The Durable Power of Attorney\u27s Place in the Family of Fiduciary Relationships

The durable power of attorney is a deceptively simple document that allows one person to handle the affairs of an incapacitated person without court supervision. It is merely an agency relationship, established by a written document, that continues during the principal\u27s incapacity. The durable power of attorney has been in widespread use only for about twenty-five years. It is very easy to draft, and its use escapes most court proceedings or even much need for legal assistance. The durable power of attorney has therefore kept a low profile until now, and any attention it is now receiving focuses primarily on abuse of the document, an admittedly rare occurrence. However, the durable power of attorney has become extremely widespread as an aging population faces increasing likelihood of periods of disability and as life becomes more complicated, requiring more formal arrangements to handle one\u27s financial affairs. This quiet little document creates a unique fiduciary relationship that is overdue for analysis. That analysis can begin to identify and answer the many open questions about the nature of the relationship and the scope of duties of an attorney-in-fact. Analysis of the durable power of attorney can also shed light on the broader question that has been open for centuries and is still vigorously debated: what is the nature of a fiduciary? The status of fiduciary is a well-recognized legal concept with a long history, but nevertheless retains considerable ambiguity and confusion in application. There are certain discrete categories of fiduciaries—trustees, guardians, agents, executors—with corresponding discrete lists of rights, duties, and remedies for breach of duties. Courts have sometimes expanded the role of a fiduciary beyond the traditional categories when circumstances indicate that a person\u27s relationship with another should impose a higher duty. Examples of such relationships include priest or minister-parishioner, employee-employer, insurance broker-insured, stockbroker-power client and school-student. However, when expanding the definition of fiduciary, courts have adapted the consequences of that characterization to fit the particular situation. The result is now a patchwork, where the traditional categories are surrounded by situational fiduciaries that borrow from an assortment of the established rules to define the scope of that particular fiduciary\u27s duties. Part II of this Article will describe the evolution of the durable power of attorney. Part III will summarize general fiduciary principles and their application in both traditional fiduciary roles and fact-based fiduciary settings. The precise nature of the fiduciary relationship is subject to considerable debate; that debate is also described in Part III. Part IV discusses how the durable power of attorney, a example of a fiduciary relationship not previously considered in the theoretical debate, illuminates the general discussion. Finally, Part V applies fiduciary principles to the durable power of attorney and points out the numerous ambiguities regarding the attorney-in-fact\u27s duties. This section then makes recommendations to clarify the scope of those duties in order to serve purposes of both curbing abuse of powers of attorney and making them more useful

Community Property and Conflict of Laws: A Cacophony of Cases

Justice Cardozo is reported to have said that the average judge, when confronted by a problem in the conflict of laws, feels almost completely lost, and, like a drowning man, will grasp at a straw. Conflict of laws can be vexing, but the resolution of a controversy involving multiple states\u27 marital property systems can quickly become impenetrable. This is in part due to the fundamental conceptual differences between community property and common law marital property paradigms, the inconsistencies in the use of similar terms in the different systems, and the significant differences among the laws of the community property states themselves. Added to the multitude of variations in the marital property law rules to be applied, there are the myriad potential fact patterns as well as layers of other legal issues, competing for application of the determining choice of law. Courts continue to turn to traditional conflict-of-laws principles that were initially found in the Restatement (First) of Conflict of Laws (First Restatement), choosing the law of the situs for real property and the law of the domicile for characterization of marital personalty, but these rules are deceptively simple and ill-equipped to answer the more complex choice-of-law dilemmas in this area. Even with more modern approaches to conflicts of law analysis, courts struggle. The confusion affects more than just property rights between two spouses, but also creates uncertainty whenever a person does business with a married person in another state. To set the stage, this Article begins with a description of three cases that deal with one state\u27s rule on spousal liability for guaranty agreements, as it applies in the interstate setting. The different courts end up with three dramatically different results, using very different analytic approaches. Next, so that the reader is familiar with the various marital property laws that are in conflict in the cases discussed, the Article briefly describes community property in the United States, the common features among the nine traditional community property states, examples of variations among those states\u27 laws, and the fundamental differences between community property and common law marital property regimes. It also summarizes the available choice of law principles that are invoked in U.S. courts when two or more regimes are involved in a particular controversy. The Article then identifies common marital property issues that raise conflicts concerns. There are some issues that are relatively straightforward and are dealt with by courts with some consistency. But the farther away the issue strays from the basic question of ownership in property of married persons, the harder it is for courts to apply the available analytic tools to arrive at consistent results. The Article proposes that courts abandon recent attempts to parrot rule-based norms and instead approach the cases by directly considering the interests and policies present in the particular case, and the effect of the various solutions on those interests and policies, before choosing the solution. That case-by-case approach might be criticized as leading to unpredictability, but it is hard to imagine a less predictable body of case law than what we have presently. The descriptions and variations of the U.S. marital property regimes, the catalog of potential conflicts issues that can arise with respect to marital property, and the description of cases resolving choice-of-law issues with respect to marital property contained in this Article are not comprehensive but are only representative and intended to illustrate the confusion and inadequacy of traditional choice-of-law jurisprudence to resolve these issues fairly

