Bill Summary for S 569 (2017-2018)

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Summary date: 

Mar 31 2017

Bill Information:

View NCGA Bill Details2017-2018 Session
Senate Bill 569 (Public) Filed Thursday, March 30, 2017
Intro. by Daniel, Newton.

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Bill summary

Part 1 enacts new GS Chapter 32C (NC Uniform Power of Attorney Act).

Article 1 (Definitions and General Provisions).

Defines 16 terms as they are used in the Chapter, including principal (an individual granting a power of attorney) and agent (a person granted authority to act for the principal under a power of attorney).

Applies to all powers of attorney (POAs) except (1) a power coupled with an interest in the subject of the power, including a power given to or for the benefit of a creditor in connection with a credit transaction, (2) health care power, (3) voting or management proxies with respect to a legal or commercial entity, and (4) power created on forms prescribed by a government for a governmental purpose.

Provides that POAs under this Chapter do not expire upon the incapacity of the principal, unless otherwise stated in the POA.

Provides that POAs must be signed by the principal, or at the principaläó»s direction in the presence of the principal, and acknowledged.

Provides POAs executed in this State on or after the effective date of this act are valid if they comply with this act, and that POAs executed before the effective date of this act are valid if they comply with the law as it existed at the time of execution.

Provides that the meaning and effect of POAs are determined by the law of the jurisdiction indicated on the POA, or in the absence of that indication, the law of the jurisdiction where the POA was executed.

Directs the clerk of superior court, in a protective proceeding for the principaläó»s estate or person after the execution of a POA to nominate a guardian in accordance with a POA, except for good cause shown or disqualification, with preference given to the guardian in a healthcare POA over other POAs. Makes the agent under a POA accountable to a court-appointed guardian or fiduciary, as well as to the principal.

Provides that a POA is effective when executed, unless the POA directs otherwise. The POA may authorize one or more persons to determine in a record that a contingent event making POA effective has occurred. In the absence of a person authorized to determine the principal's incapacity, or the unwillingness of the authorized person to do so, the POA is effective upon a written determination of incapacitation bytwo physicians that personally examine the principal, or by an attorney-at-law, judge, or other appropriate government official. Authorizes a person designated by the principal to determine the principaläó»s incapacity to act as the principaläó»s personal representative under the Health Insurance Portability and Accountability Act., to obtain access to the principaläó»s health care information, and communicate with the principaläó»s healthcare provider.

Provides that POAs terminate in seven listed circumstances, including the death of the principal. Provides for the termination of an agentäó»s authority in five listed circumstances, including written revocation by the principal. Provides that an agentäó»s authority lasts until it is terminated under this chapter, notwithstanding a lapse of time since the execution of the POA. Provides that an agentäó»s good-faith actions, without knowledge of a termination, are binding on the principal. Provides that subsequent POAs do not revoke prior POAs, unless the subsequent POA provides that the prior POA is revoked. Provides methods for the revocation of POAs that have been registered with the Register of Deeds, as well as those not registered.

Authorizes a principal to designate more than one agent to act as coagents, either jointly or independently. Authorizes a principal to designate one or more successor agents to act upon the resignation, death, incapacity, disqualification, or refusal of an agent. Authorizes the principal to grant authority to a person to designate a successor agent. Provides that the successor agent has the same authority as the original agent, and may not act until all predecessor agents have resigned and so forth unless the POA provides otherwise.

Provides for reasonable compensation for an agent, as determined by the clerk of superior court if not already specified in the POA and the principal becomes incapacitated, and for reimbursement for properly incurred expenses on behalf of the principal.

Unless otherwise provided in the POA, an agent accepts their appointment by exercising authority as an agent, or by any other assertion or conduct indicating acceptance.

