Utah just adopted the Uniform Power of Attorney Act which went into effect May 10, 2016. There are some provisions in the new law that you should know about.
A Durable Power of Attorney allows the principal to authorize another person (your agent) to make financial decisions the principal specifies in the document. It is important to name an agent or agents you can trust to act in your best interest because of the significant authority typically granted in a power of attorney.
The statutory power of attorney is automatically durable which means it becomes effective at signing and remains effective at your incapacity. You can elect to make the statutory power of attorney so it is only effective on your incapacity, but you must draft the provision into the statutory form.
The authority that can be granted in the statutory power of attorney can be very broad depending upon the principal’s selections in the document. Generally, your agent can make all decisions related to real property, personal and tangible property, stocks or bonds, commodities and options, banks and financial institutions, insurance and annuities, retirement plans, claims and litigation, and estates and trusts or other beneficial interests. Your agent has the authority to buy, sell, invest, and enter into or terminate contracts. Again, this authority becomes effective immediately even if you are able to make decisions for yourself unless you state otherwise in the Special Instructions.
There is a section in the new statutory power of attorney that presents a pitfall for the unsuspecting principal. The authority that can be granted in this section includes the authority for the agent to amend trusts, change beneficiary designations, create joint tenancies and make gifts, among other “superpowers”. In the course of our work we find that less than 3% of our clients want or need to grant one of the “superpowers”. You must be careful to only select powers you wish to grant and be very careful when it comes to the “superpowers” because they likely grant more authority than you intend.
Typically, a person signing a new power of attorney will want to revoke prior financial powers of attorney. The new statutory power of attorney does not automatically revoke prior powers of attorney so you must draft language in the document if you wish to terminate the authority of agents in prior powers of attorney.
JensenBayles, LLP provides a broad spectrum of legal services. Thomas J. Bayles has been actively providing advice in the areas of trusts, wills, probate and tax planning in the St. George market for over 15 years. Please visit our web site www.jensenbayles.com or call 435-674-9718 and ask for Thomas J. Bayles or Phillip G. Gubler. The information in this article is for educational purposes only and is not intended to be construed as legal advice. Please contact an attorney for legal advice specific to your situation.
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