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Power of Attorney Inheritance and Name Change

Power of Attorney Inheritance and Name Change

Nominating a Power of Attorney is a crucial aspect to any Estate Plan. After all, this allows someone to make medical, financial, and other important life decisions on your behalf in the event you are unable to do so. It is important to choose someone you trust for the role, and for them to accept the responsibility.

As you consider who to select, it can be helpful to understand the power of attorney rights and limitations. This will help illustrate exactly what your POA can and can’t do — which can help provide more context as you begin Estate Planning. Keep reading to learn more about the following:

How Does Power of Attorney Work?

Power of Attorney works by allowing someone to make important decisions on your behalf, should you become incapacitated or medically unable to do so. The purpose of officially nominating a POA is to ensure that someone can act on your behalf in a timely manner should they ever need to. Without a POA, your family will typically have to go to court to appoint a guardian to handle these duties.
There are a few different types of POA, but the nomination process for each is similar. You can start by creating a valid Will online and then nominating a Power of Attorney using a state standardized form. They are tasked with putting your needs above their own, making it crucial to select a trusted individual for the role. Once signed and notarized, this paperwork will allow your POA to take action if certain conditions are met.

What Rights Does a Power of Attorney Have?

A Power of Attorney, often referred to as the Agent, has the right to make important life decisions on behalf of the person who nominated them, referred to as the Principal. Here are just some of the power of attorney duties:
• The right to make healthcare decisions, including diagnostics and continuing or stopping medical treatments.
• The right to select and hire doctors or caregivers.
• The right to decide on long-term living arrangements as they relate to medical care.
• The right to open a lawsuit on behalf of the Principal and sign any necessary legal documents.
• The right to receive certain forms of income on behalf of the Principal.
• The right to make personal, business, or investment-related financial decisions.
• The right to open bank accounts, write checks, or sell property for the Principal.
• The right to purchase life insurance policies for the Principal.
What Are the Limitations of Power of Attorney?
• While a Power of Attorney has robust legal rights when it comes to managing the affairs of the Principal, there are certain limitations to be aware of. These limitations are in place to help regulate the role of POA:
• The POA cannot transfer the responsibility to another Agent at any time.
• The POA cannot make any legal or financial decisions after the death of the Principal, at which point the Executor of the Estate would take over.
• The POA cannot distribute inheritances or transfer assets after the death of the Principal.
• The POA cannot change or invalidate your Will or any other Estate Planning documents.
• The POA cannot change or violate the terms of the nominating documents — otherwise they can be held legally responsible for fraud or negligence.
• The POA cannot act outside of the Principal’s best interest.
• The POA cannot make decisions before the document comes into effect — conditions will be outlined with approval of the Agent and Principal.
• The POA cannot be officially nominated unless the Principal is of sound body and mind.
• The POA cannot use the Principal’s assets or money as their own.
• The POA cannot take compensation beyond what is outlined within the POA agreement.

Why Do Names Matter In Estate Planning?

First and foremost, your name matters because you are the one creating the documents. If I have a power of attorney that says it was made by John Jones (instead of John Doe), that document simply won’t work the way I want it to.

Names also matter because your estate planning documents generally list people (1) to make decisions for you during your lifetime, if you cannot, and (2) to receive your “stuff” after your death. That’s really the core of what estate planning means.

Because there is nothing new under the sun, a lot of people have the same or similar names. How does this affect your estate plan? Attorneys often include additional information in estate planning documents to help identify the people named as your beneficiaries or representatives.

For instance, your will might provide, “My house shall be distributed to my only daughter, Mary C. Doe.” Even if Mary changes her name, you can be pretty certain that your executor and the probate court will understand or be able to easily figure out who you are referring to, since she is your only daughter.

That’s the main rule of thumb: As long as anyone can confidently identify the person named in your estate planning document, it is generally alright to leave the document the way it is.

Think of it from a practical perspective. After all, estate planning documents are created to be used. What potential problems could someone have in using your estate plan? If a name change would not cause any problems, then you may not need to change anything.

On the other hand, you want to make sure your estate planning documents work. If a name change could cause problems, delays, or other difficulties, a change can be a good idea.

When You Should Consider Updating Your Estate Plan?

I should go ahead and dispel a common myth: You do not need to amend your estate planning documents anytime something changes in your life. There are a lot of reasons why you should update your estate plan, but you should always talk with an attorney to see if a change is even necessary.

That being said, name changes are a big deal. Here are a few scenarios in which it may be a good idea (or even necessary) to update your estate plan:

Example 1. Let’s say your durable power of attorney appoints your daughter, Mary C. Doe, as your medical attorney-in-fact (i.e., the person who gets to make medical decisions for you). She then gets married and changes her name to Mary Doe Johnson (or Mary D. Johnson). The name change is reflected on her driver’s license and other forms of identification.

If Mary needs to act as your attorney-in-fact (e.g., talk to your doctor, get copies of your medical records, and consent to a medical procedure), will your health care provider recognize her as the person granted that authority in your medical power of attorney?

With medical professionals so concerned about privacy (as they should be), there is a good chance that such a different name could give them pause before talking with your daughter. After all, how do they know that Mary is who she claims she is?

Mary might be able to sort things out — for instance, she could show her marriage license or court papers establishing her name change. But who keeps those documents on them all the time? And considering that a medical power of attorney is often used in connection with emergency situations, you want to work EXACTLY when you need it. No delays.

So in this case, your daughter’s name change might make an estate planning update advisable, to help ensure there will be no problems identifying her.

Example 2. Another situation in which you might want to update your estate planning documents is when your representative or beneficiary has a common (or, at least, not one-of-a-kind) name. This isn’t really due to name change but rather a fact of life.

If your son is named John Smith, how do third parties (a bank, a hospital, a closing company, etc.) know that the John Smith standing in front of them trying to withdraw money from your bank account or trying to access your medical records is the same John Smith named in your documents?

Again, you want your estate planning documents to work when they need to work. Amending your estate plan to include a relationship (“…my nephew, John Smith…”) or a birthday (“…my nephew, John Smith, born January 1, 1980…”) can help clear up any doubts the common name might raise.

Remember earlier when I said that the key with names in estate planning documents is to make sure you provide sufficient clarity so that anyone can confidently identify the beneficiary or representative named? When it comes to common names, consider the opposite:

If a third party might have any doubts that the person named in your estate planning document is the person try to use that document, you may want to update your estate plan to help minimize those concerns.

If you are reading this article and thinking, “Hmm, my last will and testament might be a little vague. I think I’ll write a note on it that provides more information,” — STOP. Making notes, adding language, crossing out words, or making any other changes to might invalidate that estate planning document.

Instead, as with all things legal advice, consult with a qualified estate planning attorney to make sure that any changes are made in the proper way.

Amending a power of attorney (POA)

If you decide that you want to make a change to your POA you will need to tell your estate attorney. The POA can only be amended by you, the granter, if you are capable of making and understanding this decision.
Examples of amendments that can be made are:
Removing power(s) from the POA
Add an attorney, this could either be a joint or a substitute attorney
Adding in power(s) or
Amending powers
Some amendments can be complicated to apply, however this will depend on the extent of the changes you wish to make. It is often easier and it costs the same, for the old POA to be revoked (cancelled) and a new POA registered in its place. Having a new POA may help to avoid any confusion or misinterpretation when an attorney is exercising their powers.
If a registered POA is to be revoked i.e. cancelled, you (the granter) will need to send:
A statement explaining your wishes and
A fully completed revocation certificate (schedule 2)

Types of Amendments

There are 2 types of amendments;
• Simple administrative amendment, or
• Full deed of amendment.

What Is A Simple Amendment?

This covers straight forward administrative amendments, such as a change of name or an address. You will need to provide your attorney with written details of the change that is to be made. It is very important that our records are kept up to date and that you tell us if the granter or any attorney changes address. A form provided if it involves a change of address. The amendment will become effective on the date it’s registered by your attorney.

