Power of Appointment AND Power of Attorney

Power of Appointment

authority to dispose of property under will

General power of appointment

—no restrictions or conditions on exercise of power

Nongeneral (special) power of appointment

—places limitations on holder’s exercise of power

Exercising power of appointment

• Any instrument, unless donor directs otherwise, may be used to exercise power

• Exercise of testamentary power of appointment becomes effective only at donee’s death

• Key determination is testator’s intent; language must clearly and specifically refer either to power of appointment or broader class of powers that include particular power at issue

Challenging power of appointment

—proceeding to contest validity may not be initiated later than the first of the following to occur:

• 120 days after written notice contesting existence of instrument exercising power is given based on failure to comply with execution formalities, undue influence, or lack of capacity

• Two years after death of person exercising power or

• Date person’s right to contest was precluded by adjudication, consent, or other limitation

Contracting the power

—DE does not recognize contract to exercise power as presentlyenforceable agreement

Powers of Attorney

—authorization to act on someone else’s behalf regarding legal, property, or equitable matters

Durable power of attorney - Applicability

—person’s personal assets and interests

Durable power of Attorney - Execution requirements

—personal power of attorney must be: (1) in writing, (2) signed by or on behalf of principal, (3) dated, (4) signed in presence of notary, and (5) signed in presence of adult witness who is not related to principal or entitled to any portion of their estate under then-existing will, codicil, amendment, or trust instrument

Durable Power of Attorney - Effectiveness

—when executed unless otherwise provided

Termination - Personal power of attorney

—principal dies, revocation (by principal or by court order), terminating event happens, purpose is accomplished

Termination - Agent's authority

—principal revokes it, agent dies, becomes incapacitated, or resigns, dissolution or annulment of marriage to principal, power of attorney terminates

Agent's duties

—act in principal’s best interests, in good faith, within scope of authority, loyally for principal's benefit

Agent’s liability

—provision relieving agent of liability for breach of duty is binding except to extent it (1) relieves agent of liability for bad faith and reckless breaches or (2) was result of undue influence

Advance healthcare directives - Execution requirements

—must be (1) in writing, (2) signed by or for declarant, (3) dated, and (4) signed in presence of two qualified witnesses (e.g., must not be relative of or be directly financially responsible for medical care of declarant)

Advance healthcare directives - Effectiveness

—upon determination declarant lacks capacity

Advance healthcare directives - Decisions

—made by instructions and patient’s wishes to extent known to agent (look to patient’s values, likelihood of regaining capacity, likelihood of death, benefit versus burden of treatments, reliable statements previously made by patient)

Advance healthcare directives - Revocation

—any mentally competent individual may revoke by signed writing or in any manner communicating intent to revoke in presence of two competent persons, including one healthcare provider

Advance healthcare directives - Eligible agents

—must be 18; unless related to principal, cannot be associated with healthcare institution where principal is receiving care

Advance healthcare directives - Surrogates

—if agent has not been appointed or cannot serve, surrogate (family member, if available) may make decisions on patient’s behalf