Marilyn Maag on Ohio's Uniform Power of Attorney Act

Marilyn Maag on Ohio's Uniform Power of Attorney Act

Effective March 22, 2012, Ohio adopted the Uniform Power of Attorney Act (§§ 1337.21 to 1337.64 of the Ohio Rev. Code). The changes apply to all powers of attorney except a power of attorney that is coupled with an interest in the subject of the power, such as powers given to a creditor; to make health care decisions; a proxy to exercise voting rights of an entity; or a power created on a governmental form to be used for a governmental purpose. In this Analysis, Marilyn Maag discusses Ohio's Uniform Power of Attorney Act. She writes:

Duties of agent

The agent must act in the principal's best interest and must carry out the principal's reasonable expectations, if those expectations are known to the agent. The agent must act in good faith and within the scope of authority granted in the power of attorney.

In Ohio, an agent has a duty to preserve the principal's estate plan.

An agent must act with loyalty to the principal; avoid creating a conflict of interest situation that impairs the agent's ability to be impartial; exercise the care, competence, and diligence ordinarily exercised by agents; keep records of all financial transactions; and cooperate with the person who has the authority to make health care decisions.

Review of agent's conduct; liability of agent

--Limits of agent's liability

The Ohio statutes clarify the limits of an agent's liability. An agent is not liable to a beneficiary of the principal's estate plan for failing to preserve the principal's estate plan if the agent has acted in good faith. Similarly, an agent is not responsible for a decline in the principal's property values, unless the agent actually has breached a duty. If an agent acts in the principal's best interest, and exercises the reasonable care, competence, and diligence expected of an agent, then the agent is not liable solely because the agent happens to benefit, along with the principal, from a particular act or even has a conflicting interest to that of the principal. An agent who is authorized to delegate authority or hire persons to assist the agent, and exercises reasonable care, competence, and diligence in doing so, is not responsible for the errors, negligence, or actions of the persons who provided assistance.

When considering the potential liability of an agent, however, the special skills or expertise of the agent are a factor. If an agent was appointed specifically because of special skills or expertise, then the agent's extraordinary abilities are considered when determining whether the agent exercised reasonable care, competence, and diligence.

--Action to construe document or review agent's conduct

Revised Code § 1337.36 states that the principal, or persons connected with the principal, such as family members, fiduciaries, beneficiaries, caregivers, or even persons asked to accept the power of attorney may file an action in the probate court, asking a court to interpret or explain the meaning of the document or to review the agent's conduct. An agent that violates the Ohio Uniform Power of Attorney Act is liable to the principal, or the principal's successors in interest, for damages. If the principal has suffered a financial loss, the agent must make the principal whole and, in addition, must pay the principal's attorney fees.

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