The financial durable power of attorney, also known as a durable power of attorney for property management, is a creature of fairly recent origin. The estate planning bar created it to provide an effective alternative to guardianship or conservatorship proceedings when people become incompetent or incapacitated. Additionally, there was a sentiment that the wealthy had an effective way of dealing with potential disability by creating a funded inter vivos trust, and that such a device was not available to most individuals because of the prohibitive cost. Since its creation, the financial durable power of attorney has become an extremely popular planning device.
Recently, however, concerns have been voiced that perhaps we have created an instrument of abuse rather than a useful tool. Sometimes the problems are as clear as wrongful misappropriation of the principal's property by the agent. Often, however, problems arise because the standards governing the behavior of agents under durable powers of attorney have never been clearly defined. In many instances, those standards have not even been considered. Legislatures, courts, and commentators have often simply assumed the application of various bodies of law without careful reflection. In light of the popularity of the financial durable power of attorney, it is surprising that there has been no in-depth consideration of the parameters of the agent's duty. There has been only the occasional sentence written, often merely noting the application of general fiduciary principles.
This Article examines the history and uses of the financial durable power of attorney and compares it to the alternative property management approaches of guardianship and trust creation. It then discusses the general lack of definition of the role of the agent under the financial durable power of attorney and problems that this lack of definition has begun to cause. Finally, it proposes a role for agents that comports with the purposes underlying the creation of financial durable powers of attorney and the public's expectations about how such powers will operate.
Nebraska Law Review
Carolyn L. Dessin, Acting as Agent Under a Financial Durable Power of Attorney: An Unscripted Role, 75 Nebraska Law Review 574 (1996).