory’ Power of Attorney.
§751.0021 requires inclusion of certain words:-
"An instrument is a durable power of attorney for purposes of this subtitle if the instrument..
(3) contains:
(A) the words:
(i) “This power of attorney is not affected by subsequent disability or incapacity of the principal”; or
(ii) “This power of attorney becomes effective on the disability or incapacity of the principal”; or
(B) words similar to those of Paragraph (A) that clearly indicate that the authority conferred on the agent shall be exercised notwithstanding the principal's subsequent disability or incapacity.."
The term ‘commercial’ Power of Attorney refers to a Power of Attorney authorizing the performance of commercial tasks.
This term differentiates Powers of Attorney for ‘commercial’ from certain kinds of Power of Attorney in California, Texas, Illinois and Pennsylvania[3:1] that may be used for non-commercial purposes.
In California and Florida there is potential to create a Power of Attorney for commercial and certain, specific non-commercial purposes which is not possible in the remaining four (4) of the Six (6) Greater States (click here to read more information).
A military Power of Attorney is any Power of Attorney that is executed by a military person and witnessed by a member of a certain class of military personnel in accordance with §1044a.
Pursuant to §1044a, suitable witnesses include:-
In a military Power of Attorney, the signature of a suitable witness, together with the title of that person's office is prima facie evidence that the signature is genuine, that the person holds the designated title, and that the person is authorized to perform a notarial act (§1044a(d)).
A military Power of Attorney is arguably the most powerful type of Power of Attorney in the United States because it is by virtue of §1044b:-
This means that any military Power of Attorney, that is any Power of Attorney notarized in accordance with §1044a (i.e. any Power of Attorney notarized by a suitable witness) does not need to comply with mandatory requirements imposed under state law regarding font size, witnessing, inclusion of mandatory notices and similar.
Florida, Texas and Pennsylvania make express reference to military Powers of Attorney in their legislation dealing with Powers of Attorney.
In Florida §709.2106 provides:
“A military power of attorney is valid if it is executed in accordance with §1044b, as amended. A deployment-contingent power of attorney may be signed in advance, is effective upon the deployment of the principal, and shall be afforded full force and effect by the courts of this state.”
Both Pennsylvania and Texas affirm the validity of military Powers of Attorney in their legislation: §5611(2);§751.0023
The use of military Powers of Attorney raises interesting questions, as illustrated in the Case Study - Military Powers of Attorney Raise Interesting Questions.
The term “non-military” is used to refer to any Power of Attorney that is not a military Power of Attorney.
In practical terms, a non-military Power of Attorney is any Power of Attorney not witnessed by a military person.
The term ‘legislative’ Power of Attorney is used in this Wiki to refer to a Power of Attorney that is in contemplated in legislation.
Legislation at state and federal level refers to use of Powers of Attorney by commercial entities.
For example:-
State legislation also recognizes the use of Powers of Attorney in other contexts.
In Texas, for example:-
Under the US Code, Powers of Attorney can be created, for example:-
The term “non-legislative” is used to refer to any Power of Attorney that is not created in the context of a statute of the kind explained above with respect to legislative Powers of Attorney.
A ‘contractual Powers of Attorney’ forms part of a contract with a wider purpose.
Typically, contractual Powers of Attorney are often found in legal instruments for commercial purposes, where one party seeks the ability to do something on behalf of the other party in the event of default.
In Grimes v. Enterprise Leasing Co. of Philadelphia, LLC, 629 Pa. 457, 105 A.3d 1188 (2014) the Court considered a contract that:
"..set forth formulas for calculating the loss-of-use and diminishment-in-value fees. It also contained a power-of-attorney clause allowing Enterprise to request payment for any unpaid “claims, damages, liabilities, or rental charges” directly from Appellee’s insurance carrier or credit card company.."
Powers of Attorney included in contracts are invariably related to the subject matter of the contract.
