What Language in a Durable Power of Attorney Permits an Agent to Make Gifts to Himself?
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Question:
My durable power of attorney has the phrase: “it shall not be deemed to be self-dealing on the part of my attorney-in-fact herein to make gifts, transfers or dispositions to or for himself or his children, because they are the objects of my bounty in harmony with my estate plans.” This seems to have been based on your ElderLaw Forms Manual, p. 8-28. I read it as giving me the authority to make gifts to myself. However, I am curious as to the way it was phrased. Wouldn’t it have been more straightforward to say “My attorney-in-fact may make gifts, transfers or dispositions to or for himself…. which shall not be deemed to be self-dealing.” Is there a court case or some legal authority which led you to the wording that was used? I am concerned that the wording could be attacked as not clearly providing the gifting authority.
Response:
An agent appointed under a durable power of attorney has a fiduciary duty to act in the best interest of the grantor of that power. However, such an agent is also something of an alter ego for the grantor of the power, stepping into her shoes and able to do anything she may do, including making gifts. The recipient may be the natural recipient of gifts from the grantor, but making gifts to oneself could well appear to be a conflict of interest and violation of the agent’s fiduciary duty. Clauses such as those discussed above are often included in durable powers of attorney to avoid any claim that the agent cannot make gifts to himself. Even with such a clause in the document, the agent is still bound by his fiduciary duty. He should only make gifts to anyone, himself included, that either are consistent with gifts the grantor had made in the past or are part of an estate or long-term care planning the agent has every reason to believe the grantor would support.
All of that said, I don’t see the alternative forms of wording this provision as being so different. They both permit the attorney-in-fact to make gifts to himself on behalf of the principal despite the fact that without this provision, doing so would seem to violate his fiduciary duty to the person granting the durable power of attorney. The language in the ElderLaw Forms Manual simply explains why the attorney-in-fact is given this power, which I think is useful, but not necessary.
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If I think a grandchild of my mother , who is my nephew is Durable POA for her, may be unfit to handle this what can I do ( as her oldest son ) to get an accounting? Or proof of bills paid, gifts to all, investments and so on? What about the nephews mother and siblings influence to leave me in the dark about this even when I asked after my father died and my mother made my younger brother DPOA then if he passed, his son?
Gary,
While it’s certainly best practice for an agent under a durable power of attorney to be transparent about his actions, family members have no rights under the document. If you think the agent is not carrying out his job adequately, you have two legal options. The first is to seek the appointment of someone else as conservator. Unfortunately, if this is contested it can become time-consuming and expensive. The second approach would be to report the situation to your local elder protective service agency, which can investigate and take appropriate protective action. However, before pursuing either option, you may be better off simply discussing the situation with the nephew or have your attorney approach him. If the matter can be resolved by agreement rather than resort to the courts, everyone will be better off.