Treatise 2009 VA Code

2010 Virginia Uniform POA Law
Uniform Law Commission 
A national survey was conducted by the Joint Editorial Board for Uniform Trust and Estate Acts (JEB). Forty-four jurisdictions were represented in the 371 survey returns. It demonstrated a consensus of opinion in excess of seventy percent that a power of attorney state should: (1) provide for confirmation that contingent powers are activated; (2) revoke a spouse-agent’s authority upon the dissolution or annulment of the marriage to the principal; (3) include a portability provision; (4) require gift making authority to be expressly stated in the grant of authority; (5) provide a default standard for fiduciary duties; (6) permit the principal to alter the default fiduciary standard; (7) require notice by an agent when the agent is no longer willing or able to act; (8) include safeguards against abuse by the agent; (9) include remedies and sanctions for abuse by the agent; (10) protect the reliance of other persons on a power of attorney; and (11) include remedies and sanctions for refusal of other persons to honor a power of attorney.

Uniform Power of Attorney Act

The Uniform Law Commission has drafted a Uniform Power of Attorney Act in 2006.  The states of Colorado, Idaho, and New Mexico have already adopted it.  The Act was introduced to the states of Illinois, Indiana, Maine, Maryland, Minnesota, Montana, Nevada, Oregon, and Virginia. 

Of course, each state will modify some provisions of the Act, but it will clarify and modernize state laws.  The Act preserves the effectiveness of durable powers as a low-cost, flexible, and private form of surrogate decision-making.  It provides mandatory provisions that provide safeguards for the protection of the principal, the agent, and persons who are asked to rely on the agent’s authority.  It modernizes the various areas of authority that can be granted to an agent and requires express language authorization by the principal where certain authority could dissipate the principal’s property or alter the principal’s estate plan.

It provides step by step prompts for designation of agents, successor agents, and the grant of authority through an optional statutory form.  It offers clearer guidelines for the agent, who is often a trusted family member.  It recognizes that an agent who acts with care, competence, and diligence for the best interest of the principal is not liable solely because he or she also benefits from the act or has conflicting interests.  It permits a principal to include in the power of attorney an exoneration provision for the benefit of the agent.  It provides ways for the agent to give notice of resignation if the principal is incapacitated.  

The Act encourages acceptance of a power of attorney by third parties by providing broad protections for the good faith acceptance or refusal of an acknowledged power of attorney.  It recognizes portability of powers of attorney validly created in other states.  It offers an additional protective measure for the principal by providing that third persons may refuse the power if they have the belief that “the principal may be subject to physical or financial abuse, neglect, exploitation or abandonment by the agent or person action for or with the agent, make a report to the appropriate adult protective service agency.” 

The Act consists of 4 articles.  The first two state basic substance.  The third contains an optional statutory form and the last article consists of miscellaneous provisions dealing with general application of the Act and a repeal of certain prior acts. 

Virginia New Act

The Act in a form of a bill was introduced to the Commonwealth of Virginia in the 2008 session.  This bill is supported by AARP and the Virginia Bankers Association.  This bill was not pursued but in fall of 2008 a new version of the Act was recommended for enactment.  The General Assembly enacted the bill with amendments made by the House of Delegates and with a re-enactment provision which provides that the, “Act shall not become effective unless reenacted by the 2010 Session of the General Assembly.” 

Comparison with Maryland and D.C.

The state of Maryland is also considering adopting the Unified Power  of Attorney Act.  The current provisions for powers of attorney are located under Title 15 of the Maryland Annotated Code of 1957.  This title deals with general fiduciary powers, there is no article specific to powers of attorney.  The District of Columbia has its own statutory form under D.C. Code Ann. § 21-2101[4].  In this statutory form, the principal needs to initial each power listed.  It protects third parties who rely on the power of attorney with the following language: “I agree that any third party who receives a copy of this document may act under it.  Revocation of the power of attorney is not effective to a third party until the third party learns of the revocation.  I agree to indemnify the third party for any claims that arise against the third party because of reliance of this power of attorney.”  This statutory form set the standard of liability of the agent and provides some protection for the third party’s reliance and liability.  However, D.C. Code Ann. § 21-2102 et seq. only list the powers that the agent may have.  Some of the concerns raised in the survey for implementing a new power of attorney act are not answered in this statute.  The timing of the activation of the power, the revocation of the power upon dissolution or annulment of the marriage, or portability provisions are not answered.   


