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A look at Kentucky’s new Power of Attorney statutes

Kentucky’s Power of Attorney (“POA”) laws just received an update. Effective July 14, 2018, Kentucky adopted portions of the Uniform Power of Attorney Act (2006) drafted by the Uniform Law Commission (“ULC”). Even though Kentucky did not adopt Articles 2 or 3 of the uniform act (which address specific powers granted to the agent and a sample form), the new statutes will provide much needed clarity in replacing our previously sparse statutes.

Generally speaking, a POA is an instrument by which a person (called, the principal) designates another (called, the agent or attorney-in-fact) to deal with the principal’s property and act on the principal’s behalf, either out of necessity or mere convenience. Often, a POA will be designated as “durable,” meaning it remains in effect even after the principal loses the capacity to manage his or her property.

POAs are governed by state law, which can mean that a single instrument can be interpreted in very different ways from one state to the next. The ULC has promoted the adoption of a uniform law across the country in an effort to reduce these potential inconsistencies for principals who move from one state to another or own property in multiple states. According to the ULC, Kentucky will join 26 other states that have already adopted portions of the uniform law, meaning a POA drafted to comply with the new Kentucky law should be interpreted similarly in a majority of states.

Kentucky’s new statutes are located in Chapter 457 of the Kentucky Revised Statutes (the “KY UPOAA”) and they replace KRS 386.093. KRS 386.093 was a bare-bones statute that dealt with only three issues related to POAs: (i) durability, (ii) the default method of determining a principal’s incapacity, and (iii) when an agent is authorized to make gifts of the principal’s property.

On the whole, the new laws adopted in Kentucky will provide substantially more guidance on the drafting, interpretation, and use of POAs than did KRS 386.093. Below are some of the items addressed in the new statutes:

  • Execution. A POA must be signed in the presence of two disinterested witnesses. This is a change from the prior law and uniform act, which do not require any witnesses. In addition, we recommend that the POA is signed before a notary public so it is an acknowledged POA capable of being filed to transfer real estate and for acceptance by a third party discussed below.
  • Durability and Coordination with Guardianship or Conservatorship Proceedings. Under the new act, a POA is durable unless the instrument specifically states otherwise. In addition, a principal may nominate a person for consideration by the court to serve as the principal’s guardian or conservator, if necessary. However, in a break from the uniform act and prior law, the POA terminates upon the appointment of a guardian or conservator unless the court specifically provides that it shall remain in effect.
  • Co-Agents. If a principal designates two or more persons to act co-agents, each co-agent may act independently unless the POA provides otherwise. This is different from the typical rule that require co-agents or co-fiduciaries to act by a majority.
  • Agent compensation. By default, an agent is entitled to reasonable compensation. To the extent the principal does not wish the agent to receive compensation, the principal would need to say so explicitly in the POA.
  • Fiduciary duties. At a minimum, an agent must act in good faith, within the scope of the authority granted to him or her, and in accordance with the principal’s reasonable expectations or best interests. However, a principal may waive certain other duties such as the duty of loyalty and to avoid conflicts of interest, which may not be appropriate when a close family member or personal friend is serving as agent.
  • Acceptance by a Third Party. In response to difficulties some agents face persuading banks, insurance companies, or other institutions to accept an otherwise valid and enforceable POA that may not match up with the institution’s internal policies and procedures, a third party must accept a POA that was acknowledged by a notary or may ask for a certification, translation into English, or opinion of counsel regarding authority granted to the agent in the instrument. However, the third party may not require an additional or different form of POA for authority granted in the POA presented.
  • Gifting. Curiously, unlike its predecessor, the KY UPOAA is entirely silent on whether or under what circumstances an agent has authority to make gifts of the principal’s property, except that the agent shall attempt to preserve the principal’s estate plan including the minimization of taxes. Accordingly, unless a specific grant of authority is included in the POA, it may be unclear whether an agent is authorized to make gifts.

Any POA validly executed in Kentucky prior to July 14, 2018, will continue to be valid under the new law. However, the new act will apply a judicial proceeding concerning a POA commenced on or after July 14, 2018.

Contact a member of SKO’s Trust and Estates practice to discuss how best you can use this opportunity.

BUS PHOTO

Emerging Lawyers List: We introduce Catherine “Cat” McCulle

Catherine “Cat” McCulle started at Lindy Korn PLLC as a legal assistant. She is now an associate there and a new member of the Erie County Bar Association’s Young Lawyers Committee Executive Council. This fall she will become a board member of the Evans Senior Center.

