Power of Attorney Litigation in Connecticut
By: Philip C. Pires
A power of attorney is a document under which one person, known as the principal, authorizes another person, known as the agent, to make financial decisions and transactions on his or her behalf. Powers of attorney are governed by the Connecticut Uniform Power of Attorney Act, Conn. Gen Stat. § 1-350, et seq. (the “Act”), a relatively recent law that modernizes powers of attorney in Connecticut and provides greater protections to principals.
Powers of attorney are either durable or non-durable. If a power of attorney is “durable,” then it remains in effect even if the principal becomes incapacitated. If a power of attorney is “non-durable,” then the power of attorney terminates upon the incapacity of the principal. Under the Act, all powers of attorney executed after October 1, 2016, are durable unless they provide otherwise. Regardless of the type of power of attorney, the power of attorney terminates upon the death of the principal.
A power of attorney can authorize the agent to act in a wide range of types of financial transactions. These powers may include the ability to manage and make decisions regarding real property, tangible personal property, stocks and bonds, commodities, bank and financial institution accounts, the operation of a business, insurance and annuities, estates and trusts, claims and litigation, personal family maintenance, governmental benefits, retirement plans, and taxes. The power of attorney may also grant the agent with specific authority to perform certain additional actions, including the ability to: i) create, amend, or revoke a living trust under certain circumstances; ii) make a gift; iii) create or change rights of survivorship to assets; iv) create or change beneficiary designations; v) waive the principal’s right to be a beneficiary of a joint and survivor annuity; vi) exercise fiduciary duties that the principal has the authority to delegate; vii) disclaim property, including a power of appointment; viii) exercise all powers the principal may have over digital devices and assets; ix) manage intellectual property rights.
The agent must act in accordance with the principal’s reasonable expectation or best interest, in good faith, and only within the scope of the authority granted by the power of attorney. In addition, the agent is also required to keep a record of all receipts, disbursements, and transactions made on behalf of the principal. Furthermore, the agent also must attempt to preserve the principal’s estate plan to the extent known by the agent, provided that preserving the estate plan is in the principal’s best interest. If the agent does not act in accordance with his or her duty to the principal, then the principal can potentially pursue a breach of fiduciary duty claim against the agent.
At times, the principal or a family member of the principal may have concerns about the conduct of the agent. In such circumstances, the principal or the principal’s spouse, parent, descendant, presumptive heir, or fiduciary, may petition the probate court for an accounting of the agent’s actions under Conn. Gen. Stat. § 1-350o.
If someone other than the principal has petitioned the probate court for an accounting, and the principal does not want the agent to prepare an accounting, the principal may move to dismiss the petition. The probate court is then bound to dismiss the accounting petition unless the probate court finds that the principal is incapacitated. As defined in the Act, “incapacitated” means that the principal is unable, even with appropriate assistance, to manage his or her affairs because the principal i) has a mental, emotional, or physical condition that results in the individual being unable to receive and evaluate information or communicate decisions; or ii) is missing; or iii) is detained or incarcerated in a penal system; or iv) is outside the United States and unable to return.
If the petition was filed by someone other than the principal, the agent, or the principal's guardian, conservator, or other fidicuary, then the probate court may only grant the petition if the probate court finds that (1) the petitioner has an interest sufficient to entitle the petitioner to the relief requested, (2) cause has been shown that such relief is necessary, and (3) the petition is not for the purpose of harassment.
If you or someone you know believes that an agent has abused or misused a power of attorney, you should consult with one of our experienced probate litigation attorneys. We handle litigation matters involving powers of attorney throughout the State of Connecticut. Contact us today for a consultation.
If you need a power of attorney or other estate planning document prepared, you should consult with the attorneys in our Trusts & Estates Group.
Philip C. Pires is a member of the Probate Litigation, and Litigation & Dispute Resolution Groups at Cohen and Wolf, P.C. Phil regularly represents beneficiaries, fiduciaries, and creditors in a variety of contested probate proceedings.