For example, within a loan contract that includes basic terms of the loan such as the loan sum, interest rate and similar and yet, also includes a clause that grants a Power of Attorney by one party to another, authorizing the lender to perform certain tasks as agent on behalf of the borrower in the event of default in repaying the loan)
Any clause creating a contractual Power of Attorney may or may not be enforceable, having regard to the need to comply with requirements applicable to a Power of Attorney.
For example, a contractual Power of Attorney might not be effective in Florida unless the Power of Attorney complied with requirements for any Power of Attorney created by a person must be signed by the principal and two witnesses and acknowledged before a notably public (§709.2105(2)), unless it is for an excluded purpose.
A party considering the inclusion of a Power of Attorney in a sensitive commercial contract may want to consider the implications of the contents of the contract becoming known to the public.
If the Power of Attorney, is to be relied upon to perform certain real property transactions it must be recorded (i.e. filed) before it may be relied upon for this purpose (see for example: §4128 in California; §751.151 & §12.016 in Texas; §709.2106 in Florida; and §5602(c) in Pennsylvania, noting many other kinds of Powers of Attorney may need to be lodged with government agencies, such as Powers of Attorney relating to execution of bail bonds in Texas (§1704.211) etc.).
The term “non-contractual” is used to refer to any Power of Attorney that is not a contractual Power of Attorney.
In practical terms, a non-contractual Power of Attorney is any Power of Attorney not found in a contract being a contract that is substantially for other purposes.
The term “oral” refers to a Power of Attorney created via oral communication only, without the making of a physical record.
The use of orally created Powers of Attorney is neither common or usual.
The use of orally created Powers of Attorney creates problems in terms of readily establishing the terms of the Power of Attorney and similar.
It is generally preferable to record any Power of Attorney in writing so as to ensure that an agent has a physical copy, capable of being presented to a third party.
Some kinds of Powers of Attorney cannot be created using oral communication, for example because:-
Interestingly, a military Power of Attorney may be excepted from any requirement to be in writing and so for example, a durable, military Power of Attorney might be capable of being created orally.
An irrevocable Power of Attorney is a Power of Attorney that cannot be revoked by the principal.
An irrevocable Power of Attorney acquires its irrevocable quality by virtue of the inclusion of provision in the Power of Attorney to the effect that the Power of Attorney cannot be revoked by the principal.
An irrevocable Power of Attorney may be expressed to be irrevocable in a qualified sense.
For example, a Power of Attorney might provide that it is irrevocable, unless a particular party consent to its revocation.
Under most Powers of Attorney the agent is expected to act in the principal's best interests.
This is not the case with an irrevocable Power of Attorney.
An irrevocable Powers of Attorney may or may not be exclusive to the agent.
That is, the entitle of the principal to perform the delegated task(s) for themselves is typically assumed in a Power of Attorney, however sometimes an irrevocable Powers of Attorney may be given with intention the principal be excluded from performing the delegated task(s) for themselves.
Obligations going to these issues may for example, be dealt with in a separate agreement, governing the terms for use of the Power of Attorney, or in the Power of Attorney itself.
For example, power to execute a transfer secured property might be given to a security holder (such as a mortgagee) which is only effective if a loan is not repaid on time, being a power the borrower agrees not to exercise in any event without the consent of the lender, so that the lender is confident the property will remain in the possession of the borrower and the lender if unpaid, can effect the transfer of the property to themselves or someone else, if the loan is unpaid.
An irrevocable Power of Attorney might be used for example, where monies are lent and the lender wishes to acquire the authority to perform certain transactions on behalf of the borrower, if the loan is not repaid.
A bank financing the purchase of a property might require the borrower to execute an irrevocable Power of Attorney permitting the bank to execute on behalf of the borrower, all documents necessary to effect a transfer of the property from the borrower to the bank, if the loan is not repaid.
Arrangements involving an irrevocable Power of Attorney are often sophisticated and require considerably more terms to be entered between the parties, that is written terms other than those recording the irrevocable Power of Attorney) to deal with associated issues, being issues about which a lawyer would typically advise with the benefit of specific information regarding the contemplated transaction.
This is particularly the case where the irrevocable Power of Attorney forms part of a contract, so as to be a contractual, irrevocable Power of Attorney.