McCulle grew up in Angola, resides in Derby and is a labour and employment attorney specialising in employment discrimination, wage and hour matters and class-action lawsuits.

To help with time-management, she uses Excel spreadsheets with color-coded to-do lists.

When not in the office, she enjoys cooking, fishing, playing ice hockey and golf, going to the beach and spending time with her dog.

What bit of advice do you wish you had known before entering the workforce? Don’t be afraid to ask for help. Make friends. You need to find light where you can.

Do you prefer working from home, in the office or somewhere else? It depends on the task but I love having the flexibility to do work from home or in the office. Overall, I prefer being home so I can work alongside my beloved dog.

Where do you see yourself in your career in 10 years? Honestly, I have no idea. I just want to be doing something I love and (hopefully) doing so successfully and I will be content.

What is your ideal type of workplace? Diverse, with interesting people. Working with people who have different opinions or outlooks on life and on legal matters is incredibly beneficial for growth and successful collaboration.

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Napthens selected to help farmers with legal advice

Napthens solicitors has been reappointed by the National Farmers’ Union as one of just two panel firms for the North West, meaning it will continue to work with members across Cumbria.

The news comes after a six-month review by the NFU of its panel firms, looking at factors including services, fee structures, commitment to NFU members and feedback.

This year is a landmark one for the NFU panel, which was established in its current format 10 years ago, with Napthens as one of its founding firms.

Napthens, which has an office in Kendal, will remain a panel firm for a further three years.

Andrew Holden, head of the rural team at Napthens, said: “As one of the original panel firms we are delighted to continue our relationship with the NFU and its members by being reappointed to the legal panel.

“We understand the challenges faced by the sector when planning, sometimes decades in advance, for succession and look forward to working with NFU members in the region for a further three years.”

NFU North West regional director David Hall said: “Our members are facing an ever-increasing regulatory burden so it’s essential we have the right firms in place on our legal panel, with strong agricultural and rural teams, to provide the support they need.

“Napthens has strength and depth of expertise in both farming and non-agricultural issues.”

About the National Farmers’ Union of England and Wales

The National Farmers’ Union is a member organisation/industry association for farmers in England and Wales. It is the largest farmers’ organisation in the countries, and has over 300 branch offices.

ADVISORY EXCELLENCE

Law At Work Celebrating a Decade of Advisory Excellence

Law At Work, the Channel Islands’ employment relations specialists, marked its 10th anniversary of advising Channel Island businesses in the fields of employment rights, human resources, and health and safety, by holding a series of briefings and training on the forthcoming Discrimination (Jersey) Law 2013.

Established in 2004, Law At Work came under Channel Island ownership in 2010 following a management buyout and is today led by Kelly Flageul, Managing Director, Heidi Gibaut, Executive Director, Sharon Peacock, Technical Director and Richard Plaster, Director who between them have over 75 years of combined legal and human resources experience.

Ten years on and Law At Work’s experienced HR professionals and health and safety experts, supported by their non-practising legal team, continue to deliver training, documentation and support on employee relations matters. The service is tailored to the specific requirements of a business from day-to-day HR management to the roll out of more strategic programmes, as well as guiding clients through the tribunal process. The health and safety team deliver practical training, site and office safety inspections and accident investigation services, assisting clients to meet their legal obligations and provide a safe workplace for their customers and employees.

Kelly Flageul, Managing Director of Law At Work, said: “We’re celebrating our 10th anniversary at a time when significant anti-discrimination legislation is about to be introduced in Jersey and businesses are only too aware of needing to be prepared for it. This has highlighted the value of the service that we offer to businesses, large and small, who are seeking support and guidance to navigate their way through new laws.

“Over the last 10 years the Law At Work service has evolved to meet the changing needs of businesses, it is no longer just about making sure HR policies and employee handbooks are up to date; with new employment laws there is a great deal more for businesses to consider and we’re there to support them. We have also developed our service lines to serve local businesses with support in regard to health and safety laws, an area which is often neglected at great cost.

“We would like to thank our clients for their ongoing support and we are now seeking to take the business forward and continue supporting Channel Island businesses for the next decade, and beyond.”

How We Work

As trusted experts in employment law, HR and health & safety, we offer a range of flexible employee relations services under one roof. By delivering top quality, all-inclusive fixed-fee advice, we enable employers to take quick, confident and decisive action.