HB348 (2005) Detail

(New Title) relative to real and personal property conveyances made under powers of attorney.


CHAPTER 71

HB 348 – FINAL VERSION

30Mar2005… 0660h

2005 SESSION

05-0592

06/09

HOUSE BILL 348

AN ACT relative to real and personal property conveyances made under powers of attorney.

SPONSORS: Rep. Converse, Sull 4

COMMITTEE: Commerce

AMENDED ANALYSIS

This bill:

I. Declares the legislative intent concerning the disclosure statement required under a durable general power of attorney and the acknowledgement required under a durable general power of attorney.

II Clarifies that certain conveyances of real and personal property are not invalid because of failure to follow the technical form prescribed in statute.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

30Mar2005… 0660h

05-0592

06/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Five

AN ACT relative to real and personal property conveyances made under powers of attorney.

Be it Enacted by the Senate and House of Representatives in General Court convened:

71:1 Powers of Attorney; Clarification of Legislative Intent.

I. The general court declares that its intent in enacting and amending RSA 506:6, VI, VII, and VIII(b), and RSA 506:7, IV(b), under 2001, 257, and 2003, 312, was not to impose the requirements of principal disclosure statement and agent acknowledgment on powers of attorney that are by their terms limited to a specified transaction or series of transactions such as representing a principal in a sale of a parcel of real estate or lots in a subdivision, but rather to impose the new requirements on durable powers of attorney that are general in nature, and thus more vulnerable to possible misuse.

II. The general court further declares that its intent in enacting and amending the statutes referred to in paragraph I was not to invalidate conveyances made to bona fide purchasers under powers of attorney that fail to comply with RSA 506:6, VI or VII, or both, where reasonable consideration is paid and the purchaser has no actual knowledge or reason to believe that the agent is misusing the power of attorney.

III. This act clarifies the original legislative intent of the above-referenced statutes, and effectuates such intent in regard to conveyances that have occurred prior to the effective date of this act.

71:2 Powers of Attorney; Disability or Incompetence of Principal; Disclosure Statement. Amend RSA 506:6, VI(a) to read as follows:

VI.(a) A disclosure statement, signed by the principal, in substantially the following form, shall be affixed to a durable general power of attorney:

INFORMATION CONCERNING THE DURABLE POWER OF ATTORNEY

THIS IS AN IMPORTANT LEGAL DOCUMENT. BEFORE SIGNING THIS DOCUMENT YOU SHOULD KNOW THESE IMPORTANT FACTS:

Notice to the Principal: As the “Principal,” you are using this Durable Power of Attorney to grant power to another person (called the “Agent” or “Attorney in Fact”) to make decisions, including, but not limited to, decisions concerning your money, property, or both, and to use your money, property, or both on your behalf. If this written Durable Power of Attorney does not limit the powers that you give to your Agent, your Agent will have broad and sweeping powers to sell or otherwise dispose of your property, and to spend your money without advance notice to you or approval by you. Under this document, your agent will continue to have these powers after you become incapacitated, and unless otherwise indicated your Agent will have these powers before you become incapacitated. You have the right to retain this Power and not to release this Power until you instruct your attorney or any other person who may hold this Power of Attorney to so release it to your Agent pursuant to written instructions. You have the right to revoke or take back this Durable Power of Attorney at any time, so long as you are of sound mind. If there is anything about this Durable Power of Attorney that you do not understand, you should seek professional advice.