In Illinois, irrevocable Powers of Attorney are excluded from the ambit of the legislation.[12]
Legislation in Texas governing durable Powers of Attorney is silent on the issue.
Irrevocable Powers of Attorney may also be excluded from the ambit of the legislation in other states.
There is nothing that prevents a limited liability corporation (LLC) or partnership (LLP) from creating an irrevocable Power of Attorney.
In Texas for example, §101.055 in Texas recognizes irrevocable Powers of Attorney for LLC's.
INSERT RE ANYTHING AUTH TO DO IN WRITING - AS A MODIFIED VERSION FOR NON-STAT POA
In most states, a Power of Attorney may be created for specific purposes or for general purposes.
‘General’ refers to a grant of authority by a person that enables another person or legal entity to manage the entirety of their commercial affairs
The term ‘general Power of Attorney’ is effectively redundant in Florida, because the creation of a general Power of Attorney is prohibited (see §2201(1)).
In California for example, §4261 provides:-
"..If a Power of Attorney grants general authority to an attorney-in-fact and is not limited to one or more express actions, subjects, or purposes for which general authority is conferred, the attorney-in-fact has all the authority to act that a person having the capacity to contract may carry out through an attorney-in-fact specifically authorized to take the action.."
Useful Extracts from the California Law Revision Commission Report
The 1994 California Law Revision Commission Report which led to enactment of Division 4.5 of the Probate Code stated in respect of §4261:
"..Section 4261 is new and provides for the broadest possible authority in a general power of attorney. For specific limitations applicable to this section, see Sections 4264 (authority that must be specifically authorized), 4265 (actions that may not be taken by an attorney-in-fact).."
In respect of use of the government form the 1994 California Law Revision Commission Report stated:
"If it is desired to give the agent the broadest possible powers, language similar to the following can be added under the “Special Instructions” portion of the form:
In addition to all of the powers listed in lines (A) to (M) above, I grant to my agent full power and authority to act for me, in any way which I myself could act if I were personally present and able to act, with respect to all other matters and affairs not listed in lines (A) to (M) above, but this authority does not include authority to make health care decisions.""
There is potential for debate in each of the Six (6) Greater States as to whether expansive language used in conjunction with various ‘statutory’ tasks operates to create a general Power of Attorney.
If all ‘statutory’ tasks are included in a Power of Attorney does this create a general Power of Attorney?
As illustrated above, in New York and Illinois a ‘catch-all’ class of ‘statutory’ tasks if included with all other 'statutory’ tasks seeming somewhat akin to a general Power of Attorney.
Less so it seems in California, Texas and Pennsylvania, where the absence of a ‘catch-all’ class seems to leave some scope that some commercial tasks may be omitted because where all 'statutory’ tasks are authorized to be performed, there may be scope for tasks that fall outside the 'statutory’ tasks. For example, where in the ‘statutory’ tasks do we find reference to cryptocurrency?
Whether a commercial entity can grant a general Power of Attorney is a question suitable for answer by a lawyer with expertise in the area of governance of commercial entities.
In favour of the ability to make such grants would be the ordinary principles in favour of freedom of persons and commercial entities constructing their commercial affairs however they see fit.
Against the making of such grants may be public interest, in avoiding the comprehensive delegation of all authority by a commercial entity to another legal entity, which may be reflected in legislation.
§4123 states:
(a) In a power of attorney under this division, a principal may grant authority to an attorney-in-fact to act on the principal's behalf with respect to all lawful subjects and purposes or with respect to one or more express subjects or purposes.
§4261 states:
If a power of attorney grants general authority to an attorney-in-fact and is not limited to one or more express actions, subjects, or purposes for which general authority is conferred, the attorney-in-fact has all the authority to act that a person having the capacity to contract may carry out through an attorney-in-fact specifically authorized to take the action.
In respect of a durable Power of Attorney, §751.031 states:
(a) Subject to Subsections (b), (c), and (d) and Section §751.032, if a durable power of attorney grants to an agent the authority to perform all acts that the principal could perform, the agent has the general authority conferred by Subchapter C, Chapter 752.
