Michigan is another state that has not yet enacted the UPOAA.
“Brokerage firms like Schwab and Fidelity have historically given us a hard time about powers of attorney, so your best bet is to update the client’s current powers of attorney to reflect the UPOAA template whether you reside in a state that has adopted it or not,” says Leon LaBrecque, a financial advisor and attorney in Troy, Mich.
The UPOAA sets minimum standards and identifies best practices for agents under powers of attorney. For example, an attorney-in-fact is called an “agent.”
“The Uniform Act requires the person appointed power of attorney to keep records and to provide an accounting upon request of those records to other family members who are involved with the elderly parent,” LaBrecque says. “The whole function of the Uniform Power of Attorney Act is to make sure the agent is accounting to the heirs.”
If the agent does not comply, family members and interested parties can petition their local court to secure copies of the senior’s accounting.
“If a financial advisor’s client has been named a power of attorney or plans to name a power of attorney, it would behoove the advisor to look at the authorities granted under the Uniform Act even if they live in a state that has not yet adopted it,” said the California-based Hackard, who advises financial planners.
In California, failing to maintain records is presumed to be a breach of trust and the burden is on the agent or attorney-in-fact to rebut that presumption.
“It can create real problems, even though California has not yet adopted the Uniform Act,” Hackard says.
States that have adoped the UPOAA have varying requirements but overall the model legislation sets important limits to the powers that an agent is granted.
For example, authorities that are not granted include the power to revoke or terminate an inter vivos trust and the power to change rights of survivorship.