_________________________

Principal

71:3 Powers of Attorney; Disability or Incompetence of Principal; Acknowledgment. Amend RSA 506:6, VII(a) to read as follows:

VII.(a) An agent shall have no authority to act as agent under [the] a durable general power of attorney unless the agent has first executed and affixed to the power of attorney an acknowledgment in substantially the following form:

I, ___________, have read the attached power of attorney and am the person identified as the Agent for the Principal. I hereby acknowledge that when I act as Agent or “attorney in fact,” I am given power under this Durable Power of Attorney to make decisions about money, property, or both belonging to the Principal, and to spend the Principal’s money, property, or both on the Principal’s behalf, in accordance with the terms of this Durable Power of Attorney. This Durable Power of Attorney is valid only if the Principal is of sound mind when the Principal signs it. When acting in the capacity of Agent, I am under a duty (called a “fiduciary duty”) to observe the standards observed by a prudent person, which means the use of those powers that is reasonable in view of the interests of the Principal and in view of the way in which a person of ordinary judgment would act in carrying out that person’s own affairs. If the exercise of my acts is called into question, the burden will be upon me to prove that I acted under the standards of a fiduciary. As the Agent, I am not entitled to use the money or property for my own benefit or to make gifts to myself or others unless the Durable Power of Attorney specifically gives me the authority to do so. As the Agent, my authority under this Durable Power of Attorney will end when the Principal dies and I will not have authority to manage or dispose of any property or administer the estate unless I am authorized to do so by a New Hampshire Probate Court. If I violate my fiduciary duty under this Durable Power of Attorney, I may be liable for damages and may be subject to criminal prosecution. If there is anything about this Durable Power of Attorney, or my duties under it, that I do not understand, I understand that I should seek professional advice.

___________________

Agent

71:4 Powers of Attorney; Disability or Incompetence of Principal; Validity. Amend RSA 506:6, VIII(b) to read as follows:

(b) Failure to comply with paragraph VI or VII shall not invalidate an otherwise valid durable general power of attorney, subject to the provisions of RSA 506:7, IV(b).

71:5 New Subparagraph; Powers of Attorney; Disability or Incompetence of Principal; Validity of Conveyances to Bona Fide Purchasers. Amend RSA 506:6, VIII by inserting after subparagraph (b) the following new subparagraph:

(c) Notwithstanding the provisions of paragraph VI or VII or RSA 506:7, IV(b), a conveyance of real or personal property to a bona fide purchaser for reasonable consideration under an otherwise valid durable general power of attorney that failed to comply with RSA 506:6, VI or VII, or both, shall not be set aside on account of such failure unless the purchaser had actual knowledge or good reason to believe that the agent was misusing the power of attorney in making the conveyance. This subparagraph shall apply to every conveyance made on or after January 1, 2004, unless an action to set aside such conveyance has been filed prior to the effective date of this subparagraph.

71:6 New Paragraphs; Powers of Attorney; Disability or Incompetence of Principal; Definitions; Validity Amend RSA 506:6 by inserting after paragraph IX the following new paragraphs:

X.(a) “Durable power of attorney” as used in this chapter means a power of attorney described in paragraph I.

(b) “Durable general power of attorney” as used in this chapter means a durable power of attorney that is not limited by its terms to a specified transaction or series of transactions.

XI. Any durable power of attorney limited by its terms to a specified transaction or series of transactions and executed before the effective date of this paragraph shall not be deemed invalid or affected in any way because it does not comply with paragraph VI or VII.

71:7 Powers of Attorney; Limitations on the Agent; Presumption of Lawfulness. Amend RSA 506:7, IV(b) to read as follows:

(b) When a gift or transfer made by an agent under a durable general power of attorney is challenged in a petition filed under paragraph III of this section, the gift or transfer shall be presumed to be lawful if the durable power of attorney is accompanied by the disclosure statement and acknowledgement drafted in accordance with RSA 506:6, VI and VII, and explicitly authorizes such gifts or transfers as set forth in RSA 506:6, V. However, if the petitioner establishes that the agent made a transfer for less than adequate consideration, and the transfer is not explicitly authorized by a durable power of attorney drafted in accordance with RSA 506:6, VI and VII, the agent shall be required to prove by a preponderance of evidence that the transfer was authorized and was not a result of undue influence, fraud, or misrepresentation.

71:8 Effective Date. This act shall take effect upon its passage.

(Approved: May 31, 2005)

(Effective Date: May 31, 2005)