August 2001
New Law: Protection When You are Incapacitated

Amendments to our Power of Attorney statute were passed by the 2001 Legislature and signed by the Governor. These amendments were further amended during the June Special Session. Although the Governor had not yet signed the amended version at the time this column was written, it is expected to be signed and become law upon his signature. Both the House and the Senate passed the amendment without any “nay” votes.

This month’s column will detail this new law and explain the benefits to seniors and incapacitated individuals.

First, I will provide some background for these amendments. From time to time, many individuals grant power and authority to another individual to perform either specific tasks or grant general power and authority to make decisions and conduct transactions for them. This grant of power and authority is commonly and legally called a Power of Attorney.

The basic purpose underlying a Power of Attorney is to allow another person, the agent, to stand in your, the principal, place in signing documents and conducting various transactions. It is understood that the principal who grants a Power of Attorney may revoke or amend that power at any time. That is, the principal may withdraw the power granted to the principal’s agent at the sole discretion of the principal.

In order for the principal to revoke or amend a Power of Attorney, the principal must possess the mental capacity to do so. The principal should also be of sufficient mental capacity to know whether the agent has abused his or her power and authority granted by the Power of Attorney.

But what if the principal becomes incapacitated to the extent that such oversight of the principal’s agent is no longer possible? Who can then determine whether the agent is abusing the authority granted by the Power of Attorney? Essentially, there is no one to monitor the conduct of the agent when the principal becomes incapacitated.

Prior to the Power of Attorney amendments, an interested person of the principal (often a child) could not obtain any information about the principal’s estate, unless the agent was willing to voluntarily share such information. Far too often, the agent was unwilling to share any information, and litigation became the only recourse.

That should change with the two amendments passed this year. The first amendment prohibits a court from denying the appointment of a conservator solely on the basis that the principal has a Power of Attorney. This happened in a case of mine that went to trial in Davis County. The new statute should prevent this from happening in the future.

The second amendment is more extensive and imposes a duty on the agent to provide information to any “interested person.” This duty, however, only arises when the principal becomes incapacitated.

Under this amendment, the agent holding the Power of Attorney of an incapacitated person must:

(1) notify all interested persons of his or her status as agent within 30 days;

(2) provide to any interested person upon written request a copy of the Power of Attorney and a statement of the assets to which the Power of Attorney applies;

(3) provide an annual accounting of the assets; and

(4) notify all interested persons upon the death of the principal.

These new provisions should give seniors and others who grant a Power of Attorney great comfort that their agent will be held accountable for his or her actions. While a Power of Attorney can be a valuable way to make sure your affairs can be managed when you can no longer manage them, there was no mechanism to monitor your agent. Now, each of your children or other interested person can demand a full accounting of your child or other person to whom you granted agent status by way of a Power of Attorney.

When preparing a Power of Attorney or other estate documents , you should contact an Elder Law Attorney. To locate an Elder Law Attorney, check with the National Academy of Elder Law Attorneys at (520) 881-4005, or your local Yellow Pages.

YOUR QUESTIONS: Do you have a particular question that you would like answered? To better serve the readers of the Utah Spirit, please direct your questions in writing to Michael A. Jensen, Elder Law Attorney, PO Box 571708, Salt Lake City, Utah 84157-1708, or by e-mail at: mike-spirit@utahattorney.com. From time to time, I will attempt to answer some of those questions.