The most significant requirement is that the principal’s signature needs to be notarized for recordation purposes.  In addition, the acknowledged signature by a notary carries the statutory presumption of validity.  Now-a-days, for privacy purposes, the social security number of the principal should not be mentioned on the power of attorney. 

Some states require that the power of attorney be executed in the same manner as a will or a deed.  To ensure its portability, the power of attorney should be witnessed by two unrelated, disinterested witnesses and the principal’s signature should be notarized. 

In order to satisfy recordation requirement, the power should be notarized, each individual’s surname should be underscored or capitalized, each page of the power should be numbered, and the first page of the power should show the name of the draft person. 

Under the Act the paper copies and electronically transmitted copies have the same force and effect as the original. 

The Act encourages powers of attorney portability.  A power of attorney created according to the laws of the state where it is created will be valid in Virginia. 

Federal Law Supersedes Power of Attorney

Certain federal government agencies do not recognize state powers of attorney and require the execution of their own form.  The Internal Revenue Service has its own Form 2848[5] “Power of Attorney and Declaration of Representative” where not everybody can be a representative of the principal. The IRS accepts attorneys, CPAs, Enrolled Agents, Officers, and family members.  The IRS will assign a CAF[6] number to the representative.  Social Security Administration has a Representative Payee Program.  The individual will have to make an appointment with the Social Security Administration that will investigate on the necessity of naming a representative payee.  The Representative Payee will have to file annual accounting report.  Treasury Direct has its own form called Durable Power of Attorney for Securities and Savings Bond Transactions[7].

Power of Attorney Abuses

Powers of attorney confer a great deal of authority without regular oversight or clear standards for agent conduct.  Advocates for older people often call the power of attorney a “license to steal.”  There is no national data on the incidence of power of attorney abuse, but adult protective services and criminal justice professionals report an explosion of financial exploitation cases of this type.  The most recent analysis of compiled state adult protection services data was collected in 2003 and indicated that 20.8 percent of the reports made to state adult protective services about persons age 60 or older concerned financial exploitation.  Power of attorney abuse takes many forms.  An agent may spend the principal’s money for self-dealing purposes.  We often see the agent buying a car for him/herself instead of paying the principal’s nursing home care.  The agent may exceed the intended scope of authority by making gifts when the power has not been granted.

Unfortunately, the abuses are rarely detected if the principal has become incapacitated because there is no monitoring of the agent’s actions by a third party unless the principal has authorized such monitoring in the power of attorney.  Even if the power of attorney abuse is detected, there are several reasons why it can be difficult for the civil justice system to hold the agent liable and for the criminal justice system to hold the agent accountable.  The lack of statutory clarity about agent duties poses challenges to civil litigation and criminal prosecution.  The agent may have dissipated the principal’s assets making it impossible to pursue an often costly civil litigation against the agent.  The victim of abuse by a power of attorney is aged sixty or older and may be able to get free civil legal help from a program that is funded through the Older Americans Act.  Law enforcement officers may not understand that power of attorney abuse is a crime and fail to investigate allegations. On the other hand, prosecutors may not receive case referrals from adult protective services agencies, banks, or law enforcement agencies.  Finally, there is a lack of resources to prosecute these cases which can be extremely challenging and labor intensive.  A civil lawyer can help the principal revoke the power of attorney.  The attorney can ask the civil court to order that the agent provide an accounting of how the principal’s money has been spent and may ask for rescission, to un-do transactions conducted by the agent.  In addition, the attorney may sue the agent for conversion, for stealing the principal’s money or assets.  Finally, the attorney may petition the court to declare the principal to be incapacitated and appoint a guardian and/or conservator.  With a criminal prosecution, the agent can be accused of exploitation, embezzlement, forgery, fraud, larceny, money laundering, and theft. 

The Uniform Law Commissioners have proposed the following key provisions in the Uniform Power of Attorney Act that benefit and protect people who execute powers of attorney:  (1) a clear statement of the agent’s duties including the agent’s responsibility to act in good faith, within the scope of authority granted, and according to the principal’s known expectations or best interest, such as preserving estate plans and cooperating with health care proxies;(2) expressed authorization for exercising “hot powers”; (3) a provision that a third party may refuse to honor a power of attorney when the third party reports suspected abuse to an adult protective service agency or knows that someone else has made a report; and (4) liability for malfeasant of agents for damages, attorney’s fees, and cost.  We will know the result of these provisions when enough states adopt the Uniform Power of Attorney Act for several years.                                                                                    Footnotes omitted.