Power of attorney

A power of attorney is a written document in which one person, the principal, gives another person, the agent, authority to handle property and financial matters. In Kentucky these documents are governed by the Uniform Power of Attorney Act, KRS Chapter 457.

Durable powers, signing and effective date

“Durable” means the document keeps working if the principal becomes unable to manage property or business affairs. A Kentucky power of attorney is durable unless it says otherwise.

The principal must sign the document, or direct another person to sign in the principal’s conscious presence. The statute does not require witnesses. A signature acknowledged before a notary public is presumed genuine, and banks and others may rely on that presumption.

A power of attorney takes effect when signed unless it names a later date or event, such as the principal’s incapacity. The document may name a person to decide when that event has occurred.

The agent’s duties

Whatever the document says, an agent who accepts the role must:

• Act according to the principal’s reasonable expectations if they are known, and otherwise in the principal’s best interest.
• Act in good faith.
• Act only within the authority the document grants.

Unless the document provides otherwise, the agent must also act loyally, avoid conflicts of interest, use reasonable care, and keep a record of all receipts, payments and transactions. An agent who violates these rules must restore the value of the principal’s property. The District Court can review an agent’s conduct.

How it ends

A power of attorney ends when the principal dies or revokes it, when its purpose is accomplished, or when a court appoints a guardian or conservator for the principal’s estate, unless the court orders otherwise. An agent’s authority also ends if a divorce or legal separation action is filed between the agent and the principal, unless the document says otherwise.

Health care decisions and misuse

Medical decisions are handled in a separate document. Under the Kentucky Living Will Directive Act, an adult who can make health care decisions may sign a living will directive that names a health care surrogate and gives instructions about life-prolonging treatment. It must be written, dated, signed, and either witnessed by two adults or notarized.

A power of attorney does not make it legal for an agent to take the principal’s property for personal use, which can be prosecuted as theft. Knowingly exploiting an adult who cannot manage his or her own resources because of a mental or physical condition is a Class C felony if the loss exceeds $300. Suspected exploitation of such an adult must be reported to the Cabinet for Health and Family Services.