This column first appeared in the San Antonio Express News and other Hearst Newspapers on January 26, 2021.
Dear Mr. Premack: My father is Agent in the Durable POA for my aunt who is now incapacitated with severe Alzheimer’s. He is putting his affairs in order and wants to transfer his rights under the Durable POA to me. His concern is his sister will outlive him. He is making me the Executor of his estate. My aunt has no spouse or children. If the durable POA can't be transferred, what needs to be done to establish a new durable POA for my aunt despite her mental incapacity? – L.A.
There are a few avenues to examine in this situation, but all of them depend on what your aunt’s existing Durable Power of Attorney says. She signed it when she had mental capacity, and hopefully she hired an experienced attorney to write it for her. If she used a form from the internet, the pages she signed are probably lacking.
First, her Durable Power of Attorney should have been written to include successor Agents. It may say, to paraphrase, “I appoint my brother Louis, Sr. as Agent. If Louis dies, is incapacitated, or resigns, I appoint my nephew Louis, Jr. as successor Agent.” If it has such a clause, your father could have his lawyer write a resignation document to be attached to her Durable Power of Attorney. Upon his resignation – because your aunt said so in her actual signed Durable POA – then you would assume authority because she pre-selected you for that job.
I am assuming, of course, that a clause like that is included and that she named you as successor Agent. If she included such a clause but it names her next-door neighbor as successor Agent, then you are still powerless. If she failed to include such a clause at all, then you are still powerless.
Second, if her Durable POA was signed after September 2017 when the law was changed, it may include a provision allowing her Agent to delegate authority to someone of his selection. If so, your father could delegate his authority for specific transactions to you. You could act as his assistant, but you would not be his replacement.
Even if her Durable POA was signed after September 2017, your aunt’s attorney may have been unaware of the law change. The attorney may not have included authority to delegate. It must be specifically granted in the actual signed Durable POA before power to delegate exists.
Third, if her Durable POA was signed after September 2017, your aunt’s attorney may have known to include a provision allowing your father (as her Agent) to select a successor Agent. Again, that power must be specifically granted in the actual signed Durable POA. If it exists and if it gives him that authority, he could legally turn the reins over to you as replacement Agent. If the provision does not exist in her Durable POA, then you are still powerless.
Fourth, it is possible that your aunt’s experienced attorney included a provision in her Durable POA that allows the Agent to establish a Living Trust for her benefit and to transfer her assets in that trust. Part of establishing a Trust is determining who will act as manager (Trustee) of the Trust. If such a clause exists in her Durable POA and your father uses it to establish and fund a Trust, he can name you as Trustee. You would then manage all assets that had been transferred to the Trust. You would still not be Agent under her Durable POA, so certain important functions (like responsibility for filing her income taxes) would still fall to your father as her Agent.
Finally, if her Durable POA does not allow for any of the previous four choices, your father could resign as Agent and you could file in court to become her Guardian. Guardianship is slow, expensive, and supervised by the court system, so it is truly the last and worst option available.
Paul Premack is a Certified Elder Law Attorney, handling Wills and Trusts, Probate, and Elder Law issues. He is licensed to practice law in Texas and Washington. View past legal columns or submit free questions on those legal issues via www.Premack.com.