HF 232

2nd Engrossment - 88th Legislature (2013 - 2014) Posted on 04/11/2013 06:00pm

A bill for an act
relating to civil law; modifying the statutory short form power of attorney;
authorizing certain judicial relief; modifying gift transaction amount; amending
Minnesota Statutes 2012, sections 523.20; 523.23, subdivision 1, by adding
subdivisions; 523.24, subdivisions 8, 14; proposing coding for new law in
Minnesota Statutes, chapter 523.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 523.20, is amended to read:

523.20 LIABILITY OF PARTIES REFUSING AUTHORITY OF
ATTORNEY-IN-FACT TO ACT ON PRINCIPAL'S BEHALF.

Any party refusing to accept the authority of an attorney-in-fact to exercise a power
granted by a power of attorney which (1) is executed in conformity with section 523.23
or a form prepared under section 523.231; (2) contains new text begin an acknowledgement that the
attorney-in-fact has read and understood the notice required under section 523.23,
subdivision 1b, and new text end a specimen signature of the attorney-in-fact authorized to act; (3) with
regard to the execution or delivery of any recordable instrument relating to real property, is
accompanied by affidavits that satisfy the provisions of section 523.17; (4) with regard to
any other transaction, is signed by the attorney-in-fact in a manner conforming to section
523.18; and (5) when applicable, is accompanied by an affidavit and any other document
required by section 523.16, is liable to the principal and to the principal's heirs, assigns,
and representative of the estate of the principal in the same manner as the party would be
liable had the party refused to accept the authority of the principal to act on the principal's
own behalf unless: (1) the party has actual notice of the revocation of the power of attorney
prior to the exercise of the power; (2) the duration of the power of attorney specified in the
power of attorney itself has expired; or (3) the party has actual knowledge of the death of
the principal or, if the power of attorney is not a durable power of attorney, actual notice of
a judicial determination that the principal is legally incompetent. This provision does not
negate any liability which a party would have to the principal or to the attorney-in-fact
under any other form of power of attorney under the common law or otherwise.

Sec. 2.

Minnesota Statutes 2012, section 523.23, subdivision 1, is amended to read:

Subdivision 1.

Form.

The following form may be used to create a power of attorney,
and, when used, it must be construed in accordance with sections 523.23 and 523.24 new text begin . The
form must include the notices required under subdivisions 1a and 1b new text end :

STATUTORY SHORT FORM POWER OF ATTORNEY

MINNESOTA STATUTES, SECTION 523.23

deleted text begin IMPORTANT NOTICE: The powers granted by this document are broad and
sweeping. They are defined in Minnesota Statutes, section 523.24. If you have any
questions about these powers, obtain competent advice. This power of attorney may be
revoked by you if you wish to do so. This power of attorney is automatically terminated
if it is to your spouse and proceedings are commenced for dissolution, legal separation,
or annulment of your marriage. This power of attorney authorizes, but does not require,
the attorney-in-fact to act for you.
deleted text end

new text begin Before completing and signing this form, the principal must read and initial the
IMPORTANT NOTICE TO PRINCIPAL. Before acting on behalf of the principal, the
attorney(s)-in-fact must sign this form acknowledging having read and understood the
IMPORTANT NOTICE TO ATTORNEY(S)-IN-FACT.
new text end

PRINCIPAL (Name and Address of Person Granting the Power)

	.
	.
	.

ATTORNEY(S)-IN-FACT		SUCCESSOR ATTORNEY(S)-IN-FACT
(Name and Address)		(Optional) To act if any named attorney-in-fact dies, resigns, or is otherwise unable to serve.
		(Name and Address)
.		First Successor .
.		.
.		.
.		Second Successor .
.		.
.		.
NOTICE: If more than one attorney-in-fact is designated new text begin to act at the same time new text end , make a check or "x" on the line in front of one of the following statements:

... Each attorney-in-fact		EXPIRATION DATE (Optional)
may independently exercise		.	. ,	.
the powers granted.		Use Specific Month	Day	Year Only
... All attorneys-in-fact
must jointly exercise the
powers granted.

I, (the above-named Principal) hereby appoint the above named Attorney(s)-in-Fact to act
as my attorney(s)-in-fact:

FIRST: To act for me in any way that I could act with respect to the following
matters, as each of them is defined in Minnesota Statutes, section 523.24:

(To grant to the attorney-in-fact any of the following powers, make a check or "x" on
the line in front of each power being granted. You may, but need not, cross out each power
not granted. Failure to make a check or "x" on the line in front of the power will have the
effect of deleting the power unless the line in front of the power of (N) is checked or x-ed.)

