By Bill Stalter
been contacted by a family that wants to transfer their
mother’s preneed contract to our funeral home. The
mother is in a nursing home that has confirmed she cannot
make her own decisions. A daughter has power of
attorney and the original funeral home is challenging her
authority to transfer the preneed contract.
If the funeral home is challenging the power of attorney rather than the consumer’s rights under state law, I am assuming applicable law allows the contract and its funding to be transferred. If that assumption is accurate, the daughter’s authority to transfer the preneed contract will depend upon whether the power of attorney is durable and grants general powers to the daughter.
A power of attorney is either durable or non-durable. A non-durable power of attorney remains effective only for so long as the principal is legally competent. A durable power of attorney remains effective after the principal is deemed legally incompetent. State laws determine what a power of attorney form must include so that it will be treated as durable. A durable POA is intended to allow the agent to conduct the principal’s financial affairs when such assistance is needed most.
Applicable state law also sets out the general powers that can be given through a POA. But, an individual can restrict or limit the authorities given the agent. Consequently, every third party, such as the original funeral home, must review the POA for purposes of determining what authorities were given the agent. A third party should never assume a power of attorney provides the agent the authority to transaction all financial matters on behalf of the principal. POA forms intended to grant general financial powers will typically mimic the applicable state law provision.
Accordingly, you will need to review the mother’s POA and applicable state law to determine that the POA is 1) durable, and 2) grants the daughter general financial powers.
Bill Stalter answers our questions for educational purposes only. It is The Dead Beat’s intent to give the reader general information about legal issues, not to provide legal advice. If a reader needs legal advice, he or she should hire an attorney. Reading The Dead Beat should not be used as a substitute for legal advice from an attorney. When Bill provides legal advice he does so for Stalter Legal Services in Overland Park, Kansas. Bill also provides consulting services through Preneed Resource Consultants, which can be found at www.preneedresource.com.
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