Although I am an estate administration lawyer in Chester County, PA, I rarely get into deep legal issues beyond explaining relevant cases in layman’s terms. However, I saw a recent article that I thought was interesting enough to discuss the legal implications for the non-lawyer recipients of my newsletter/blog.
A colleague of mine stated that someone had expressed to him frustration that, as agent under a Power of Attorney (POA), she was unable to represent her mother in a litigation matter.
The issue arose because an agent under a POA wanted to represent her mother in a pending litigation matter, and it brought up some interesting things about what Agents under POAs can and cannot do. The Court in the matter prohibited the Agent from acting as a Pro Se (without counsel) litigant, suggesting that it was the practice of law without a license. The Court did not prohibit the Agent from hiring counsel and directing counsel.
What the Law States
According to the Probate, Estates and Fiduciaries Code, “Powers of Attorney,” a principal may empower an agent to “pursue claims and litigation.” What this means is that the agent can:
1. Institute, prosecute, defend, abandon, arbitrate, compromise, settle or otherwise dispose of, and appear for the principal in, any legal proceedings before any tribunal regarding any claim relating to the principal or to any property interest of the principal.
2. Collect and receipt for any claim or settlement proceeds; waive or release rights of the principal; employ and discharge attorneys and others on such terms (including contingent fee arrangements) as the agent deems appropriate.
3. In general, exercise all powers with respect to claims and litigation that the principal could if present.
This brings up an important point. Delegation of authority in a POA is going to have some limits. Even though an agent under a POA does get to step into the shoes of the Principal for most matters, there are some instances where other laws or contractual obligations will overrule the grant of authority in a POA. One of them is to act Pro Se in a litigation matter.
Another, I would imagine, would apply to acting in a licensed capacity (such as a professional engineer, CPA, or other licensed professional). Another area where there may be conflict is in a business where a spouse may have a general POA which includes business matters, but the other spouse is a shareholder (partners, LLC member, etc.) in a business where the agreement between the owners prohibits anyone but the named interest owner to act on behalf of the business.
In most POAs, the document defines what an agent can and cannot do for his or her principal. Generally, when I review a POA, I am looking for the broadness of the powers and the specificity of permitted actions. All too frequently, the ones I see lack powers that make my job very difficult when I am helping the family after the principal has become incapacitated. If you have an unusual asset or situation where your incapacity may present unique management issues, please address this with your attorney so that those unique issues can be addressed in your POA.
How You Can Protect Yourself and Your Loved One
As an estate planning lawyer serving Chester County, PA, I cannot express more strongly how critical a well-drafted, comprehensive, state-specific POA is to overall planning. It can make or break a good plan, because a judge in a guardianship may not allow what a well-drafted POA does. If the POA is lacking, a guardianship may be required to take necessary action for your principal.
For experienced assistance with estate planning, Medicaid and other elder law matters, please call Slutsky Elder Law today at 610-546-2746.