Vol. 83, No. 8, August 2010
Interpreting Section 244.57 Gifting under the New Uniform POA for Finances and Property
Thank you to the authors for writing “Offering Clarity and Guidance: New Uniform Power of Attorney for Finances and Property” in the June 2010 Wisconsin Lawyer. I have been reviewing and revising the durable power of attorney forms I use for my clients in light of the new law and have a question regarding how section 244.57 regarding gifting applies. I would appreciate your interpretation of the statute section.
The article states, “Absent modification, the agent is limited to making gifts of no more than the annual federal gift-tax exclusion amount, or twice that amount if the principal and the principal’s spouse consent to split gifts. The agent may make only gifts that are consistent with the principal’s objectives, if actually known by the agent, or if unknown, only gifts that are consistent with the principal’s best interest based on all relevant factors. The relevant factors include the value and nature of the principal’s property, the principal’s foreseeable obligations and need for maintenance, the minimization of taxes, the principal’s eligibility for benefits, and the principal’s personal history of making or joining in making gifts.”
The article implies that gifts under 244.57(2)(a) are subject to the conditions of 244.57(2)(c). However, given the use of the word “all” in the paragraph preceding the listing of the authority granted to the agent and the fact that each act authorized is listed in its own subheading, couldn’t the statute be interpreted to mean that each act is independent of the other?
Section 244.57(2) lists three separate acts that the agent can do on behalf of the principal – “language in a power of attorney granting general authority with respect to gifts authorizes the agent to do all (emphasis added) of the following:”; it then lists 244.57(2)(a)-(c). If each stands on its own, it can be argued that an agent may make gifts under 244.57(2)(c) that are not limited to the annual federal gift-tax exclusion amount if the agent determines that such a gift is consistent with the principal’s objectives. This would allow for a situation in which the principal has already established a gifting program with gifts that exceed the annual exclusion amount or a variety of other situations in which larger gifts might be in the principal’s best interest – for example, the acceleration of a charitable gift or bequest, and so on.
I realize that this can be accomplished by modifying the language as needed, but, if the statute is meant to be interpreted in the manner described above, such modification may not be necessary. In addition, the need for such modification might not be known at the time the durable power of attorney is executed and a broader interpretation of the statute would provide additional flexibility.
Atty. Heather B. Zeise, Zeise Law LLC, Green Bay
Response: The State Bar Real Property, Probate, and Trust Law Section study committee that worked on this bill will meet in early fall to review several issues, including those raised by Ms. Zeise in the letter above. Thank you for the feedback. There will likely be a trailer bill. – Susan L. Collins, Carol J.B. Hatch, & John F. Wilcox
Bar Leaders Should Have Experience
I wish every lawyer would read the letter of Gary Sherman in the May 2010 Wisconsin Lawyer. It is comprehensive, yet succinct.
Mr. Sherman wisely supports candidates for president-elect who have a record of being sufficiently active in the State Bar to effectively lead it. He points out that to understand its budget, you need to understand the many, many activities in which our Bar engages and how they work.
We who have been given the power of self-regulation, to serve the higher calling of justice, should care about this privilege and the obligations that come with it.
Our Bar leaders have cared, and the integrated Bar has demonstrated its value and superiority over a nonintegrated bar.
Atty. Jack DeWitt, Madison