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Wednesday October 21, 2015
Powers of Attorney in Kentucky
posted by Thomas J. Banaszynski
Tags: In the news
POWERS OF ATTORNEY IN KENTUCKY
Powers of attorney are important tools to help individuals conduct business, convey property, plan for disability. For example, individuals will often execute a power of attorney for an individual to act on their behalf in limited circumstances. This may involve the conveyance or release of property. Powers of attorney to convey or release real or personal property, or any interest in that property, are authorized pursuant to the provisions of KRS 382.370. Powers of attorney are frequently used in probate court where the personal representative of the decedent is out of town. Powers of attorney can allow the estate attorney to take the oath of office on behalf of the out-of-town, out-of-state personal representative.
Kentucky does not have a statutory form for a power of attorney. It does, however, have a form pursuant to the Kentucky Living Will Directive Act, discussed in KRS Chapter 311. Similarly, under a durable power of attorney, discussed in KRS Chapter 386. Below are some discussions regarding the living will directive and the durable power of attorney, as well as limits on powers of attorney, including some discussion by Jim Worthington discussing two recent Kentucky appellate cases regarding powers of attorney.
KENTUCKY DURABLE POWER OF ATTORNEY LAWS
A Durable Power of Attorney is a legal document granting to another person the right to take care of the individual’s affairs, should that individual become incapacitated. That person, grantor’s agent, an attorney-in-fact, is typically entrusted with the power and responsibility to manage financial or health care matters for the grantor of the power of attorney.
Financial matters would include paying bills, collecting monies, investing on behalf of the individual, buying or selling, or renting or leasing, property, etc.
A “Durable Power of Attorney” is specifically described in Kentucky Revised Statute (“KRS”) 386.093(1) to mean “a power of attorney by which a principal designates another as the principal’s attorney in fact in writing and the writing contains the words, ‘This power of attorney shall not be affected by subsequent disability or incapacity of the principal, or lapse of time’, or ‘This power of attorney shall become effective upon the disability or incapacity of the principal’, or similar words showing the intent of the principal that the authority conferred shall be exercisable notwithstanding the principal’s subsequent disability or incapacity, and, unless it states a time of termination, notwithstanding the lapse of time since the execution of the instrument.”
The death of the principal or grantor of the power of attorney will, typically, terminate the power of attorney. However, if the attorney-in-fact is not aware of the death of the principal or grantor of the power of attorney, the actions of the attorney-in-fact, taken in good faith under the power, are valid and enforceable, until such time as the attorney-in-fact learns of the death of the principal or grantor.
When a power of attorney becomes effective upon the disability or incapacity of the principal or grantor, “the power shall become effective upon a written determination by two (2) physicians, licensed to practice medicine, that the principal is unable, by reason of physical or mental disability, to prudently manage or care for the principal’s person or property, which written determination shall be conclusive proof of the attorney in fact’s power to act pursuant to the power of attorney.” KRS 386.093(5).
LIVING WILL DIRECTIVE
The Kentucky Living Will Directive Act is set forth in KRS Chapter 311, Sections .621 to .643. Pursuant to the Act, an agent may make health care decisions that an incapacitated person could make if he or she had the capacity to make those decisions, provided that the decisions are in accordance with the grantor’s wishes, and the agent or the health care surrogate has considered the recommendations of the attending physician.
A health care durable power of attorney, like a living will directive, may be created by an adult, then capable of making decisions; documented in writing, dated and signed by the creator or grantor; designates one or two adults as surrogates, to act on behalf of the creator or principal, if incapacitated. If two or more are named, any decisions must be unanimous. The health care durable power of attorney, also called an advanced healthcare directive, or living will directive, must be signed in the presence of the document creator or principal, and in the presence of each witness, or notarized.
An advanced health care directive, just as a regular will, may be revoked or limited in scope any time the creator or grantor has the requisite mental capacity (1) a written directive; (2) an oral statement of the intent to revoke in the presence of two adults, one of whom is a health care provider; (3) destruction of the directive or declaration, with an intent to revoke. A revocation is effective immediately, upon receipt by any individual, including a physician, of the revocation.
LIMITS ON POWERS OF ATTORNEY
In Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012), our Supreme Court held that a power of attorney did not give the attorney-in-fact authority to agree to arbitrate disputes with a nursing home where the agreement to arbitrate was not a requirement for the principal’s admission to the nursing home. The Ping Court strictly construed the power of attorney and determined that the agreement to arbitrate was outside the scope of the agency. The instrument’s language authorizing the attorney-in-fact “to do and perform any, all, and every act and thing whatsoever requisite and necessary to be done, to and for all intents and purposes, as I might or could do if personally present” did not act as a savings clause.
In Dishman v. Dougherty, ____ S.W.3d ____ (Ky.App. 2015) (opinion not final; rehearing denied June 30, 2015), the Kentucky Court of Appeals held that a power of attorney did not give the attorney-in-fact authority to create an irrevocable trust for the principal. First, KRS 386B.6-020(5) became effective in 2014 and requires that an attorney-in-fact must have “express” authorization in either the power of attorney or the trust to revoke, amend, or affect the distribution of property under a trust. Second, the power of attorney in Dishman included a provision about funding trust but was silent about creating them. Thus, the court applied the rule of construction preferring the specific to the general. Finally, the attorney-in-fact in Dishman was the spouse who had signed an antenuptial agreement evidencing a strong intent to keep her and her husband’s property separate. As in Ping, the Dishman Court did not give effect to the provision authorizing the attorney-in-fact “[t]o do and perform in my name all that I might individually do.”
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