Legislative provision of the kind seen in California for example that specifically recognizes the right to create a general Power of Attorney is not included in the legislation of New York.
That said, there are references in the legislation to general grants, for example in §5-1514.
In Florida, general Powers of Attorney are prohibited: §2201(1)
In Illinois, no specific reference is made in legislation to general grants, however §2-1 says:-
the principal may specify in the agency the event or time when the agency will begin and terminate, the mode of revocation or amendment and the rights, powers, duties, limitations, immunities and other terms applicable to the agent and to all persons dealing with the agent, and the provisions of the agency will control notwithstanding this Act..
§5601.4 states:-
(c) Scope of authority. Subject to subsections (a), (b), (d), (d.1) and (e), if a Power of Attorney grants to an agent authority to do all acts that a principal is authorized to perform, the agent has all of the powers which may be incorporated by reference pursuant to section §5602(a).
Terms like limited, special or specific might be used to refer to a Power of Attorney that:-
There are no universally recognized meanings for the terms limited, special and specific, although for example, it might be said that the terms 'special' and 'specific' both seem to relate well to the last of the examples above.
In California for example, §4262 provides:-
"..if a Power of Attorney grants limited authority to an attorney-in-fact, the attorney-in-fact has the following authority:
(a) The authority granted in the Power of Attorney, as limited with respect to permissible actions, subjects, or purposes.
(b) The authority incidental, necessary, or proper to carry out the granted authority.."
§4123 states:
(a) In a power of attorney under this division, a principal may grant authority to an attorney-in-fact to act on the principal's behalf with respect to all lawful subjects and purposes or with respect to one or more express subjects or purposes.
In Texas, New York, Florida, Illinois & Pennsylvania no specific reference is made in legislation to limited, special or specific grants of authority, however in Illinois §2-1 says:-
“the principal may specify in the agency the event or time when the agency will begin and terminate, the mode of revocation or amendment and the rights, powers, duties, limitations, immunities and other terms applicable to the agent and to all persons dealing with the agent, and the provisions of the agency will control notwithstanding this Act..”
Explain about these
Power of Attorney
In California, the definition of the term springing Power of Attorney makes it easier to discuss.
§4030 in California provides:
“Springing power of attorney” means a power of attorney that by its terms becomes effective at a specified future time or on the occurrence of a specified future event or contingency, including, but not limited to, the subsequent incapacity of the principal. A springing power of attorney may be a durable power of attorney or a nondurable power of attorney.(§4030)
California is the only one of the Six (6) Greater States state to define a springing Power of Attorney in its legislation.
Subject perhaps to a tacit understanding that the words “becomes effective” in §4030 be read to mean “becomes binding upon the principal”, the definition of the term “springing” in §4030 in California, is strong start to defining a springing Power of Attorney.
A Useful Extract from the California Law Revision Commission Report
The 1994 California Law Revision Commission Report which led to enactment of Division 4.5 of the Probate Code stated in respect of §4129:
"..Section 4129 continues former Civil Code Section 2514(b)-(e) without substantive change. This section is intended to make springing powers of attorney more effective by providing a mechanism for conclusively determining that the triggering event or contingency has occurred. See Section 4030 (“springing power of attorney” defined). Subdivision (a) makes clear that the principal may give the agent (or one or more other persons) the power to determine by written declaration under penalty of perjury that the event or contingency specified in the springing power of attorney has occurred so that the power of attorney is effective. This section does not apply to or affect springing powers of attorney containing different procedures for determining whether the triggering event or contingency has occurred. This section applies only where the terms of subdivision (a) are satisfied.
Subdivision (b) makes clear that the written declaration of the persons designated in the power of attorney is conclusive, even though it may turn out that the event or contingency did not occur, or that circumstances have returned to normal. The purpose of the conclusive written declaration is to permit other persons to act in reliance on the written declaration without liability.