Requires agents to act in accordance with the principaläó»s reasonable expectations to the extent actually known by the agent, and in the principaläó»s best interest, act in good faith, and act only within the scope of authority granted in the POA. Provides that an agent has no affirmative duty to exercise authority, unless otherwise provided in the POA, but requires the agent in doing so to (1) act loyally for the principaläó»s benefit; (2) not create a conflict of interest between the agent and the principal; (3) act with an agentäó»s care, competence, and diligence; (4) keep records; (5) cooperate with the healthcare power of attorney to make health care decisions for the principal and act in the principaläó»s best interest; and (6) attempt to preserve the principaläó»s estate plan, if consistent with the principaläó»s best interest. Shields good-faith agents from various forms of liability. Makes good faith acts in the best interest of the principal not voidable solely because the agent also benefits from the act or has an individual or conflicting interest. Provides that an agent is not required to disclose receipts, disbursements, or transactions, except as otherwise provided in the POA, or as ordered by a court or requested by the principal or the principaläó»s guardian, representative, or successor in interest.

POA provisions relieving an agent of liability for breach of duty are binding on the principal except to the extent the provision relieves the agent of liability for bad faith or reckless indifference to the purposes of the POA or best interest of the principal.

Provides clerks of superior court with original jurisdiction of proceedings under this Chapter. Jurisdiction is exclusive except for over proceedings to determine an agentäó»s authority and powers, to construe the terms of a POA, and to determine any question arising in the agentäó»s exercise of powers and authority, which may be transferred from the clerk to the superior court. Provides that the clerk of superior court does not have jurisdiction over actions (1) to modify or amend a POA; (2) by or against creditors or debtors of an agent or principal; (3) involving claims for monetary damages; (4) to set aside a POA for undue influence or lack of capacity; or (5) for the recovery of property transferred or conveyed by an agent on behalf of a principal with intent to hinder, delay, or defraud the principaläó»s creditors. Provides for the commencement of proceedings, and authorizes five listed parties to do so. Provides for the venue for proceedings under this Chapter. Directs the clerk of superior court to dismiss a petition at the motion of a principal, unless the principal is incapacitated. Provides for the appeal of a clerkäó»s order.

Provides that violation by an agent of this Chapter is a breach of fiduciary duty. Authorizes a court to order any appropriate relief to remedy a breach of fiduciary duty that has occurred or may occur, including an injunction against the agent from committing the breach, and removing the agent. Authorizes a court to relieve or excuse an agent from liability for breach of fiduciary duty for cause shown, or for acting honestly and reasonably. Makes agents who commit a breach of fiduciary duty under a POA liable for the amount required to restore the value of the property subject to the POA and distributions from that property, or the profit of the agent made by reason of the breach, whichever is greater. Provides for contribution for liability shared between multiple agents. Makes an agent accountable for any profit made by the agent arising from dealings with property subject to the POA, even absent a breach of fiduciary duty.

Provides for the method of resignation of agents, absent a provision in the POA to the contrary.

Provides that a person who accepts in good faith a POA without actual knowledge that the POA or agentäó»s authority is void, invalid, or terminated, or that the agent is exceeding authority, may rely on the POA as if it and the agentäó»s authority were genuine, valid, and in effect, and the agent had not exceeded authority, and will not be held responsible for any breach of fiduciary duty by the agent. Authorizes a person asked to accept a POA to request and rely upon (1) a certification executed by the agent that, to the best of the agentäó»s knowledge, the POA and agentäó»s authority are not void, invalid, or terminated; (2) an English translation of a POA containing a language other than English; or (3) an opinion of counsel as to any matter of law concerning the POA, if the person making the request provides in a record the reason for the request. Provides for paying the cost of an English translation. Specifies that a person conducting activities through employees is without knowledge of facts relating to a POA.

