As a part of most elder law plans, an attorney will recommend that a client execute powers of attorney. These documents give another, the agent, powers to do certain acts on behalf of the person signing the document, the principal. In a Healthcare Power of Attorney, these powers would relate to being able to make healthcare decisions, access medical records, and talk to doctors. The powers held by the agent under a Financial Power of Attorney can be very broad, including property powers, financial powers, business powers, and legal action powers. This Financial Power of Attorney will be what we focus on here.

The agent, when acting under the power of attorney, is acting in a fiduciary capacity. What does this mean? The agent is basically stepping into the shoes of the principal and so must act in the best interest of the principal. Being an agent and having the powers outlined in the power of attorney is not authorization for the agent to do whatever he or she wants with the principal’s finances. But what happens when the agent is a spouse? Are the lines blurred? Can a spouse-agent transfer property to herself and not run afoul of her fiduciary obligations?

This topic was recently litigated in North Dakota. In Estate of Lindvig, the Supreme Court of North Dakota ruled that the spouse-agent could make such transfers. Let’s take a closer look at this case.

Arbitration agreements have been a hot topic in recent years. Last year, WealthCounsel posted a blog on the benefits and disadvantages of mandatory arbitration agreements. One of the major disadvantages is that mandatory arbitration provisions in contracts limits the choice to pursue other legal remedies should a legal dispute arise. Last year, CMS issued a new rule repealing the prohibition of the use of predispute arbitration agreements by long-term care facilities. But is there state law that could possibly protect residents in other types of care facilities? Let’s take a look at some recent case law that addressed this issue.

In Harris v. University Village Thousand Oaks (UTVO), a California Court of Appeals applied the state law that prohibits arbitration agreements in residential rental agreements to continuing care retirement community contracts. Any such agreement is void on the basis of public policy due to Cal. Civ. Code, § 1953, subd. (a)(4).

Recently, many have begun planning for the possibility that they may fall ill and may not be able to conduct business as usual. The most commonly thought of planning device for such situations is the power of attorney (POA). A POA is a document whereby a “principal,” the person signing the document, gives certain powers to an “agent,” the person designated to act on behalf of the principal. A POA allows an individual to name another person to act on their behalf during times of incapacity, for a particular purpose, for a specified duration of time, or even to simply execute everyday dealings for the individual. It all depends upon the type of POA established and the objectives sought.

Selecting the right POA document for the situation is critical for effective execution of the principal’s wishes. Some POAs give agents the power to make healthcare decisions during the principal’s incapacity. Others allow the agent to sign legal documents or financial paperwork for an unavailable principal. Some last until incapacity, others last until the principal’s death. The general actions an agent is permitted to take depends solely on what the POA has dictated. There have been many occasions where the bounds of the four corners of a POA were tested.