A springing power of attorney may or may not be a durable power of attorney. A springing power that takes effect on the occurrence of a contingency other than the incapacity of the principal (such as, for example, the principal’s failure to return from a vacation or business trip by a certain date) need not be a durable power of attorney. However, a springing power of attorney that takes effect upon the incapacity of the principal is necessarily a durable power of attorney, and the other rules concerning durable powers of attorney are applicable."
This is discussed further under the heading Verifying Certificates & Affidavits.
The 1994 California Law Revision Commission Report also provides in respect of §4405 relating to the government form:
Section 4405 continues former Civil Code Section 2479 without substantive change. Section 4405 is not found in the Uniform Statutory Form Power of Attorney Act (1988). This section is drawn from Section 5-1602 of the New York General Obligations Law. A provision described in subdivision (a) protects a third person who relies on the declaration under penalty of perjury of the person or persons designated in the Power of Attorney that the specified event or contingency has occurred. The principal may designate the agent or another person, or several persons, to make this declaration.
Subdivision (d) makes clear that subdivisions (a) and (b) are not the exclusive method for creating a “springing power” (a Power of Attorney that goes into effect upon the occurrence of a specified event or contingency). The principal is free to set forth in a Power of Attorney under this part any provision the principal desires to provide for the method of determining whether the specified event or contingency has occurred. For example, the principal may provide that his or her “incapacity” be determined by a court under Part 5 (commencing with Section 4900). See Section 4941(a). If the Power of Attorney provides only that it shall become effective “upon the incapacity of the principal,” the determination whether the Power of Attorney is in effect also may be made under Part 5 (commencing with Section 4900)."
The approach suggested above is only more appealing given that Florida is the only other one of the Six (6) Greater States that speaks in legislation of Powers of Attorney "becoming effective” and this approach is consistent with a similar approach in Florida.
§709.2108(3) states:-
"..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”.
There are potentially stable reasons to accept the approach in Florida is tenable.
There may be justification for preferring to deny a principal the ability to construct a Power of Attorney in terms that mean it only becomes binding upon the principal, in the future.
It might be borne in mind that in practical terms, there is nothing to prevent a principal specifying in a Power of Attorney that tasks may only be performed by agents after a certain point in time in the future and yet, ensuring it is made clear that the Power of Attorney is to become binding upon the principal, immediately (i.e. upon being properly executed by the principal).
What is at stake is a Power of Attorney that is intended to have no legal effect whatsoever, despite potentially being properly executed by the principal.
The status of a document that is said to have no legal effect until some future point in time presents difficult issues. For example:-
There is no need to explore the minutiae in respect of arguments against permitting the use of springing Powers of Attorney.
It is sufficient to merely acknowledge there are at least reasons the approach in Florida is preferred in Florida.
Of course, there are other reasons the approach in California might preferred, not the least of which is the fact that at least in principle, it seems feasible to deal with issues of this kind in a Power of Attorney.
If all pertinent issues can be dealt with in a Power of Attorney, the public interest in ensuring that persons are free to structure their Power of Attorney affairs however they see fit would be good reason to prefer the California approach.
It is at least questionable whether these issues can be dealt with in the terms of a Power of Attorney. The issues are not straightforward.
Taking into account that in practical terms, there is nothing to prevent a principal specifying in a Power of Attorney that tasks may only be performed by agents after a certain point in time in the future and otherwise define how their Power of Attorney affairs are to work, there are good reasons to debate the advantages of any approach that involves uncertainties of the kind referred to under the heading Merits of Prohibition in Florida.
For anyone concerned that the meaning of the term “become effective” is a reference to a point in time when agents are first authorized to perform any task, there may be a simple solution.
It is arguably impossible to reject the notion that a principal, may be authorized to perform tasks that are ‘staggered over time' so to speak, that is to say “may perform task A forthwith, task B from the date one year from today and task C from the date five years from today…”
In the present context, what is important about this example is that at least one task (task A) is authorized to be performed as soon as the agent has accepted appointment under the Power of Attorney , meaning there can be no suggestive this Power of Attorney falls afoul of such a rule.
