At Issue
A New Statutory Power of Attorney Form
By Stephanie A. Schantz
The new Wisconsin Basic
Power of Attorney for Finances and Property form is comprehensive and
easy to use, addresses ordinary individuals' needs, is consistent with
similar state forms and curbs abuse by unprincipled agents. |
Few people use Wisconsin's statutory fill-in-the-blank power of
attorney form.1 According to the Department
of Health and Family Services, the statutory power of attorney form is
one of the least requested state forms issued for the benefit of
Wisconsin citizens. Why? Several practicing attorneys, organizations for
the elderly and citizens complain that the form is confusing, does not
address the needs or concerns of a principal and fosters abuse by
unscrupulous agents.
With that in mind, Sen. Brian Burke (D-Milwaukee) brought together an
ad hoc committee of Wisconsin attorneys to develop legislation to
overhaul the existing power of attorney form.2 The committee was asked to accomplish four goals:
1) design a more comprehensible and user-friendly form; 2) address the
needs of an ordinary individual with unsophisticated assets; 3) make the
form consistent with similar Wisconsin forms, such as Wisconsin's health
care power of attorney; and most important, 4) devise measures to curb
abuse by unprincipled agents.
Highlights of the New Form
After much discussion, the committee agreed that a piecemeal approach
to changing the statutory power of attorney form would be ineffective.
Instead, a new form was created based upon one commonly used by
Wisconsin attorneys. Now entitled the "Wisconsin Basic Power of Attorney
for Finances and Property," the form contains several new features:
- A new list of powers that may be given to an agent is tailored to
meet the needs of an individual with noncomplex assets. Unlike the
current statutory power of attorney form, a description of these powers
is self-contained within the new form. One no longer has to refer to
four pages of complex statutes to explain the enormous powers given
under the existing law. The new list of powers includes: payment of
bills, banking, insurance, accounts, real estate, borrowing, securities,
income tax, trusts, gifts, legal actions, professional assistance,
compensation to the agent and accounting.
- The principal now may grant gifting authority to the agent, which is
absent on the existing form. To curb abuse, the committee designed the
separate highlighted section to include: a) a warning of the serious
consequences of the authority to make gifts; b) a monetary limit for any
one person or entity; and c) a yearly monetary limit to all persons or
entities. Furthermore, an agent may make a gift to herself only if the
principal expressly states it in the document's special instructions
portion.
- The general authority clause is limited by three exceptions to curb
potential abuse by an agent. The exceptions include: a) the power to
make medical or health-care decisions for the principal under the
document; b) the power to make, modify or revoke a will; and c) the
power to make, amend or revoke a trust other than a burial trust.
- The principal may nominate a guardian of her person or a guardian of
her estate. Although a court is not obliged to accept the principal's
designation, the court can look to the form as an expression of the
principal's wishes.
- The notice section has been rewritten. It includes language that
advises the principal to select a reliable and trustworthy agent, warns
that the document is intended for individuals who do not have complex
financial assets, and informs of the procedure to revoke the document.
Similar to the health care power of attorney, the notice states that the
document becomes invalid if a spouse is named an agent and there is a
subsequent divorce or marriage annulment.
- The committee redesigned the effective date clause to make the
options, including the durable power of attorney, more comprehensible to
the reader.
Features of the Proposed Legislation
The ad hoc committee also recommended additional statutory changes to
complement the power of attorney form.
- Proposed section 243.07(3)(a) of the Wisconsin Statutes pertains to
the impact of a court-appointed guardianship on the continuity of the
durable power of attorney. As amended, both the health care power of
attorney and the durable power of attorney for finances will provide
that a guardian has the same power to revoke or amend the document that
the principal would have had if the principal was not deemed
incompetent. A court may supersede the guardian's power if it finds that
the durable power of attorney and the instrument should remain in
effect.
- All references to "incompetency" will be eliminated due to the
possible confusion caused by the use of this term in the durable and
basic powers of attorney and the statutory meaning in chapter 880. The
statutory definition of "incapacity" in section 243.07(1) is deemed
sufficiently broad to encompass the plain meaning of "incompetent."
- Similar to Wisconsin's health care power of attorney, the proposed
statutes will explicitly provide for judicial review of an agent's
performance.
Unresolved Issues
The ad hoc committee wrestled with issues it could not resolve.
Although the current law regarding these issues is retained, the
committee welcomes suggestions from members of the bar about the
unresolved items, or the bill as a whole.
- The inclusion of an option for a proxy signature similar to that
provided in Wisconsin's statutory wills was reviewed. Unlike wills, the
power of attorney form does not require a witness at the signing of the
document. The committee could not decide whether a witness should be
required for a proxy signature option. Committee members argued that it
might be too cumbersome for a document that is intended to be easily
completed. Others believed not including a witness signature encourages
abuse of the document. A proxy option currently is not included in the
proposed legislation.
- The health care power of attorney form requires written statements
by two physicians (or a physician and a psychologist) to determine when
the document takes effect. Some committee members wanted to have the
same procedure to determine when the springing power of attorney becomes
effective. They felt it would be sufficient evidence for a third party
to rely upon when assessing the document's validity. However, other
members were concerned with the burden it might impose upon an agent to
obtain the written statements, especially when the principal chooses to
have the document be effective immediately and continue through
disability or incapacity. A method of determining disability or
incapacity is not included on the proposed legislation.
- The group did not resolve whether the document should permit the
nomination of multiple agents. It could not devise an acceptable
procedure to determine when an alternate agent may act or what evidence
would be necessary to satisfy a third party. Also, the group could not
determine if joint agents, acting independently, would be too confusing
and burdensome for a third party. The proposed legislation continues
current law on this subject, allowing the principal to name an agent and
an alternate.
The ad hoc committee hopes that the new statutory power of attorney
form will be practical, comprehensible and trustworthy. Perhaps then the
document will be used by more Wisconsin lawyers and citizens.
Readers' comments will help fine-tune this legislation. Requests for
a copy of the proposed legislation or any comments may be sent to Sen.
Burke's office at P.O. Box 7882, Madison, WI 53707-7882.
Stephanie A. Schantz, U.W., 1996, is a former legislative aide
for Sen. Brian Burke.
Endnotes
1 Wis. Stat. 243.10.
2 Committee members include: Betsy
Abramson, Coalition of Wisconsin Aging Groups, Elder Law Center; Prof.
June Weisberger, U.W. Law School; Atty. Jim Jaeger, Hill, Glowacki,
Jaeger & Reiley; Ron Sklansky, senior staff attorney, Legislative
Council; and Atty. Stephanie A. Schantz, legislative aide for Sen. Brian
Burke.
Wisconsin Lawyer