Agency & RLT

Question 1

What is least fiduciary account?

Answer 1

Custodial.

Question 2

General Power of Attorney

Answer 2

-Grants broad authority to act on behalf of principal in financial transactions
-Does not enable attorney in fact to act in place of the Grantor of a trust unless specifically stated in the power of attorney

Question 3

Limited Power of Attorney

Answer 3

-Grants limited authority to act on behalf of principal, usually with regard to a specific issue or issues (e.g. funding of a trust, signing specific legal documents, etc.)

Question 4

Durable Power of Attorney

Answer 4

-Enables power to survive incapacity of the principal
-e.g. “this power shall be unaffected by the disability of the principal”
-Subject to local law but the default rule in Uniform Power of Appointment Act Section 104 is that a power of attorney is durable unless it contains express language indicating otherwise

Question 5

Springing Power of Attorney

Answer 5

This durable power is activated (“springs” into being) at the incapacity of the principal or the occurrence of some other defined event

Question 6

Health or Medical Power of Attorney

Answer 6

-Enables power holder to make medical decisions for principal
-Generally has broader scope than a Living Will or healthcare directive and allows for response to changing conditions
-Consider HIPAA

Question 7

Joint Power of Attorney

Answer 7

Grants power to two or more parties to be exercised either by one alone, or jointly, as stated in document

Question 8

Financial POA can:

Answer 8

-File taxes
-Make investments
-Buy or sell a property
-Cash checks
-Make gifts to people or charities
-Buy or sell a vehicle
-Refinance a mortgage
-Apply for public benefits on the principal’s behalf
-Access safe deposit boxes

Question 9

Financial POA cannot:

Answer 9

-Perform a personal services contract
-File for legal separation/divorce from a spouse
-Transfer the power of attorney to someone else
-Vote on behalf of the principal in an election
-Make decisions once the principal is deceased
-Change or override a last will and testament

Question 10

Definition: Self-Settled Trust

Answer 10

-A trust created by and funded by an individual with their own assets of which they are also a beneficiary (Grantor Trust)
-Virtually all RLTs are self settled
-Some irrevocable trusts are self settled (asset protection trust, first party special needs trust)

Question 11

Medical POA can:

Answer 11

-Choose medical treatment
-Decide where the principal lives
-Pick who treats and bathes the principal (e.g. which doctors or nurses)
-Select what the principal eats

Question 12

Medical POA cannot:

Answer 12

Make decisions against their end of life treatment wishes described in their living will