A cautious principal who wants to ensure argument about the meaning of “become effective” refers to a point in time when agents are first authorized to perform any task, may avoid the issue completely simply by ensuring that agents are authorized to perform at least one task, perhaps an innocuous task, or a significant task subject to extensive limitations which would make it very difficult to suggest that the Power of Attorney falls afoul of such a rule.
The Case Study - Springing Powers of Attorney may be of assistance when considering the meaning of the term springing Powers of Attorney.
The notion of a “springing” Power of Attorney is one of the more volatile terms, in terms of attracting various accounts of its meaning.
The absence of accepted definition across all of the Six (6) Greater States, making it harder to form a view as to what it truly means, in a ‘global’ sense.
As it stands, amongst the Six (6) Greater States:-
As to where everything falls across the Six (6) Greater States, it can only be said that:-
In some of the Six (6) Greater States, an agent under a Power of Attorney for a person may certify that a contingency has occurred, where for example a Power of Attorney is said to “become effective" at some time after it is properly executed by the principal (outside Florida, where this design is prohibited §709.2108(3)).
In California §4129 states:-
", a principal may designate a person who by written declaration under penalty of perjury has the power to conclusively determine if a contingency has occurred, being someone expressly said to be either an agent or any other person, including jointly or otherwise if the principal prefers (§4129)
In Texas §751.203 permits an agent to certify:-
“4. If under its terms the power of attorney becomes effective on the disability or incapacity of the principal or at a future time or on the occurrence of a contingency, the principal now has a disability or is incapacitated or the specified future time or contingency has occurred.”
In New York 5-1501B provides:-
"If the power of attorney states that it takes effect upon the occurrence of a date or a contingency specified in the document, then the power of attorney takes effect only when the date or contingency identified in the document has occurred, and the signature of the agent acting on behalf of the principal has been acknowledged. If the document requires that a person or persons named or otherwise identified therein declare, in writing, that the identified contingency has occurred, such a declaration satisfies the requirement of this paragraph without regard to whether the specified contingency has occurred.."
In Pennsylvania §5604 provides:
"..A principal may provide in the power of attorney that the power shall become effective at a specified future time or upon the occurrence of a specified contingency, including the disability or incapacity of the principal.."
Anyone in Florida wanting to design a Power of Attorney under which agents may only perform tasks specified in Power of Attorney after a certain date or if certain events occur, which is prohibited in Florida (see §709.2108(3)):-
care might be taken in the language used in the Power of Attorney to recognise that the Power of Attorney is nonetheless, intended to be effective upon being signed by the principal
when viewing the policy behind §709.2108(3) it may be helpful to consider that:-
The right to create a springing Power of Attorney is codified in §4030 being said to be “a power of attorney that by its terms becomes effective at a specified future time or on the occurrence of a specified future event or contingency, including, but not limited to, the subsequent incapacity of the principal”.
§4129 states:
"(a) In a springing power of attorney, the principal may designate one or more persons who, by a written declaration under penalty of perjury, have the power to determine conclusively that the specified event or contingency has occurred. The principal may designate the attorney-in-fact or another person to perform this function, either alone or jointly with other persons.
(b) A springing power of attorney containing the designation described in subdivision (a) becomes effective when the person or persons designated in the power of attorney execute a written declaration under penalty of perjury that the specified event or contingency has occurred, and any person may act in reliance on the written declaration without liability to the principal or to any other person, regardless of whether the specified event or contingency has actually occurred.
(c) This section applies to a power of attorney whether executed before, on, or after January 1, 1991, if the power of attorney contains the designation described in subdivision (a).
(d) This section does not provide the exclusive method by which a power of attorney may be limited to take effect on the occurrence of a specified event or contingency."
Texas has no legislation governing non-durable Powers of Attorney.
Texas expressly recognizes the right to create a durable Power of Attorney that is springing (§751.203) albeit only in the context of the terms of certain certifications, without defining the term “springing Power of Attorney” or addressing the concept in direct terms in legislation.
