Checklist of Common Mistakes in Durable General Power of Attorney
This Preventive Law Study was written by: John Goodson, Colleen Manley and Christine Goodson Forakis.
Summary
Written for estate planning attorneys, this guide is crucial to any properly executed durable general power of attorney. After decades of practice and experience, John Goodson designed these checklists in order to prevent the attorney mistakes that are far too frequently made when drafting documents. Mistakes can be costly to the drafting attorney who may have to redraft or amend a document at their own expense. The Checklist of Common Mistakes in a Durable General Power of Attorney is part of a series of checklists created to aid the estate planning community.
Based on a presentation by John Goodson To the College of Estate Planning Attorneys
(Legend: “X” = needs correction or attention; “—“ = OK; “n/a” = not applicable; and “?” = have question here)
| Client Name: | Evaluator Name: | |
| Date of Review | Number of Errors: | Percent of Errors |
| ____ | 1. | No custodial arrangement to release Power of Attorney only when incapacitated, missing, or with specific authority. | ||||||||||||||||
| ____ | 2. | Expiration date prescribed or considered—best if left “unlimited” and renewed by follow up calendar every five years. | ||||||||||||||||
| ____ | 3. | No express statement that this document shall be valid when principal is legally incapacitated and is a Durable Power of Attorney. | ||||||||||||||||
| ____ | 4. | No objective of documents stated at the beginning so as to alert those reading it of the purpose. | ||||||||||||||||
| ____ | 5. | No recognition that the Power of Attorney will supplement and not contradict any Living Will and Medical Power of Attorney. | ||||||||||||||||
| ____ | 6. | No broad all encompassing statement of powers so as to demonstrate broad intent. | ||||||||||||||||
| ____ | 7. | No statement that attorney-in-fact has same powers as principal generally. | ||||||||||||||||
| ____ | 8. | No specific authority to deal with retirement and employee benefit plans so as to reassure plan administrators. | ||||||||||||||||
| ____ | 9. | No specific authority to process all transactions so as to reassure bankers. | ||||||||||||||||
| ____ | 10. | No specific authority to process all lawsuits and claims to reassure lawyers and courts. | ||||||||||||||||
| ____ | 11. | No specific authority to transact business so as to reassure business associates and those involved with the business. | ||||||||||||||||
| ____ | 12. | No specific authority to deal with property so as to reassure real estate personnel. | ||||||||||||||||
| ____ | 13. | No specific authority to make investments so as to reassure stock brokers and brokerage firms. | ||||||||||||||||
| ____ | 14. | No specific authority to nominate guardians and conservators to reassure probate courts. | ||||||||||||||||
| ____ | 15. | No specific authority to take care of the person and household. | ||||||||||||||||
| ____ | 16. | No specific authority to make health care decisions in case the Medical Power of Attorney is not available. | ||||||||||||||||
| ____ | 17. | No specific authority to handle transportation to reassure a car dealer. | ||||||||||||||||
| ____ | 18. | No specific authority to borrow on credit and use charge accounts to reassure banks and other lenders. | ||||||||||||||||
| ____ | 19. | No specific authority to pay attorney-in-fact or principal’s friends or relatives so as to eliminate conflict of interest problems. | ||||||||||||||||
| ____ | 20. | No specific authority to purchase insurance to reassure insurance agents and companies. | ||||||||||||||||
| ____ | 21. | No specific authority to purchase Flower Bonds to reduce estate tax costs. | ||||||||||||||||
| ____ | 22. | No specific authority to pay support to family members of principal. | ||||||||||||||||
| ____ | 23. | No specific authority to maintain club memberships (i.e. a country club membership). | ||||||||||||||||
| ____ | 24. | No specific authority to file government papers to reassure bureaucrats. | ||||||||||||||||
| ____ | 25. | No specific authority to hire employees and agents so as to reassure persons hired that they will be paid. | ||||||||||||||||
| ____ | 26. | No specific authority to transfer assets and deal with trusts of principal. | ||||||||||||||||
| ____ | 27. | No specific authority to make gifts so as to continue strategic estate planning gift moves. | ||||||||||||||||
| ____ | 28. | No specific authority to sign disclaimer that may be advantageous in estate planning. | ||||||||||||||||
| ____ | 29. | No specific authority to do all other acts necessary to carry out specific power so as to fill in gaps. | ||||||||||||||||
| ____ | 30. | No provision for broad construction. | ||||||||||||||||
| ____ | 31. | No reservation of right for principal to terminate Durable Power of Attorney. | ||||||||||||||||
| ____ | 32. | No provision to protect those who rely on Durable General Power of Attorney. | ||||||||||||||||
| ____ | 33. | No limitation on powers to:
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| ____ | 34. | No provision to automatically revoke power by recording revocation at the county recorders office. | ||||||||||||||||
| ____ | 35. | No provisions to establish an office where Power of Attorney will be recorded and revoked so that persons dealing with attorney-in-fact may know it has been revoked. | ||||||||||||||||
| ____ | 36. | No provisions to easily determine incapacity of principal. | ||||||||||||||||
| ____ | 37. | No provisions to easily determine how incapacity is restored. | ||||||||||||||||
| ____ | 38. | No provision to exonerate attorney-in-fact from negligence without affirmative evidence. | ||||||||||||||||
| ____ | 39. | No provision to revoke all prior Powers of Attorney. | ||||||||||||||||
| ____ | 40. | No severability provision to sever out any unenforceable provisions so as to retain validity of the rest. | ||||||||||||||||
| ____ | 41. | No designation of the state whose laws shall be used to interpret the Durable General Power of Attorney. | ||||||||||||||||
| ____ | 42. | No provisions for at least two back up Durable General Powers of Attorney if first choice attorney in fact is not present. | ||||||||||||||||
| ____ | 43. | No consideration of joint attorneys-in-fact where one could be intimidated or is not fully qualified or trusted. | ||||||||||||||||
| ____ | 44. | Does not include method of resignation of attorney-in-fact. | ||||||||||||||||
| ____ | 45. | Does not automatically revoke Power of Attorney if spouse files for divorce or separation. | ||||||||||||||||
| ____ | 46. | Does not automatically revoke Power of Attorney if attorney-in-fact is incapacitated. | ||||||||||||||||
| ____ | 47. | No letter warning that document may not be effective after five years. | ||||||||||||||||
| ____ | 48. | Does not contain statutory warning as to the rights being given up. | ||||||||||||||||
| ____ | 49. | Does not have provision stating that this document supplements an already existing Medical Power of Attorney and Living Will. | ||||||||||||||||
| ____ | 50. | No provision that the document is intended to be legal and effective in all states and countries. | ||||||||||||||||
| ____ | 51. | Not using large print so the client and older low-level bureaucrats may read with ease. |
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DISCLAIMER
The content of this report is general in nature and is meant to be used for informational purposes only. Due to possible changes in the law and interpretations of the law, in addition to the uniqueness of each individual’s situation, this report should not be relied upon as an expression of legal advice. Before any action is taken by the reader, it is imperative that legal counsel or professional advisors be consulted.