Karen E. Boxx, The Durable Power of Attorney's Place in the Family of Fiduciary Relationships, 36 Ga. L. Rev. 1 (2001), https://digitalcommons.law.uw.edu/faculty-articles/178
Georgia Law Revew
durable power of attorney, fiduciaries
The durable power of attorney is a deceptively simple document that allows one person to handle the affairs of an incapacitated person without court supervision. It is merely an agency relationship, established by a written document, that continues during the principal's incapacity. The durable power of attorney has been in widespread use only for about twenty-five years. It is very easy to draft, and its use escapes most court proceedings or even much need for legal assistance.
The durable power of attorney has therefore kept a low profile until now, and any attention it is now receiving focuses primarily on abuse of the document, an admittedly rare occurrence. However, the durable power of attorney has become extremely widespread as an aging population faces increasing likelihood of periods of disability and as life becomes more complicated, requiring more formal arrangements to handle one's financial affairs.
This quiet little document creates a unique fiduciary relationship that is overdue for analysis. That analysis can begin to identify and answer the many open questions about the nature of the relationship and the scope of duties of an attorney-in-fact. Analysis of the durable power of attorney can also shed light on the broader question that has been open for centuries and is still vigorously debated: what is the nature of a fiduciary?
The status of fiduciary is a well-recognized legal concept with a long history, but nevertheless retains considerable ambiguity and confusion in application. There are certain discrete categories of fiduciaries—trustees, guardians, agents, executors—with corresponding discrete lists of rights, duties, and remedies for breach of duties. Courts have sometimes expanded the role of a fiduciary beyond the traditional categories when circumstances indicate that a person's relationship with another should impose a higher duty. Examples of such relationships include priest or minister-parishioner, employee-employer, insurance broker-insured, stockbroker-power client and school-student. However, when expanding the definition of fiduciary, courts have adapted the consequences of that characterization to fit the particular situation.
The result is now a patchwork, where the traditional categories are surrounded by situational fiduciaries that borrow from an assortment of the established rules to define the scope of that particular fiduciary's duties. Part II of this Article will describe the evolution of the durable power of attorney. Part III will summarize general fiduciary principles and their application in both traditional fiduciary roles and fact-based fiduciary settings. The precise nature of the fiduciary relationship is subject to considerable debate; that debate is also described in Part III.
Part IV discusses how the durable power of attorney, a example of a fiduciary relationship not previously considered in the theoretical debate, illuminates the general discussion. Finally, Part V applies fiduciary principles to the durable power of attorney and points out the numerous ambiguities regarding the attorney-in-fact's duties. This section then makes recommendations to clarify the scope of those duties in order to serve purposes of both curbing abuse of powers of attorney and making them more useful.