Question:

This question is about an issue that seems to be rarely discussed. In my state, one of the standard powers of an agent under a durable power of attorney is to “resign any fiduciary position” held by the principal. I have a trust of which I’m the grantor and trustee. My POA agent is a trustworthy relative who also serves as one of my successor trustees. As I get older, I will have more confidence in my agent’s judgement about my capacity than in my own judgement. If my agent believes I’ve become incapacitated, I will accept his decision even if I disagree with it. If unable to do it myself, I want him to resign on my behalf as trustee. This will avoid needing to obtain physician certification of incapacity. But I’m unsure how the resignation document should be prepared. I’ve searched online but can’t find any examples showing agent resigning on behalf of fiduciary.

QUESTIONS:

(1) Would the following be a suitable resignation document?

Notice of Trustee Resignation by and through Power of Attorney

John Doe hereby resigns as Trustee of the ABC Trust effective when a Successor Trustee named under the Trust accepts the office of Trustee. On behalf of the Trustee named above, this resignation is executed by James Smith as agent under the Trustee’s power of attorney dated ________ which, under section 5.8, grants the agent power to “resign any fiduciary position I hold.”

(2) When visiting the notary, should agent also take copies of the trust and durable power of attorney documents?

(3) Would it be advisable to have the document witnessed even though not required by law?

Response:

You’re right, that is an issue that is not normally discussed, but you’re right to defer to your agent the decision as to when to resign from trustee and other fiduciary roles. One of my colleagues calls this a Odysseus clause, analogizing it to when he was lashed to the mast in order to hear the Sirens’ songs without hurling himself into the ocean to drown. Similarly, you may not believe yourself incapable of handling your financial or legal matters and may be vulnerable to the new Sirens of financial exploitation, but your agent can act to protect you.

To answer your questions:

(1) Your form is fine.

(2) Your agent does not need to bring the trust or durable power of attorney documents to the notary since the notary is only certifying as to your agent’s identity.

(3) I don’t see any need for witnesses as long as the form is notarized. Depending on your state law, neither a notary or witnesses may be technically necessary, but both can add weight to it and make it more likely to be accepted by third parties.