By Carol Hatch, John F. Wilcox and Susan Collins
April 21, 2010 – The Wisconsin Legislature has passed a new power of attorney act, which now awaits the governor’s signature.
The Uniform Power of Attorney for Finances and Property Act [Assembly Bill 704 (2009), hereinafter AB 704] will replace Wisconsin’s current statute, including the statutory form.
Sections 243.07 and 243.10 of the Wisconsin Statutes will be replaced with a new chapter 244. The Act is intended to provide greater protection for persons who wish to use durable powers of attorney and more detailed guidance for agents, as well as guidance and protection for third parties who are asked to accept powers of attorney.
The Act consists of two subchapters. Subchapter II contains the optional statutory form and miscellaneous provisions dealing with the Act’s general application and repeal of certain prior law.
Subchapter I includes definitions and general rules. Of particular note is the definition of “incapacity,” found at section 244.02(7), which replaces the term “disability” used in current law. AB 704, at 6. The Act’s definition of “incapacity” is consistent with the standard for appointment of a guardian under Wis. Stat. chapter 154.
Another significant change is the default rule in section 244.04 that makes a power of attorney durable unless the document provides otherwise. AB 704, at 8. This change from current law reflects the view that most principals prefer their powers of attorney to be durable as a hedge against the need for guardianship.
The default rule for when a power of attorney becomes effective is stated in section 244.09. Id. at 10-11. Unless the principal specifies that the power of attorney is to become effective upon a future date or event, the authority of an agent is effective when the power of attorney is executed. The current statute is silent on this matter.
Sections 244.11 through 244.18 also address matters on which the current statute is silent, including default rules for co-agents and successor agents, reimbursement and compensation, an agent’s acceptance of appointment, and the agent’s duties. Id. at 12-18. Section 244.16 sets out a list of persons who may petition the court to review the agent’s conduct, and section 244.17 addresses agent liability. Id. at 16-18. An agent may resign by following the notice procedures described in section 244.18. Id. at 18.
Section 244.19 is new. It protects persons who in good faith accept an acknowledged power of attorney without actual knowledge that the power has been revoked, terminated, or invalid, or that the agent is exceeding or improperly exercising the agent’s powers. Id. at 18-19. For this purpose, “acknowledged” means that the document was acknowledged before a notary. Section 244.19(4) further provides that a person who is asked to accept an acknowledged power of attorney may request and rely on an agent’s certification, an English translation (if the document uses a language other than English), or an opinion of counsel. Id. at 19.
Also new is section 244.20. This section details the circumstances under which a person may in good faith refuse to accept an acknowledged power of attorney. Id. at 19-22. Some of these circumstances include: if a request for a certification, translation, or opinion of counsel has been refused; if the person has actual knowledge that the agent’s authority has terminated; if the person believes that the power is not valid; or if the person makes a report to a designated law enforcement or adult-at-risk agency, stating a good faith belief that the principal may be subject to abuse.
Section 244.20(2) makes clear that it is not a “good faith refusal” if a person refuses to accept an acknowledged power of attorney because the document is “too old,” or because the person requires that a different form be used. Id. at 20. Under section 244.20(5), if a person refuses to accept an acknowledged power of attorney in violation of this section, a court may order the person to accept the power and to pay the reasonable attorney fees and costs of the party requesting the order. Id. at 21.
Subchapter II offers detailed descriptions of authority relating to subjects such as “real property,” “retirement plans,” and “taxes.” Id. at 22-43. A principal may incorporate a particular authority in full into the document either by referring to the short descriptive term for the subject or by referring to the statutory section number.
Subchapter II also addresses concerns about certain types of authority that might be used to dissipate the principal’s property or alter the principal’s estate plan. Id. Section 244.41(1) lists specific types of authority that cannot be implied from a grant of general authority, and that may be granted only through express language in the power of attorney. Id. at 22. Section 244.41(2) contains a default rule prohibiting an agent – other than the principal’s spouse – from making a gift to the agent or certain other persons. Id. at 23.
Section 244.61 is the statutory form durable power of attorney. Id. at 43-52. As under current law, the statutory form is optional and is designed for use by lawyers as well as laypersons. It contains plain language instructions to the principal and agent. Section 244.62 contains a sample agent certification form. Id. at 50-52.
Finally, sections 244.63 and 244.64 are miscellaneous provisions that clarify the relationship of the bill to other law and pre-existing powers of attorney. Id. at 52.
The Act is the result of a working group that included members of the State Bar Real Property, Probate and Trust Law and Elder Law sections, the Coalition of Wisconsin Aging Groups, the Department of Health Services, the banking industry, and consumer advocates.
For more about this new Act, look for an article in the June Wisconsin LawyerTM magazine.
Carol Hatch currently serves as chairperson of the Real Property, Probate & Trust Law Section Board. She is a partner with Nowlan & Mouat LLP in Janesville. John F. Wilcox is a solo practitioner in Eau Claire. Susan Collins is Senior Trust Counsel for Marshall & Ilsley Trust Company N.A. in Madison. All three authors served on the working group for AB 704.