.	(A)	real property transactions;
		I choose to limit this power to real property in . County, Minnesota, described as follows:
		(Use legal description. Do not use street address.)
		.
		.
		.
		.
		(If more space is needed, continue on the back or on an attachment.)
.	(B)	tangible personal property transactions;
.	(C)	bond, share, and commodity transactions;
.	(D)	banking transactions;
.	(E)	business operating transactions;
.	(F)	insurance transactions;
.	(G)	beneficiary transactions;
.	(H)	gift transactions;
.	(I)	fiduciary transactions;
.	(J)	claims and litigation;
.	(K)	family maintenance;
.	(L)	benefits from military service;
.	(M)	records, reports, and statements;
.	(N)	all of the powers listed in (A) through (M) above and all other matters new text begin , other than medical decisions governed by a health care directive which are governed by Minnesota Statutes, chapter 145C new text end .

SECOND: (You must indicate below whether or not this power of attorney will be
effective if you become incapacitated or incompetent. Make a check or "x" on the line in
front of the statement that expresses your intent.)

.	This power of attorney shall continue to be effective if I become incapacitated or incompetent.
.	This power of attorney shall not be effective if I become incapacitated or incompetent.

deleted text begin THIRD: (You must indicate below whether or not this power of attorney authorizes
the attorney-in-fact to transfer your property to the attorney-in-fact. Make a check or "x"
on the line in front of the statement that expresses your intent.)
deleted text end

deleted text begin . deleted text end	deleted text begin This power of attorney authorizes the attorney-in-fact to transfer my property to the attorney-in-fact. deleted text end
deleted text begin . deleted text end	deleted text begin This power of attorney does not authorize the attorney-in-fact to transfer my property to the attorney-in-fact. deleted text end

new text begin THIRD: My attorney(s)-in-fact MAY NOT make gifts to the attorney(s)-in-fact, or
anyone the attorney(s)-in-fact are legally obligated to support, UNLESS I have made a
check or an "x" on the line in front of the second statement below and I have written in the
name(s) of the attorney(s)-in-fact. The second option allows you to limit the gifting power
to only the attorney(s)-in-fact you name in the statement.
new text end

new text begin Minnesota Statutes, section 523.24, subdivision 8, clause (2), limits the annual
gift(s) made to my attorney(s)-in-fact, or to anyone the attorney(s)-in-fact are legally
obligated to support, to an amount, in the aggregate, that does not exceed the federal
annual gift tax exclusion amount in the year of the gift.
new text end

new text begin . new text end	new text begin I do not authorize any of my attorney(s)-in-fact to make gifts to themselves or to anyone the attorney-in-fact has a legal obligation to support. new text end
new text begin . new text end	new text begin I authorize . (write in name(s)), as my attorney(s)-in-fact, to make gifts to the attorney(s)-in-fact or anyone the attorney(s)-in-fact has a legal obligation to support. new text end

FOURTH: (You may indicate below whether or not the attorney-in-fact is required
to make an accounting. Make a check or "x" on the line in front of the statement that
expresses your intent.)

.	My attorney-in-fact need not render an accounting unless I request it or the accounting is otherwise required by Minnesota Statutes, section 523.21.

.	My attorney-in-fact must render .
		(Monthly, Quarterly, Annual)
	accountings to me or .
		(Name and Address)
	during my lifetime, and a final accounting to the personal representative of my estate, if any is appointed, after my death.

In Witness Whereof I have hereunto signed my name this . day of . ,
.

	.
	(Signature of Principal)
(Acknowledgment of Principal)

STATE OF MINNESOTA	)
	) ss.
COUNTY OF	)

The foregoing instrument was acknowledged before me this ..... day of .........., ........,
by .
(Insert Name of Principal)
		.
		(Signature of Notary Public or other Official)
new text begin Acknowledgement of notice to attorney(s)-in-fact and specimen signature of attorney(s)-in-fact. new text end
new text begin By signing below, I acknowledge I have read and understand the IMPORTANT NOTICE TO ATTORNEY(S)-IN-FACT required by Minnesota Statutes, section 523.23, subdivision 1b, and understand and accept the scope of any limitations to the powers and duties delegated to me by this instrument. new text end
		new text begin (Notarization not required) new text end
		.
		.
This instrument was drafted by:		Specimen Signature of Attorney(s)-in-Fact
		(Notarization not required)
.		.
.		.
.		.
.		.

Sec. 3.

