A power of attorney is a document authorizing someone to act on your behalf with respect to financial and contractual matters. Among other acts, a person holding your power of attorney may sell your house, write checks from your bank account, or access your safe deposit box. A power of attorney is “durable,” meaning it continues in effect until you revoke it. Your death would also terminate any outstanding power of attorney.
Daughter Improperly Delegates Father’s Power of Attorney
There are limits to what a person may do under a power of attorney. Here is one illustration from a recent California appeals court decision. This is only an example and should not be construed as a complete statement of California law on the subject of powers of attorney.
This case involves an intra-family dispute over the ownership of a parcel of real estate in Merced County in Northern California. More precisely, a father and son both claim to be the property’s lawful owner. The son lived at the Merced property for several years but the legal title was held by a third party (ostensibly because the son, who is from Mexico, was having “citizenship issues” with the United States). In 2005, the third party signed title to the property over to the father.
Three years later, the son signed a quitclaim deed purporting to transfer the Merced property from his father to himself. The son claimed he was acting under his father’s durable power of attorney. In fact, the father signed a power of attorney naming his daughter as attorney-in-fact. The daughter then “delegated” her power to her brother. The father sued, claiming this was not a valid exercise of his power of attorney and the quitclaim deed was therefore void.
The California courts agreed. Under California law, an attorney-in-fact may only “revocably delegate authority to perform mechanical acts” to other persons. As the Court of Appeal explained in this case, “a purely mechanical act does not entail the exercise of discretion or judgment.” Here, the decision to transfer real estate obviously required the exercise of judgment, so the daughter could not delegate such decisions to her brother.
Furthermore, the Court of Appeals noted, an attorney-in-fact “has a duty to act solely in the interest of the principal and to avoid conflicts of interest.” That is, the daughter owed duty to protect her father’s legal and financial position. Instead, the court said, she allowed her brother to convey her father’s property to himself, despite knowing father and son were locked in a dispute over its ownership. Indeed, even if the son held his father’s power of attorney, he still could not have conveyed the property to himself under California law, as it would represent a clear conflict-of-interest.
Need Help With a Power of Attorney?
A durable power of attorney is an important estate planning tool designed to protect your property should you become incapacitated or are otherwise prevented from handling such matters. It is not supposed to be a weapon used by family members to settle disagreements. That is why before you sign a power of attorney or any similar document, you should consult with an experienced San Diego estate planning attorney. Contact the Law Office of Scott Soady if you would like to speak with someone today.