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Modern day estate planners, in dealing with an aging population, have to face the very real challenge of dealing with incapacity issues - whether related to property and financial transactions or to health care decision-making. With regard to property and financial transactions, the "durable" power an agency relationship that does not terminate on the incapacity of the principal) has become a standard estate planning document. Statutes in every state authorize the creation of a durable power, with some states opting for the Uniform Law Commission's Uniform Power of Attorney Act as their model.
The appellate case law that is emerging dealing with the durable powers is likely to focus on the scope of the powers granted under the written durable power and, in an increasing number of cases, the scope of the gift-giving power given to the agent. As might be expected, cases in which the agent uses the power to benefit the agent personally will be scrutinized very carefully by the courts. Recent cases from Vermont and Mississippi illustrate the perils involved in the use of durable powers of attorney.
The case of In re Estate of Kurrelmeyer, which resulted in two appeals to the Supreme Court of Vermont, is a classic illustration of the...