§751.203 permits an agent to certify:-
“4. If under its terms the power of attorney becomes effective on the disability or incapacity of the principal or at a future time or on the occurrence of a contingency, the principal now has a disability or is incapacitated or the specified future time or contingency has occurred.”
§5-1501B provides:-
"If the power of attorney states that it takes effect upon the occurrence of a date or a contingency specified in the document, then the power of attorney takes effect only when the date or contingency identified in the document has occurred, and the signature of the agent acting on behalf of the principal has been acknowledged. If the document requires that a person or persons named or otherwise identified therein declare, in writing, that the identified contingency has occurred, such a declaration satisfies the requirement of this paragraph without regard to whether the specified contingency has occurred.."
In Florida, it is not possible to create certain kinds of Power of Attorney that might include either or both of the designs referred to above: §709.2108(3) which states:-
"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”.
The entitlement of a person to create a springing Power of Attorney is preserved in Illinois by §2-3 which provides “the principal may specify in the agency the event or time when the agency will begin or terminate”.
§5606 provides:
As to acts undertaken in good faith reliance thereon, an affidavit executed by the agent under a power of attorney stating that he did not have at the time of exercise of the power actual knowledge of the termination of the power by revocation, death or, if applicable, disability or incapacity or the filing of an action in divorce and that, if applicable, the specified future time or contingency has occurred, is conclusive proof of the nonrevocation or nontermination of the power at that time and conclusive proof that the specified time or contingency has occurred.
The term “non-springing” is used to refer to any Power of Attorney that is not a springing Power of Attorney.
In practical terms, a non-springing Power of Attorney is a Power of Attorney that commences operation upon execution by the principal and arguably, provides for any agent to commence to exercise authority from that point in time.
The term temporary Power of Attorney might be used to describe a Power of Attorney under which:-
For example, despite their titles: (a) a Power of Attorney titled “Durable Power of Attorney” and containing a direction reading “this Power of Attorney terminates upon my loss of capacity” would not be a durable Power of Attorney; and (b) a Power of Attorney titled “General Power of Attorney” and contained clear provision to the effect that the agent is only authorized to perform three (3) specific tasks would not be a general Power of Attorney. ↩︎
See Power of Attorney for Health Care (CA), Medical Power of Attorney (TX), Statutory Short Form Power of Attorney for Health Care (IL) and Health Care Power of Attorney (PA) ↩︎ ↩︎
Being Powers of Attorney not excluded from the ambit of the legislation - click here to read more. ↩︎ ↩︎
For example in Texas, the use of Powers of Attorney in business transactions was approved in Texas Bankers Association v Association of Community Organizations for Reform Now (ACORN) (App 3 Dist. 2010) 303 S.W.3d 404 where the Court said "..the use of powers of attorney to designate an attorney-in-fact to act on the designor's behalf is a recognized principle of Texas law" and "[there is an] existing principle of Texas Law that allows the use of a properly executed Power of Attorney in business transactions". We might look at the many cases in Texas involving Powers of Attorney created by a principal who is a commercial entity, or involving a commercial entity appointed as an agent, as good evidence that commercial entities may be officeholders under a Power of Attorney. ↩︎
Putting the distinction between non-durable and durable a new light (see NY §5-1501A; IL §2-5; PA §5601) accepting that for example, in New York, Illinois and Pennsylvania, a Power of Attorney is durable unless stated otherwise and conversely in other states. ↩︎
Moreover, use of term non-durable in association with a Power of Attorney for a commercial entity is actually confusing, by tending to infer that the principal is a person, there being no reason to identify a Power of Attorney for a commercial entity as non-durable, being non-durable by definition. ↩︎
As discussed above under the heading Definition of "Non-Durable" In California ↩︎
Ibid. ↩︎
See the discussion at page 893 of The Rationale of Agency by Warren Seavey (1920) ↩︎
See The Durable Power of Attorney's Place In The Family of Fiduciary Relationships by Karen E Boxx (2001) at page 6. ↩︎
See the definition of “agency” in §2-3 which excludes agencies “for the benefit of the agent”. ↩︎