At Issue

A New Statutory Power of Attorney Form

By Stephanie A. Schantz

Few people use Wisconsin's statutory fill-in-the-blank power of attorney form.¹ According to the Department of Health and Family Services, the statutory power of attorney form is one of the least requested state forms issued for the benefit of Wisconsin citizens. Why? Several practicing attorneys, organizations for the elderly and citizens complain that the form is confusing, does not address the needs or concerns of a principal and fosters abuse by unscrupulous agents.

With that in mind, Sen. Brian Burke (D-Milwaukee) brought together an ad hoc committee of Wisconsin attorneys to develop legislation to overhaul the existing power of attorney form.² The committee was asked to accomplish four goals: 1) design a more comprehensible and user-friendly form; 2) address the needs of an ordinary individual with unsophisticated assets; 3) make the form consistent with similar Wisconsin forms, such as Wisconsin's health care power of attorney; and most important, 4) devise measures to curb abuse by unprincipled agents.

Highlights of the New Form

After much discussion, the committee agreed that a piecemeal approach to changing the statutory power of attorney form would be ineffective. Instead, a new form was created based upon one commonly used by Wisconsin attorneys. Now entitled the "Wisconsin Basic Power of Attorney for Finances and Property," the form contains several new features:

• A new list of powers that may be given to an agent is tailored to meet the needs of an individual with noncomplex assets. Unlike the current statutory power of attorney form, a description of these powers is self-contained within the new form. One no longer has to refer to four pages of complex statutes to explain the enormous powers given under the existing law. The new list of powers includes: payment of bills, banking, insurance, accounts, real estate, borrowing, securities, income tax, trusts, gifts, legal actions, professional assistance, compensation to the agent and accounting.
• The principal now may grant gifting authority to the agent, which is absent on the existing form. To curb abuse, the committee designed the separate highlighted section to include: a) a warning of the serious consequences of the authority to make gifts; b) a monetary limit for any one person or entity; and c) a yearly monetary limit to all persons or entities. Furthermore, an agent may make a gift to herself only if the principal expressly states it in the document's special instructions portion.
• The general authority clause is limited by three exceptions to curb potential abuse by an agent. The exceptions include: a) the power to make medical or health-care decisions for the principal under the document; b) the power to make, modify or revoke a will; and c) the power to make, amend or revoke a trust other than a burial trust.
• The principal may nominate a guardian of her person or a guardian of her estate. Although a court is not obliged to accept the principal's designation, the court can look to the form as an expression of the principal's wishes.
• The notice section has been rewritten. It includes language that advises the principal to select a reliable and trustworthy agent, warns that the document is intended for individuals who do not have complex financial assets, and informs of the procedure to revoke the document. Similar to the health care power of attorney, the notice states that the document becomes invalid if a spouse is named an agent and there is a subsequent divorce or marriage annulment.
• The committee redesigned the effective date clause to make the options, including the durable power of attorney, more comprehensible to the reader.

Features of the Proposed Legislation

The ad hoc committee also recommended additional statutory changes to complement the power of attorney form.

• Proposed section 243.07(3)(a) of the Wisconsin Statutes pertains to the impact of a court-appointed guardianship on the continuity of the durable power of attorney. As amended, both the health care power of attorney and the durable power of attorney for finances will provide that a guardian has the same power to revoke or amend the document that the principal would have had if the principal was not deemed incompetent. A court may supersede the guardian's power if it finds that the durable power of attorney and the instrument should remain in effect.
• All references to "incompetency" will be eliminated due to the possible confusion caused by the use of this term in the durable and basic powers of attorney and the statutory meaning in chapter 880. The statutory definition of "incapacity" in section 243.07(1) is deemed sufficiently broad to encompass the plain meaning of "incompetent."
• Similar to Wisconsin's health care power of attorney, the proposed statutes will explicitly provide for judicial review of an agent's performance.

Unresolved Issues

The ad hoc committee wrestled with issues it could not resolve. Although the current law regarding these issues is retained, the committee welcomes suggestions from members of the bar about the unresolved items, or the bill as a whole.

• The inclusion of an option for a proxy signature similar to that provided in Wisconsin's statutory wills was reviewed. Unlike wills, the power of attorney form does not require a witness at the signing of the document. The committee could not decide whether a witness should be required for a proxy signature option. Committee members argued that it might be too cumbersome for a document that is intended to be easily completed. Others believed not including a witness signature encourages abuse of the document. A proxy option currently is not included in the proposed legislation.
• The health care power of attorney form requires written statements by two physicians (or a physician and a psychologist) to determine when the document takes effect. Some committee members wanted to have the same procedure to determine when the springing power of attorney becomes effective. They felt it would be sufficient evidence for a third party to rely upon when assessing the document's validity. However, other members were concerned with the burden it might impose upon an agent to obtain the written statements, especially when the principal chooses to have the document be effective immediately and continue through disability or incapacity. A method of determining disability or incapacity is not included on the proposed legislation.
• The group did not resolve whether the document should permit the nomination of multiple agents. It could not devise an acceptable procedure to determine when an alternate agent may act or what evidence would be necessary to satisfy a third party. Also, the group could not determine if joint agents, acting independently, would be too confusing and burdensome for a third party. The proposed legislation continues current law on this subject, allowing the principal to name an agent and an alternate.

The ad hoc committee hopes that the new statutory power of attorney form will be practical, comprehensible and trustworthy. Perhaps then the document will be used by more Wisconsin lawyers and citizens.

Readers' comments will help fine-tune this legislation. Requests for a copy of the proposed legislation or any comments may be sent to Sen. Burke's office at P.O. Box 7882, Madison, WI 53707-7882.

Endnotes

¹ Wis. Stat. 243.10.

² Committee members include: Betsy Abramson, Coalition of Wisconsin Aging Groups, Elder Law Center; Prof. June Weisberger, U.W. Law School; Atty. Jim Jaeger, Hill, Glowacki, Jaeger & Reiley; Ron Sklansky, senior staff attorney, Legislative Council; and Atty. Stephanie A. Schantz, legislative aide for Sen. Brian Burke.

Wisconsin Lawyer