Attorney Power Of Attorney 4 — Questions and Answers
Question 1: An agent under a POA wants to purchase the principal's house for themselves at a below-market price. This transaction is:
- Permissible if the agent discloses the purchase price to the principal
- Generally prohibited as a self-dealing transaction unless the POA expressly permits it and the principal consents (Correct answer)
- Always permissible because the agent has full authority
- Permissible if authorized by a notary public
Correct answer: Generally prohibited as a self-dealing transaction unless the POA expressly permits it and the principal consents
Self-dealing — an agent transacting with themselves on the principal's behalf — is a breach of fiduciary duty unless the POA expressly authorizes it and informed consent is obtained.
Question 2: Which statement best describes a 'co-agent' arrangement in a power of attorney?
- Two attorneys who draft the POA together
- Two or more agents appointed simultaneously, who may act independently or jointly as specified (Correct answer)
- A backup agent who acts only if the primary agent dies
- An agent and their attorney who consult on decisions
Correct answer: Two or more agents appointed simultaneously, who may act independently or jointly as specified
Co-agents are multiple persons simultaneously appointed as agents, with the POA specifying whether they must act jointly or may act independently.
Question 3: A bank refuses to honor a validly executed durable power of attorney. Under the UPOAA, the principal's recourse includes:
- Filing a complaint with the state bar association against the bank's counsel
- Seeking a court order compelling acceptance and potentially recovering attorney's fees (Correct answer)
- Only re-executing a new POA with bank approval
- Reporting the bank to the FDIC for regulatory sanction
Correct answer: Seeking a court order compelling acceptance and potentially recovering attorney's fees
The UPOAA provides that a court may order a third party to accept a POA and may award attorney's fees and damages when refusal is unreasonable.
Question 4: The 'successor agent' clause in a power of attorney refers to:
- An agent who inherits the principal's estate
- An alternate agent who steps in if the primary agent is unable or unwilling to serve (Correct answer)
- A court-appointed guardian who replaces the agent
- A co-agent who acts when the primary agent is traveling
Correct answer: An alternate agent who steps in if the primary agent is unable or unwilling to serve
A successor agent is a backup designated to serve if the primary agent resigns, becomes incapacitated, dies, or is otherwise unavailable.
Question 5: Which of the following powers requires explicit authorization under most modern POA statutes and is NOT implied by a general grant of authority?
- Depositing funds into the principal's bank account
- Creating or amending the principal's revocable trust (Correct answer)
- Paying the principal's routine bills
- Renewing the principal's existing lease agreements
Correct answer: Creating or amending the principal's revocable trust
Trust creation and amendment is a hot-power requiring express authorization because it can substantially alter the principal's estate plan.
Question 6: In the context of elder law, a POA executed when an elderly principal was subjected to undue influence may be challenged on grounds of:
- Lack of proper witnessing formalities only
- Lack of capacity or undue influence, rendering the document voidable (Correct answer)
- Improper notarization, making it void automatically
- Failure to record the document with the county clerk
Correct answer: Lack of capacity or undue influence, rendering the document voidable
A POA procured through undue influence or executed without mental capacity may be challenged and set aside as voidable in a court proceeding.
Question 7: Which statement accurately describes the relationship between a power of attorney and a guardianship/conservatorship?
- A guardianship automatically revokes any existing POA
- A court may appoint a guardian whose authority supersedes that of an existing agent under a POA (Correct answer)
- A POA is legally superior to a court-ordered guardianship in all circumstances
- Both documents grant identical powers and operate simultaneously without conflict
Correct answer: A court may appoint a guardian whose authority supersedes that of an existing agent under a POA
When a court appoints a guardian or conservator, the court's order typically supersedes the agent's POA authority, giving the court-appointed fiduciary control.
Attorney Power Of Attorney 4
An agent under a POA wants to purchase the principal's house for themselves at a below-market price.
This transaction is: