Legislature(2013 - 2014)
04/07/2014 03:24 PM House L&C
| Audio | Topic |
|---|---|
| Start | |
| HB357 | |
| HB254 | |
| HB336 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 254-POWERS OF ATTORNEY
3:40:41 PM
CHAIR OLSON announced that the next order of business would be
HOUSE BILL NO. 254, "An Act relating to powers of attorney;
relating to the uniform probate code; and providing for an
effective date."
REPRESENTATIVE REINBOLD moved to adopt the proposed committee
substitute (CS) for HB 254 labeled 28-LS1057\U, Bannister,
3/6/14, [Version U] as the working document.
CHAIR OLSON objected for the purpose of discussion.
3:41:14 PM
GINGER BLAIDELL, Staff, Representative Shelley Hughes, Alaska
State Legislature, explained the changes in Version U. She
stated that the bill is lengthy and technical. The sponsor
decided to file the bill just prior to the filing deadline and
to make technical corrections to the bill later, which were
incorporated into Version U. The power of attorney bill does
primarily four things, she explained. First, page 2 outlines
the power of attorney structure so the principal, who has the
assets, is more likely to consider each type of financial power
that is being awarded to the agent, who will be acting on their
behalf. Additionally, referring to page 27, language was added
to improve the ability for an agent to be removed of his/her
powers in the event dishonesty or a breach of the agreement
occurs. Second, a new section on page 28 specifies the agent's
duties and it specifically identifies the duties of a person who
obtains the power of attorney. Third, page 32, proposed Section
24, outlines the criteria for acceptance of power of attorney.
Fourth, the language on page 34 was added that outlines the
steps taken when a power of attorney is terminated or if the
agent resigns, which previously was not clearly defined.
3:43:20 PM
MS. BLAISDELL commented that language is updated throughout the
bill so disability was replaced with incapacity. For example,
there may be a number of instances in which a person may not be
capable of making financial decisions due to the person being
out of the country, missing, or temporarily injured. Thus,
incapacity was a more appropriate term, which is defined on page
36 in paragraph (3).
3:44:19 PM
MS. BLAISDELL provided a section-by-section analysis of HB 254,
Version U. Section 1 would replace the current definition of an
agent. She related that previous terms included "attorney-in-
fact" and other terms that applied to the agent; however, this
bill defines "agent" and replaces the terms with "agent."
Section 2, a technical change, corrects the definition of
"state" to include the U.S. Virgin Islands. Section 3 adds new
definitions for "durable," "electronic," "power of attorney,"
"principal," "record," and "sign" as these terms relate to this
act. She added that "sign" means, "with present intent to
authenticate or adopt a record...." She pointed out that some
individuals suffering from arthritis can barely sign their name
once and this is intended to be less burdensome.
3:45:53 PM
REPRESENTATIVE JOSEPHSON referred to the new definition for
"durable" and asked whether it will it apply to living wills.
MS. BLAISDELL said the definitions only apply to this act.
REPRESENTATIVE REINBOLD remarked that she particularly liked the
changes on page 3 and 4 since the transactions designating the
power of attorney are broken into categories.
3:46:58 PM
REPRESENTATIVE CHENAULT recalled the last power of attorney he
was involved in and asked why a power of attorney is not
acceptable in small claims case.
REPRESENTATIVE JOSEPHSON answered that he was unsure, but the
court has separate civil rules for small claims, which fall
under district court rules.
MS. BLAISDELL related that the definition of "sign" in Section
3, allows the person to adopt a tangible symbol or electronic
sound. Thus, a person could fill out the forms, she said.
3:48:28 PM
MS. BLAISDELL stated that Section 4 amends the statutory form
required to assign a power of attorney, from giving the person
single powers to opt out of each choice, with the intent of
allowing the incapacitated person the opportunity to make better
choices by helping inform the party what functions are being
signed over. She emphasized that this represents the most
significant change, which was recommended by the long-term care
ombudsman and some senior centers, so that one signature doesn't
encompass and transfer power over every legal transaction.
REPRESENTATIVE REINBOLD remarked that she is very excited. She
predicted that the changes this bill makes will be very helpful.
3:49:42 PM
MS. BLAISDELL referred to Section 5, which amends the statutes
that remove the powers to revoke, create, or modify a trust as a
general authority. Throughout this bill, language "revoke,
create, or amend a trust" is removed, she said.
MS. BLAISDELL said three areas must be specifically initialed or
the agent or agents will not have the power of authority since
these areas can greatly impact the incapacitated person: first,
for the authority being granted to create, amend, revoke, or
terminate an inter vivos trust; second, for the authority to
make a gift, subject to the limitations of AS 13.26.244 (h) and
any special instructions in this power of attorney; and third,
to create or change a beneficiary designation. Again, these
three areas may be overarching of some of the other areas and
must be specifically granted to the agent or agents, she said.
3:50:43 PM
REPRESENTATIVE REINBOLD referred to page 4, line 20 and asked
whether this would be a living trust.
MS. BLAISDELL answered yes, that an inter vivos trust is used in
estate planning and is also known as a living trust.
3:51:18 PM
MS. BLAISDELL related that Sections 6-7 removes "revoke, create
or modify a trust" since it must be specified. She related that
Section 8 allows the agent to credit and debit cards. She
clarified that the last time the power of attorney statutes were
considered was in 1988 and not everyone had electronic
transactions; thus, this will move power of attorney actions
into the 21st Century.
MS. BLAISDELL stated that Section 9 amends existing statute to
conduct additional business related actions to further protect
the interests of the principal; Section 10 amends existing
statute to exercise investment powers available, which had not
previously been included, and Section 11, on page 16, would
repeal powers for the agent to receive general authority with
respect to gift transactions.
MS. BLAISDELL said that Section 12 would amend statutes to
further define insurance transactions and allow the power of
attorney to make decisions on insurance and issuance payments.
Page 22 relates to provisions for personal representative
authorizations to make child support payments and assist the
principal who normally provided support for someone to continue
to provide it.
3:54:03 PM
REPRESENTATIVE CHENAULT asked whether an agent would exercise
the authority to allow a person to live in customary support.
He asked for clarification on how that would affect the power of
attorney and whether it would take away or expand the authority.
He wondered if the agent would take the power away and "control
the purse strings."
MS. BLAISDELL suggested there were two ways to think about it.
First, the principal could select to have the agent take
specific action, such as to only balance the principal's
checkbook. The existing law allows the power of attorney to
maintain customary standard of living for the spouse, children,
and other dependents. She explained that [paragraph (1)] added
a child "later born" and she was unsure if it would give more or
less authority. She commented that it could be circumstantial
to the person making the choices.
3:56:41 PM
MS. BLAISDELL referred to page 24, paragraph (15), which notes
that the agent may be privileged to Health Insurance Portability
and Accountability Act (HIPPA) protected information in
instances in which the agent has been asked to take care of some
of the health care on behalf of the principal. She turned to
page 25, Section 15, which gives the power of attorney or civil
or military service benefits, which has arisen due to the U.S.
involvement in which some military with overseas action did not
return home in same capacity. She referred to page 26, proposed
Section 16, which she said relates to retirement plans.
MS. BLAISDELL stated that Section 17 relates to the state
recognizing power of attorney executed in another state so long
as it was completed under the rules of the other jurisdiction.
She explained that Section 18, which was supported by the long-
term ombudsman, addresses relieving a power of attorney if the
person committed dishonesty with an improper motive or with
reckless indifference. She explained that previously it wasn't
possible to remove a person once they had the power of attorney.
3:59:24 PM
CHAIR OLSON asked for clarification on the numbering sequence.
MS. BLAISDELL agreed that she may have started with the original
bill so the sections didn't match Version U. She reported that
Section 19 includes all of the agent's duties, including acting
in good faith, and within the scope of duty granted to an agent.
She reiterated that it describes the duties of an agent, as well
as provisions if a breach of agreement occurs.
MS. BLAISDELL related that Section 20 replaces "principal"
"incapacity" and "agent" throughout the bill. She characterized
the changes as being technical changes.
4:01:07 PM
MS. BLAISDELL pointed out that Section 22 identifies how
incapacity is determined, including when a principal suffers an
impairment in his/her ability to receive and evaluate
information or make or communicate decisions, or because the
principal is missing, detained or incarcerated. She stated that
Section 24 explains the acceptance of power of attorney so
agents can better understand their responsibilities on behalf of
the principal. Section 25 outlines the termination of power of
attorney and Sections 26 and 27 are technical changes. Section
28 adds additional definitions, including benefits from
government programs or civil or military service, good faith,
incapacity, and retirement plans. She summarized the four
primary changes in the bill. It would also revise the form to
make it more responsive for principals so they can better
understand the authority they are giving the agent. It improves
the language to remove a power of attorney if the person is not
acting appropriately. It identifies the duties of a power of
attorney. Finally, it changes some definitions.
4:02:48 PM
REPRESENTATIVE JOSEPHSON acknowledged the complexity of family
law, noting the frequent use of conservatorship and trustees.
He asked how this interacts with those terms, in particular,
conservatorship, in which someone has similar powers, but is
deemed conservator.