Shakespeare in the Classroom: How an Annual Student Production of King Lear Adds Dimension to Teaching Trusts and Estates

I always begin the first day of my Trusts and Estates course by discussing the reasons for taking the class. While I note that some students may take the class to help in passing the bar exam or because family members have already asked them to draft wills, my list of reasons instead include: (1) exposure to the fiduciary relationship; (2) the real life ethical dilemmas faced by the lawyers; (3) learning to read and interpret state statutes; and (4) consideration of how law responds to societal changes and governs human relationships. This last reason is critical: Trusts and Estates is a unique opportunity to understand the interplay between law and society because its subject-matter is accessible to all students. They all can relate to the conflicts to be resolved in the cases, and they are able to form opinions as to how well the rules suit the needs of the range of relationships presented in the community. King Lear is the archetypal story of the tension and difficulties in parent-child and sibling relationships and reinforces the message that those relationships are the starting point and bedrock of this body of law and the vast system of rules that has been developed to resolve these conflicts. I wish I could say that I began using an in-class production of King Lear in my Trusts and Estates class as the result of careful thought about my pedagogical goals and integration of an understanding of generational strife. But no, King Lear arrived in my classroom by sheer luck. Over a decade ago, I was waiting in the checkout line at Barnes and Noble and saw on the sale table something called Shakespeare in a Box: King Lear. It was a kit for staging a forty-five minute version of King Lear, complete with scripts, a couple of rubber eyeballs, and a collapsing stage dagger. King Lear is the estate planner\u27s favorite Shakespearean tragedy, so I had to buy it. Once I got it home, the coincidence of a forty-five minute script and a fifty minute class period made me realize that I could avoid an hour of teaching by having the students perform the play, and I could justify it because King Lear was the premier example of estate planning gone bad. Thus began the annual King Lear production, which has now gone through eleven casts. Along the way, I have come to realize that a student production of King Lear is not only fun but incredibly useful as a teaching tool in a Trusts and Estates class. It drives home the human element that is critical in all of the stories we study in the wills and trusts cases, and it also teaches valuable skills to students and raises broader questions about the role of societal norms and expectations in inheritance law. This Article first summarizes the plot of King Lear and then describes the process I use to get the play produced. It then sets forth some of the estate planning and lawyering lessons King Lear presents and describes some of the skills I think the play production helps develop. Finally, the Article discusses the less traditional benefits from holding an in-class performance of a play. In preparation for this Article, I emailed all the members of the King Lear casts and asked what they remembered about the experience and what they leamed, and I have incorporated many of my former students\u27 responses in this discussion

Experiments in Agency Justice: Informal Adjudicatory Procedures in Administrative Procedure Acts