Minnesota Statutes 2012, section 523.23, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Notice to principal. new text end

new text begin The following verbatim notice must be included as
part of this statutory short form power of attorney:
new text end

new text begin STATUTORY SHORT FORM POWER OF ATTORNEY
new text end

new text begin MINNESOTA STATUTES, SECTION 523.23
new text end

new text begin IMPORTANT NOTICE TO THE PRINCIPAL
new text end

new text begin READ THIS NOTICE CAREFULLY. The power of attorney form that you will be
signing is a legal document. It is governed by Minnesota Statutes, chapter 523. If there is
anything about this form that you do not understand, you should seek legal advice.
new text end

new text begin PURPOSE: The purpose of the power of attorney is for you, the principal, to give
broad and sweeping powers to your attorney(s)-in-fact, who is the person you designate to
handle your financial affairs. Any action taken by your attorney(s)-in-fact pursuant to the
powers you designate in this power of attorney form binds you, your heirs and assigns, and
the representative of your estate in the same manner as though you took the action yourself.
new text end

new text begin POWERS GIVEN: You will be granting the attorney(s)-in-fact power to enter into
transactions relating to any of your real or personal property, even without your consent or
any advance notice to you. The powers granted to the attorney(s)-in-fact are broad and
not supervised. THIS POWER OF ATTORNEY DOES NOT GRANT ANY POWERS
TO MAKE MEDICAL DECISIONS FOR YOU. TO GIVE SOMEONE THOSE
POWERS, YOU MUST USE A HEALTH CARE DIRECTIVE THAT COMPLIES WITH
MINNESOTA STATUTES, CHAPTER 145C.
new text end

new text begin DUTIES OF YOUR ATTORNEY(S)-IN-FACT: Your attorney(s)-in-fact must
keep complete records of all transactions entered into on your behalf. You may request
that your attorney(s)-in-fact provide you or someone else that you designate a periodic
accounting, which is a written statement that gives reasonable notice of all transactions
entered into on your behalf. Your attorney(s)-in-fact must also render an accounting if the
attorney(s)-in-fact reimburses himself or herself for any expenditure made on behalf of you.
new text end

new text begin An attorney-in-fact is personally liable to any person, including you, who is injured
by an action taken by the attorney-in-fact in bad faith under the power of attorney or by
the failure of an attorney-in-fact to account when the attorney-in-fact has a duty to account
under this section. The attorney(s)-in-fact must act with your interests utmost in mind.
new text end

new text begin TERMINATION: If you choose, your attorney(s)-in-fact may exercise these powers
throughout your lifetime, both before and after you become incapacitated. However, a
court can take away the powers of your attorney(s)-in-fact because of improper acts.
You may also revoke this power of attorney if you wish. This power of attorney is
automatically terminated if the power is granted to your spouse and proceedings are
commenced for dissolution, legal separation, or annulment of your marriage.
new text end

new text begin This power of attorney authorizes, but does not require, the attorney(s)-in-fact to
act for you. You are not required to sign this power of attorney, but it will not take effect
without your signature. You should not sign this power of attorney if you do not understand
everything in it, and what your attorney(s)-in-fact will be able to do if you do sign it.
new text end

new text begin Please place your initials on the following line indicating you have read this
IMPORTANT NOTICE TO THE PRINCIPAL: .......
new text end

Sec. 4.

Minnesota Statutes 2012, section 523.23, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Notice to attorney(s)-in-fact. new text end

new text begin The following verbatim notice must be
included as a part of this statutory short form power of attorney:
new text end

new text begin STATUTORY SHORT FORM POWER OF ATTORNEY
new text end

new text begin MINNESOTA STATUTES, SECTION 523.23
new text end

new text begin IMPORTANT NOTICE TO THE ATTORNEY(S)-IN-FACT
new text end

new text begin (This notice is incorporated by reference and is included as part of the statutory short
form power of attorney.)
new text end

new text begin You have been nominated by the principal to act as attorney-in-fact. You are under
no duty to exercise the authority granted by the power of attorney. However, when you do
exercise any power conferred by the power of attorney, you must:
new text end

new text begin (1) act with the interests of the principal utmost in mind;
new text end

new text begin (2) exercise the power in the same manner as an ordinarily prudent person of
discretion and intelligence would exercise in the management of the person's own affairs;
new text end

new text begin (3) render accountings as directed by the principal or whenever you reimburse
yourself for expenditures made on behalf of the principal;
new text end

new text begin (4) act in good faith for the best interests of the principal, using due care,
competence, and diligence;
new text end

new text begin (5) cease acting on behalf of the principal if you learn of any event that terminates
this power of attorney or terminates your authority under this power of attorney, such
as revocation by the principal of the power of attorney, the death of the principal, or
the commencement of proceedings for dissolution, separation, or annulment of your
marriage to the principal;
new text end

new text begin (6) disclose your identity as an attorney-in-fact whenever you act for the principal
by signing in substantially the following manner:
new text end

new text begin Signature by a person as "attorney-in-fact for (name of the principal)" or "(name of
the principal) by (name of the attorney-in-fact) the principal's attorney-in-fact"
new text end

new text begin (7) acknowledge you have read and understood this IMPORTANT NOTICE TO
THE ATTORNEY(S)-IN-FACT by signing the power of attorney form.
new text end

new text begin You are personally liable to any person, including the principal, who is injured by
an action taken by you in bad faith under the power of attorney or by your failure to
account when the duty to account has arisen.
new text end

new text begin The meaning of the powers granted to you is contained in Minnesota Statutes,
chapter 523. If there is anything about this document or your duties that you do not
understand, you should seek legal advice from an attorney.
new text end

Sec. 5.