MS. BLAISDELL answered that she was unsure. She stated that all
definitions were specific to a power of attorney.
4:03:39 PM
REPRESENTATIVE JOSEPHSON asked whether a model law was used to
craft the bill or if the sponsor proposed the concept.
MS. BLAISDELL answered that the AARP first suggested the
changes.
4:04:05 PM
REPRESENTATIVE SHELLEY HUGHES, Alaska State Legislature, stated
that she was first approached by people at the senior center.
She discussed this with AARP and considered uniform law changes
and which ones made sense in Alaska. She said that the sponsor
has worked with the Association of Mature Americans, the AARP's
counterpart, and the organization has been supportive. Further
she worked with the long-term care ombudsman and the governor's
office and said it is a joint effort. She related that the last
substantial work on this section of law was done in 1988. About
one in seven Alaskans is age 60 or older. She also pointed out
the importance of assisting vulnerable Alaskans and helping
children assist their parents. These changes are compatible
with interstate laws, which she said was a reason to consider
the effects of the uniform law, especially since it is likely
Alaskans will be separated from their parents by a state line.
4:07:10 PM
REPRESENTATIVE REINBOLD referred to page 3 line 31, subparagraph
(G), estate transactions. She related a scenario in which a
principal requests a will, but subsequently gives someone the
ability to handle estate transactions. She also referred to
page 4, line 26-28, that agents can be different agents. She
asked who would have the authority.
4:08:31 PM
MS. BLAISDELL referred to subparagraph (G) and pointed out that
page 21, Section 13, identifies the structure for power of
attorney for estate transactions. She recalled the legislative
attorney's explanation that a will is used when a person dies,
and a power of attorney is used when the person is living. The
provisions in a will might flip completely, versus what the
principal outlines in the power of attorney for the day to day
actions.
REPRESENTATIVE JOSEPHSON said he believed she is correct.
CHAIR OLSON said he likes the bill and he hoped the sectional
will better match the bill at the next committee.
4:10:22 PM
KEN HELANDER, Director for Advocacy, AARP-Alaska, said that he
and his predecessor, Pat Luby, have worked on this issue with
the sponsor and believes this bill protects the interests of
older Alaskans. He related that a power of attorney is a legal
document used by an individual, the principal, to name someone
else, the agent, to make financial decisions and to act on the
principal's behalf. He clarified that this is not a health care
power of attorney and it does not offer health care decisions,
but it does authorize planning for the possibility of future
incapacity and avoid the court appointment of a guardian or
conservator. He pointed out that a power of attorney is
private, without any oversight by a court.
MR. HELANDER said that state laws are often unclear about the
duty owed by the agent to the principal. This combination of
broad authority, lack of oversight, and unclear duties makes it
possible for agents to misuse their authority. He said power of
attorney abuse, often called a "license to steal," is a form of
financial exploitation. To help curb this type of elder
financial exploitation, AARP supports state efforts to expand
the power of attorney laws by adopting reforms at least as
stringent as those outlined in the uniform power of attorney
act. The act contains provisions that aim to promote autonomy
and to prevent power of attorney abuse. The most important of
these provisions pertain to the "hot powers." Under the current
statute, the principal gives blanket consent to these powers
with a signature unless they intentionally cross them off a
list. This bill, following the uniform power of attorney
format, requires the principal to opt in by initialing each
specific power. This action requires careful consideration as
to the duties being delegated to the agent and lessens the
opportunity for exploitation. Additionally, this bill more
clearly defines the responsibilities of the agent to protect the
interests of the principal and it sets out guidelines for third
party acceptance. He concluded that the AARP supports HB 254,
Version U, and believes it will strengthen protection of
vulnerable adults in Alaska. He said that 13 states have
enacted the Uniform Power of Attorney Act, with Hawaii and Iowa
awaiting their respective governor's signatures to become the
14th and 15th states. Connecticut and Kansas are also
considering these changes. He encouraged committee members to
help include Alaska on this growing list.
4:14:11 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 254.
CHAIR OLSON removed his objection.
REPRESENTATIVE JOSEPHSON said he thinks this is a good bill. He
referred to page 3, which requires a principal to initial
certain authorizations that might be a problem if the person is
truly incapacitated and can't initial. He suggested that these
provisions might be dealt with in another committee and aren't a
reason to stop the bill.
4:15:13 PM
REPRESENTATIVE REINBOLD moved to report the proposed committee
substitute (CS) for HB 254 labeled 28-LS1057\U, Bannister,
3/6/14, out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, the CSHB
254(L&C) was reported from the House Labor and Commerce Standing
Committee.
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