The 1961 Revised Model State Administrative Procedure Act and most state administrative procedure acts ( APAs ) provide for only one type of agency adjudication: a formal, trial-type hearing. The 1981 Model Act and five state APAs have departed from this approach by providing additional, more informal adjudicatory procedures. This Comment examines the developments since 1961 that prompted the drafters of these acts to include informal procedures. The major impetus for the change was the due process explosion, which extended hearing rights to interests that had been considered too minor for formal hearings. The Comment then compares the 1981 Model Act and the five state acts that contain informal procedures. The acts vary on three major issues that determine their effectiveness in dealing with the due process explosion. These three issues are: (1) the way that the act determines whether there is a right to a hearing, (2) the choice between formal and informal procedures, and (3) the procedural elements required at each level of proceeding. The Comment concludes that the 1981 Model Act is the most effective of the acts because it strikes the best balance between individual rights and the need for agency efficiency

Of Punctilios and Paybacks: The Duty of Loyalty under the Uniform Trust Code

Loyalty has been cited as the most desired of traits from those who serve others. One reason that loyalty is so highly valued is that it is impossible to guarantee and impossible to buy. The trust law concept of the duty of loyalty acknowledges that human nature will cause any person to favor his or her personal interests over the interests another, and it is this assumption of disloyalty that gives rise to the strict prohibitions of trustee conflicts of interest required under the label of “duty of loyalty.

Of Punctilios and Paybacks: The Duty of Loyalty Under the Uniform Trust Code

Loyalty has been cited as the most desired of traits from those who serve others. One reason that loyalty is so highly valued is that it is impossible to guarantee and impossible to buy. The trust law concept of the duty of loyalty acknowledges that human nature will cause any person to favor his or her personal interests over the interests of another, and it is this assumption of disloyalty that gives rise to the strict prohibitions of trustee conflicts of interest required under the label of duty of loyalty. The duty of loyalty has been called the essence of the fiduciary relationship and even has been considered an expression synonymous with fiduciary. The fiduciary relationship relies on the fiduciary\u27s loyalty to the beneficiary, and, as the beneficiary is assumed to be on the losing end of any conflict with the fiduciary\u27s personal interests, loyalty can be preserved only if the relationship is stripped of the possibility of such conflicts. The duty of loyalty is, therefore, not the duty to resist temptation but to eliminate temptation, as the former is assumed to be impossible. The trustee is at the pinnacle of fiduciary duty and is held to the highest standards. As compared to other fiduciaries, the trustee holds the highest level of control over the other\u27s property. It, therefore, follows that the trustee\u27s duty of loyalty will be paramount and unforgiving, at least one hundred percent. Of course, the trustee has a harder job than Mr. Goldwyn\u27s employees because a trustee\u27s duty of care is certainly higher than fifty percent. Generally, if a trustee breaches her duty of loyalty by self-dealing, there is no further inquiry and the transaction is voidable by the beneficiaries regardless of the fairness of the transaction. If the breach is a less direct conflict, a trustee may be able to uphold the transaction by proving fairness. The Uniform Trust Code ( UTC ) follows the approach of predecessor uniform statutes and some state codifications in leaving the core of the common law duty of loyalty intact, with only minor relaxations of the duty in specific instances where convenience far outweighs risk. However, the UTC has rearranged somewhat the parameters for determining when a transaction\u27s fairness will be available to the trustee as a defense and, in doing so, has added functional tests and clarity. This Article summarizes the common law origins of the duty of loyalty and various past attempts at codifying the duty. It then analyzes the UTC\u27s formulation of the duty and discusses how it provides guidance to both the acting trustee and to the court in determining whether a breach has occurred

Tiptoeing Through the Landmines: The Evolution of States’ Legal Ethics Authority Regarding Representing Cannabis Clients

Despite the continued federal classification of cannabis as an illegal drug, states have legalized the possession, use, production, and sale of cannabis. In order to do so, the states have created complex regulatory schemes to control and monitor the cannabis industry and satisfy the federal government concerns, such as use by minors and organized crime involvement. First, this Article presents the ethical dilemma of cannabis lawyering. Second, this Article describes the history, evolution, and current status of the various states’ pronouncements on a lawyer’s ethical duties with respect to the business and use of cannabis that may be legal under state law but illegal under federal law. Third, this Article briefly discusses the remaining dangers and concerns surrounding a cannabis law practice. Lastly, this Article concludes by emphasizing that states should clear the path for lawyers to represent cannabis clients by implementing a policy allowing cannabis representation, as such policies not only benefit the lawyers but also benefit the states that now have cannabis programs