Iowa Enacts Provisions Regarding Uniform Power of Attorney Act
by: Paul McSheffrey
With Senate File 2168, the Iowa legislature has enacted the Uniform Power of Attorney Act. Beginning with the new section 633B.101, the act covers various subjects relating to powers of attorney including execution, jurisdiction, nomination of a conservator or guardian, when effective, termination, duties of a principal’s agent, and judicial relief available. The act applies to all powers of attorney except for a power to the extent that it is coupled with an interest of the agent in the subject of the power (such as a power given to a creditor in connection with a credit transaction), a power to make health care decisions, a proxy for voting or management rights respecting an entity, or a power created on a government form for a governmental purpose.
The act defines a power of attorney as a writing that grants authority to an agent to act in the place of the principal, whether or not the term “power of attorney” is used. Unless the power of attorney expressly states that the power is terminated upon the disability of the principal, then the power is considered “durable” and not terminated by such incapacity. The principal must sign the power of attorney or direct another person in their presence to sign the principal’s name for them. If another person signed the power of attorney, it can not be an agent named in the document. After signing, the power of attorney must be acknowledged before a notary public. Additionally, the new section 633B.301 provides for a statutory power of attorney form. In order to be effective, documents granting a power of attorney must substantially follow the statutory form.
The meaning of the power of attorney is determined by the jurisdiction named in the document. Otherwise, the jurisdiction where the power of attorney was created will determine the meaning. Assuming the power of attorney was properly executed, it becomes effective at that time unless the document provides for a future date or occurrence. The power of attorney will be terminated under several conditions such as the principal’s death, the principal’s incapacitation where the power of attorney is not durable, revocation of the power of attorney, the document provides for a termination date, the purpose of the power of attorney has been accomplished, where the agents authority is revoked, the agent’s incapacitation or death, or the agent’s resignation. However, a terminated power of attorney or revocation of authority is not effective as to another person that acts in good faith and does not have knowledge of the revocation or termination. Actions by such people will still bind the principal and their successors.
An agent must act in good faith in accordance with the principal’s reasonable expectations as actually known by the agent. The agent must follow the authority granted in the document and act loyally for the principal’s benefit, not create a conflict of interest, keep accurate records of transactions, cooperate with a person who has authority to make health care decisions, and preserve the principal’s estate plan. When an agent does not meet their duties, judicial relief is available to restore the principal’s property to what it would have been had the agent acted properly, along with attorney fees. In addition to the duties of an agent in following their specific and general authority granted in a power of attorney, the act provides for detailed guidance on certain transactions involving real property, tangible personal property, stocks and bonds, commodities and options, banks and other financial institutions, operation of a business, insurance and annuities, estates and trusts, claims and litigation, personal and family maintenance, government benefits, retirement plans, and taxes.
The Uniform Power of Attorney Act becomes effective in Iowa on July 1, 2014.
About the Author
Paul McSheffrey, J.D. is Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Northeastern University and earned his Juris Doctor at the New England School of Law. Paul is admitted to the Bar in Massachusetts and New York. He can be reached at paul@bankersadvisory.com
Paul McSheffrey, JD, is a senior regulatory compliance consultant with CLA. He is a graduate of Northeastern University and earned his juris doctor at the New England School of Law. He is admitted to the Bar in both Massachusetts and New York.
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