Provides that a person is not required to accept, and is not liable for not accepting, a POA that is not verified by a public notary or other authorized person. Directs a person presented with a POA verified by public notary to accept, refuse to accept, or request certification, translation, or an opinion of counsel on the POA within seven business days. If a person requests certification, translation, or an opinion of counsel, the person must accept or refuse to accept the POA within five business days of receipt of the requested items in reasonably satisfactory form. Provides that a person is not required to accept a POA verified by public notary in nine listed circumstances, including when the person is not otherwise required to engage in a transaction with the principal in the same circumstances, or when the person in good faith believes that the POA or agentäó»s authority is not valid, whether or not a certification, translation, or opinion of counsel has been requested or provided. Provides that a person is never required to open an account for a principal at the request of an agent if the principal is not currently the personäó»s customer, make a loan to the principal at the request of an agent, or permit an agent to conduct business not authorized by the POA. Subjects a person who refuses to accept a POA verified by public notary to any available remedy under applicable law.

Article 2 (Authority).

Provides that, unless the exercise of the authority by an agent under a POA is not otherwise prohibited by another agreement or instrument to which the authority or property is subject, then the agent may not perform nine specified actions, including making a gift or creating or changing rights of survivorship, without an express grant of authority. Provides that an agent may petition the court for authority to do these acts absent an express grant of authority. Provides that an agent granted such authority may only act as consistent with the principaläó»s objectives and the principaläó»s best interest. Prohibits agents from creating in the agent, or an individual to whom the agent owes a legal obligation of support, an interest in the principaläó»s property.

Provides lists of actions an agent is authorized to take, unless otherwise provided in a POA, when a POA grants the agent general authority with respect to the following properties, interests, rights, and affairs: real property, tangible personal property, stocks and bonds, commodities and options, banks and other financial institutions, operation of an entity, insurance and annuities, estates, trusts, and other beneficial interests, claims and litigation, personal and family maintenance, benefits from governmental programs or civil or military service, retirement plans, taxes, gifts by general authority, and digital assets. Provides that an agentäó»s authority, notwithstanding the listed authorized actions, is subject to the restrictions in this Article. Allows an agent to petition the court for an order authorizing the agent to make a gift of the principaläó»s property.

Article 3 (Statutory Forms).

Provides a form that may be used to create a POA that has the meaning and effect prescribed by this Chapter.

Provides a form that may be used by an agent to certify facts concerning a POA.

Provides a form that may be used to create a limited POA for transactions involving the purchase, sale, or financing of designated real property or tangible personal property related to the designated real property.

Article 4 (Miscellaneous Provisions).

Directs parties construing this Chapter to consider the need to promote uniformity of the law with respect to its subject matter among the enacting states in doing so.

Provides that the Chapter conforms with the requirements of the Electronic Signatures in Global and National Commerce Act, and supersede, modify, and limit the requirements of that act.

This Chapter applies to a POA created before, on, or after the effective date of this Chapter unless there is clear indication of contrary intent in the POA, or unless application would substantially impair the rights of a party. Applies to judicial proceedings concerning a POA commenced on or after the effective date of this Chapter. Applies to judicial proceedings concerning a POA commenced before the effective date of this Chapter unless the court finds that application of a provision would substantially interfere with the effective conduct of the judicial proceeding or prejudice the rights of a party, in which case the particular provision does not apply, and the superseded law applies. Does not affect rights acquired, extinguished, or banned upon the expiration of a prescribed period that commenced under law of this State other than this Chapter before the effective date of this Chapter. Provides for the continued validity of Statutory Short Form POAs created prior to January 1, 2018.

Part 2 makes technical and conforming changes to GS 30-3.4, GS 47-28, GS 47-43.1, GS 50-22, GS 90-21.13, GS 90-322, and GS 122C-73, and further amends GS 47-43.1 to delete the requirement that a POA be executed under seal for an instrument executed by an agent to be executed under seal.

Repeals GS Chapter 32A, Articles 1 (Statutory Short Form Power of Attorney), 2 (Durable Power of Attorney), 2A (Authority of Attorney-in-Fact to Make Gifts and to Renounce), 2B (Gifts Authorized by Court Order), and 5 (Enforcement of Power of Attorney).

Effective January 1, 2018. Directs the Revisor of Statutes to print all relevant portions of the Official Comments to the Uniform Power of Attorney Act and explanatory comments of the drafters as the Revisor deems appropriate.