Minnesota Statutes 2012, section 523.24, subdivision 8, is amended to read:

Subd. 8.

Gift transactions.

In the statutory short form power of attorney, the
language conferring general authority with respect to gift transactions, means that the
principal authorizes the attorney-in-fact:

(1) to make gifts to organizations, whether charitable or otherwise, to which the
principal has made gifts, and to satisfy pledges made to organizations by the principal;

(2) to make gifts on behalf of the principal to the principal's spouse, children, and
other descendants or the spouse of any child or other descendant, and, if authorized by
the principal in part Third, to the attorney-in-fact, either outright or in trust, for purposes
which the attorney-in-fact deems to be in the best interest of the principal, specifically
including minimization of income, estate, inheritance, or gift taxes, provided that,
notwithstanding that the principal in part Third may have authorized the attorney-in-fact
to transfer the principal's property to the attorney-in-fact, no attorney-in-fact nor anyone
the attorney-in-fact has a legal obligation to support may be the recipient of any gifts in
any one calendar year which, in the aggregate, exceed deleted text begin $10,000 in value deleted text end new text begin the federal annual
gift tax exclusion amount in the year of the gift new text end deleted text begin to each recipient deleted text end ;

(3) to prepare, execute, consent to on behalf of the principal, and file any return,
report, declaration, or other document required by the laws of the United States, any state
or subdivision of a state, or any foreign government, which the attorney-in-fact deems to be
desirable or necessary with respect to any gift made under the authority of this subdivision;

(4) to execute, acknowledge, seal, and deliver any deed, assignment, agreement,
authorization, check, or other instrument which the attorney-in-fact deems useful for the
accomplishment of any of the purposes enumerated in this subdivision;

(5) to prosecute, defend, submit to arbitration, settle, and propose or accept a
compromise with respect to any claim existing in favor of or against the principal based
on or involving any gift transaction or to intervene in any related action or proceeding;

(6) to hire, discharge, and compensate any attorney, accountant, expert witness, or
other assistant when the attorney-in-fact deems that action to be desirable for the proper
execution by the attorney-in-fact of any of the powers described in this subdivision, and
for the keeping of needed records; and

(7) in general, and in addition to but not in contravention of all the specific acts
listed in this subdivision, to do any other acts which the attorney-in-fact deems desirable
or necessary to complete any gift on behalf of the principal.

All powers described in this subdivision are exercisable equally with respect to a gift
of any property in which the principal is interested at the giving of the power of attorney
or becomes interested after that time, and whether located in the state of Minnesota or
elsewhere.

Sec. 6.

Minnesota Statutes 2012, section 523.24, subdivision 14, is amended to read:

Subd. 14.

All other matters.

In a statutory short form power of attorney, the
language conferring general authority with respect to all other matters, means that the
principal authorizes the attorney-in-fact to act as an alter ego of the principal with respect
to any and all possible matters deleted text begin and affairs affecting property owned by deleted text end new text begin affecting the affairs
of new text end the principal which are not enumerated in subdivisions 1 to 13, and which the principal
can do through an agent. new text begin The language conferring general authority does not include any
powers to make medical decisions for the principal.
new text end

Sec. 7.

new text begin [523.26] JUDICIAL RELIEF.
new text end

new text begin The principal or any interested person, as defined in section 524.5-102, subdivision
7, may petition the court for a protective order directing the attorney(s)-in-fact to provide
an accounting, on a schedule directed by the court, or for any other relief as provided in
sections 524.5-401 to 524.5-502. The principal or a person named by the principal in the
power of attorney to receive accountings is entitled to recover reasonable attorney fees
and costs if the court finds that the attorney(s)-in-fact failed to render an accounting to the
principal or any person named by the principal in the power of attorney form to receive
accountings after the duty to render an accounting arose.
new text end

Sec. 8. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 6 are effective August 1, 2013, and apply to powers of attorney
executed on or after January 1, 2014. Section 7 is effective August 1, 2013, and applies
to powers of attorney executed before, on, or after that date. Nothing shall invalidate or
impair any power of attorney executed before the effective date.
new text end