hb 0703

CHAPTER 257

HB 703 - FINAL VERSION

AN ACT relative to durable powers of attorney.

SPONSORS: Rep. Dokmo, Hills 14; Rep. Rowe, Hills 14; Rep. Leone, Sull 2

This bill specifies that a durable power of attorney does not authorize an attorney in fact to make gifts unless the durable power of attorney explicitly authorizes such gifts. This bill also enacts explanatory language that may be included in a durable power of attorney.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT relative to durable powers of attorney.

Be it Enacted by the Senate and House of Representatives in General Court convened:

257:1 New Paragraphs; Prevention of Frauds and Perjuries; Powers of Attorney, Disability or Incompetence of Principal; Gifts; Durable Power of Attorney Document; Notification. Amend RSA 506:6 by inserting after paragraph IV the following new paragraphs:

V. An attorney in fact is not authorized to make gifts to the attorney in fact or to others unless the durable power of attorney explicitly authorizes such gifts.

VI. The following disclosure statement, signed by the principal, may accompany a durable power of attorney:

THIS IS AN IMPORTANT LEGAL DOCUMENT. BEFORE SIGNING THIS DOCUMENT YOU SHOULD KNOW THESE IMPORTANT FACTS:

Notice to the Principal: As the "Principal," you are using this Durable Power of Attorney to grant power to another person (called the "Agent" or "Attorney in Fact") to make decisions, including, but not limited to, decisions concerning your money, property, or both, and to use your money, property, or both on your behalf. If this written Durable Power of Attorney does not limit the powers that you give to your Agent, your Agent will have broad and sweeping powers to sell or otherwise dispose of your property, and to spend your money without advance notice to you or approval by you. Under this document, your agent will continue to have these powers after you become incapacitated, and unless otherwise indicated your Agent will have these powers before you become incapacitated. You have the right to retain this Power and not to release this Power until you instruct your attorney or any other person who may hold this Power of Attorney to so release it to your Agent pursuant to written instructions. You have the right to revoke or take back this Durable Power of Attorney at any time, so long as you are of sound mind. If there is anything about this Durable Power of Attorney that you do not understand, you should seek professional advice.

The language required by this paragraph shall not confer any powers to the agent that are not otherwise contained in the durable power of attorney.

VII. An agent, prior to acting in the capacity of agent, may execute and affix to the power of attorney an acknowledgment in substantially the following form:

I, _______________________________________, have read the attached power of attorney and am the person identified as the Agent for the Principal. I hereby acknowledge that when I act as Agent or "attorney in fact," I am given power under this Durable Power of Attorney to make decisions about money, property, or both belonging to the Principal, and to spend the Principal's money, property, or both on the Principal's behalf, in accordance with the terms of this Durable Power of Attorney. This Durable Power of Attorney is valid only if the Principal is of sound mind when the Principal signs it. When acting in the capacity of Agent, I am under a duty (called a "fiduciary duty") to observe the standards observed by a prudent person, which means the use of those powers that is reasonable in view of the interests of the Principal and in view of the way in which a person of ordinary judgment would act in carrying out that person's own affairs. If the exercise of my acts is called into question, the burden will be upon me to prove that I acted under the standards of a fiduciary. As the Agent, I am not entitled to use the money or property for my own benefit or to make gifts to myself or others unless the Durable Power of Attorney specifically gives me the authority to do so. As the Agent, my authority under this Durable Power of Attorney will end when the Principal dies and I will not have authority to manage or dispose of any property or administer the estate unless I am authorized to do so by a New Hampshire Probate Court. If I violate my fiduciary duty under this Durable Power of Attorney, I may be liable for damages and may be subject to criminal prosecution. If there is anything about this Durable Power of Attorney, or my duties under it, that I do not understand, I understand that I should seek professional advice.

VIII. Nothing in paragraphs V-VII of this section shall render ineffective a durable power of attorney validly executed under New Hampshire law.

IX. A durable power of attorney validly executed under the laws of another state or foreign jurisdiction shall be deemed valid under New Hampshire law. Foreign powers of attorney shall be subject to the provisions of RSA 506:7.

257:2 Powers of Attorney; Limitations on the Agent. Amend RSA 506:7, IV to read as follows:

IV.(a) The court may hold hearings, make orders and decrees, and take other actions that are necessary or proper in making determinations on matters presented by a petition filed under paragraph III.

(b) When a gift or transfer made by an agent is challenged in a petition filed under paragraph III of this section, the gift or transfer shall be presumed to be lawful if the durable power of attorney is accompanied by the disclosure statement and acknowledgement drafted in accordance with RSA 506:6, VI and VII, and explicitly authorizes such gifts or transfers. However, if the petitioner establishes that the agent made a transfer for less than adequate consideration, and the transfer is not explicitly authorized by a durable power of attorney drafted in accordance with RSA 506:6, VI and VII, the agent shall be required to prove by a preponderance of evidence that the transfer was authorized and was not a result of undue influence, fraud, or misrepresentation.

II. The remainder of this act shall take effect January 1, 2002.

II. Remainder shall take effect January 1, 2002)