The South Carolina Uniform Power of Attorney Act New Rules of the Road for Powers of Attorney in South Carolina, 0517 SCBJ, SC Lawyer, May 2017, #37

Author:Donna Sands and Freddy Faircloth, J.
 
FREE EXCERPT

The South Carolina Uniform Power of Attorney Act

Vol. 28 Issue 6 Pg. 37

South Carolina BAR Journal

May, 2017

New Rules of the Road for Powers of Attorney in South Carolina

Donna Sands and Freddy Faircloth, J.

Since 1969, when the Uniform Probate Code was first introduced, powers of attorney have become ubiquitous as a surrogate decision-making tool to avoid expensive and time-consuming guardianship or conservatorship proceedings in situations where there otherwise is no reason to seek a court-appointed guardian or conservator. Over time every state in the country adopted some form of power of attorney law, which led to portability and acceptance issues as shown in a nationwide study performed by the Uniform Law Commission (ULC).

The responses to this national study “demonstrated a high degree of consensus about the need to improve portability and acceptance of powers of attorney as well as the need to better protect incapacitated individuals.”1 As a result in 2006 the ULC promulgated the Uniform Power of Attorney Act (UPOAA).

In June 2016 Gov. Nikki Haley signed into law the new South Carolina Uniform Power of Attorney Act (SCUPOAA),2 making the Palmetto State the 21st state to enact UPOAA. The SCUPOAA became effective on January 1, 2017, and governs powers of attorney executed on or after that date. This article provides an overview of this new act, with particular attention to the duties of an agent and the powers that can be granted to an agent under a power of attorney.

Overview of the SCUPOAA

With some minor modifications, the SCUPOAA follows the structure of the UPOAA, except that it does not adopt the optional form power of attorney in UPOAA § 301.3 Part 1 of the SCUPOAA includes definitions and general provisions. Part 2 sets forth powers that may be granted only by specific reference in a power of attorney and also provides other default powers that may be incorporated b y reference and/or adjusted by the drafter to meet specific needs. Part 4 includes miscellaneous provisions related to the effective date of the SCUPOAA and jurisdiction over powers of attorney. Part 3 is reserved for future use; in the UPOAA Article 3 provided an optional form power of attorney not adopted by the SCUPOAA as well as a form agent certification found at Section 119(f)4 of the SCUPOAA.

Part 1 – General Provisions and Definitions

Part 1 of the SCUPOAA covers a broad range of topics, from what constitutes a power of attorney, to an agent’s duties, to procedures for accepting or rejecting a power of attorney. The new SCUPOAA adds significant structure to South Carolina’s laws regarding powers of attorney, including some statutory default conditions that are the exact opposite of prior law. Many of these rules focus on creating broader acceptance of powers of attorney while at the same time seeking to protect vulnerable individuals from financial abuse.

Section 102 introduces several new terms into the power of attorney lexicon. As an initial matter, the term “agent” is introduced in lieu of “attorney in fact” to avoid confusion between an attorney in fact and an attorney at law.5 Similarly, the term “incapacity” is introduced in place of disability, recognizing that many individuals who have a disability are fully capable of managing their own property or business affairs. Incapacity also is broken into two parts, one dealing with a lack of cognitive ability and the other dealing with “absence” for specified reasons.

Under Section 104, a power of attorney is durable unless otherwise expressly provided in the power of attorney. This reverses the presumption against durability under prior South Carolina law. While durability is now the presumption in South Carolina, the same is not true in every jurisdiction. Therefore, the prudent drafter may still want to expressly indicate that a power of attorney is durable.6

Section 105 retains the requirement that powers of attorney be executed with the same formalities as a will and either acknowledged before a notary or attested by one of the witnesses in the presence of a notary. Section 106 bootstraps onto this execution requirement by providing that a power of attorney executed on or after January 1, 2017, that complies with Section 105 is effective. On a more practical level, Section 106 provides that absent some other statutory requirement, photocopies or electronic copies of powers of attorney are as effective as an original.

Section 108 provides that a principal may, in a power of attorney, nominate a conservator or guardian (likely the agent) if a protective proceeding is begun after the execution of the power of attorney. It is important to note that the nomination in the power of attorney must be made prior to the commencement of such proceedings. If such a nomination is made, the court is required to follow it absent good cause shown. Unless the power of attorney provides otherwise, the appointment of a conservator or guardian terminates the agent’s authority as to the authority that is granted to the guardian or conservator. If the power of attorney provides otherwise, an agent who retains his or her power becomes accountable to the conservator or guardian, as well as the principal. One of the purposes of this new default provision is to dissuade guardianship petitions brought solely to frustrate the agent’s authority. An attorney who is drafting a power of attorney should consider carefully whether to include language in the document providing that the appointment of a guardian or conservator will not terminate the agent’s authority.

Section 109 provides that a power of attorney generally is effective upon execution unless the power of attorney indicates a later effective date or a contingency that must precede effectiveness (primarily incapacity).7 Where there is a contingency related to effectiveness, the power of attorney can grant one or more individuals the authority to determine if the contingency is met. If effectiveness is contingent upon incapacity and no individual has been granted authority to make a determination about incapacity (or the...

To continue reading

FREE SIGN UP