In 2013, the Minnesota legislature approved a number of changes to the Minnesota Statutory Short Form Power of Attorney. Although the form appears similar to previous versions, it does contain a number of significant changes.
Notice to the Principal and Attorneys-in-Fact
For Powers of Attorney drafted as of January 1, 2014 and thereafter, the statutory form contains an Important Notice to Principal and an Important Notice to the Attorney-In-Fact. The Principal is the person who is granting the Power of Attorney and the Attorney-In-Fact is the person authorized to act on behalf of the Principal.
Important Notice to the Principal
Principal is giving broad and sweeping powers to the Attorney-In-Fact.
Actions by the Attorney-In-Fact will bind the Principal, heirs and assigns, or personal representative of the Principal’s estate.
The powers given include granting the Attorney-In-Fact power to enter transactions even without consent or advanced notice from the Principal.
The power of the Attorney-In-Fact does not apply to health care directives.
States that the duties of the Attorney-In-Fact include the responsibility to keep complete records.
States that the Principal has the ability directly, or by naming another individual, to request periodic accountings.
The Attorney-In-Fact must provide accountings if the Attorney-In-Fact has been reimbursed for any expenditure made on behalf of the Principal.
The Attorney-In-Fact is personally liable to any person including the Principal, for injuries caused by action taken by the Attorney-In-Fact in bad faith under the Power of Attorney or by failing to account as required.
The Power of Attorney terminates upon court order if the Attorney-In-Fact does act improperly.
The Power of Attorney can be revoked by the Principal, terminating the power of the Attorney-In-Fact.
Divorce or separation will terminate the appointment of a spouse as an Attorney-In-Fact.
Important Notice to Attorney-In-Fact
The new form contains an Important Notice to the Attorney-In-Fact and includes the following information that the Attorney-In-Fact must:
Act with the interest of the Principal utmost in mind.
Exercise power in the same manner as an ordinarily prudent person of discretion and intelligence would do in the management of his or her own affairs.
Render an accounting as directed or whenever reimbursed for expenditures made on behalf of the Principal.
Act in good faith and in the best interest of the Principal, using due care, competence, and diligence.
Cease acting if the Attorney-In-Fact learns of any event that terminates the Power of Attorney.
Disclose the identity or disclose that the Attorney-In-Fact is acting as Attorney-In-Fact whenever acting on behalf of the Principal.
Acknowledging that the Attorney-In-Fact has read and understood the notice by signing the Power of Attorney.
That the Attorney-In-Fact is personally liable to any person including the Principal injured by actions taken by the Attorney-In-Fact in bad faith or by failing to account as required by the Power of Attorney.
The third article of the Power of Attorney was revised to change the reference regarding transfers to attorneys-in-fact to now specifically reference gifts to attorneys-in-fact. A Principal must decide whether to allow the Attorney-In-Fact to make gifts to the Attorney-In-Fact or to someone the Attorney-In-Fact has a legal obligation to support. If the Principal does decide to allow the Attorney-In-Fact to make such gifts, then the Principal must insert the name of the Attorney-In-Fact.
As of August 1, 2013, any “interested person”, as defined under the Probate Code, can petition a court for review of an Attorney-In-Fact’s actions, seeking an accounting of those actions. If such a court action occurs, the Principal and any person the Principal named as entitled to an accounting under the Power of Attorney, can recover attorney’s fees if the court finds that the Attorney-In-Fact failed to provide the required accounting.
Acknowledgment of Notices
The Principal must now initial the Power of Attorney noting that the Principal has reviewed the Important Notice to the Principal. The Attorney-In-Fact must now sign an acknowledgment noting that the Attorney-In-Fact has read and understood the Important Notice to the Attorney-In-Fact. Although the signature of the Attorney-In-Fact does not need to be notarized, the Power of Attorney is not effective until the Attorney-In-Fact has signed the acknowledgment.
This article is intended to acquaint the reader with some general principles regarding changes to the Minnesota Statutory Short Form Power of Attorney. It is not intended to convey legal advice with respect to the reader’s specific circumstances. The reader is therefore encouraged to call one of the attorneys who practice in the trust and estates group at Quinlivan & Hughes, P.A. if they have any questions regarding a Power of Attorney (320-251-1414).