What Is A Full Deed Of Amendment?

A full deed of amendment covers situations where you, i.e. the granter, wish to add a joint or substitute attorney, or amend the terms of a particular power or add extra powers etc. A fee is charged for registering the amendment.

You will need to inform your attorney about the amendment you want to make in the form of a ‘deed of amendment’. This document can be typed or handwritten. You should state clearly what is to be amended and sign and date the document. There is no set style for this notice. Please remember to specify which POA the amendment applies to. You should be aware that when the amendment is registered, that a copy of your deed of amendment will be attached to the new certificate of registration and copy of the initial POA document.

Some amendments can be complicated to apply, however this will depend on the extent of the changes you wish to make. It is often easier and it costs the same, for the old POA to be revoked and a new POA registered in its place. Having a new POA may help to avoid any confusion or misinterpretation when an attorney is exercising their powers.

Adding A New Attorney

If new attorneys are being added, they will need to confirm in writing that they are willing to act. If they are given continuing powers i.e. financial related powers, they must also confirm they are not currently declared bankrupt. Substitute attorneys only need to provide confirmation when they become active.

When Is An Amendment Not Suitable?

If a POA has been terminated an amendment cannot be made. Situations where a POA is terminated include:
• After the death of a sole attorney where there is no substitute or joint attorney
• After the revocation/cancellation of the full POA
• After the revocation/cancellation of the appointment of a sole attorney where there is no substitute attorney

What Happens if a Beneficiary Is in a Maiden Name?

Individuals often draft their estate plans many years in advance. Wills, trusts, life insurance, retirement accounts, and other legal documents bear the names of beneficiaries, and it’s not unusual for these names to change between the drafting of a document and its enforcement. When a grantor dies, their legal documents might name individuals who have since married, divorced, or even been adopted, therefore having their maiden name changed.

Wills and Trusts

Wills and trusts allow a grantor to name beneficiaries to receive assets after the grantor dies. The law recognizes that life circumstances, including marriage and divorce, result in the changing of maiden names, and the law aims to enforce the wishes of the deceased. If the identity of the intended beneficiary is clear, the law enforces the will or trust regardless of the party’s current name.
This also applies if the document misspells the beneficiary’s name or fails to use the party’s full legal name. It is always best to name all beneficiaries accurately and identify them with further information, which might include their home address and date of birth. Backing up the names with more identifying details allows a court and other parties to find and notify the intended beneficiary as easily as possible.

Other Financial and Legal Documents

Similar to wills and trusts, other financial and legal documents naming beneficiaries seek to transfer the assets to the intended beneficiary upon the death of the original owner of the asset. Often, the document identifies how an individual with a changed named must prove their identity. Beneficiaries must provide the financial institution any documents required to receive the assets as intended. Remember, this process may be new to you, but financial institutions make these types of transfers every day. The institution has individuals whose job it is to make these transfers, not to question or fight an intended beneficiary.

Methods of Proof

When a beneficiary’s maiden name has changed, a marriage certificate or copy of a divorce decree is sufficient to show the name change and prove the party is actually the intended beneficiary. If those documents are not available for some reason, affidavits from disinterested third parties can prove the name change and that the individual is, in fact, the person named as the beneficiary.

In a perfect world, every grantor updates their documents with correct names and addresses. Clarifying the name of the desired beneficiary avoids any possible confusion in the future. In fact, parties should periodically review any estate plan. Grantors should not treat estate plans as something forgotten once executed. However, the law recognizes that updating estate plans and other financial and legal documents is not something on the top of everyone’s to-do list.

The law prefers to connect these dots easily and see that the intended beneficiary receives the assets left to them upon the death of the original owner. A beneficiary whose maiden name has changed can prove their identity by producing a marriage certificate, divorce decree, or affidavit. Once the court sees appropriate documentation, it can distribute the funds, property, or other assets to the desired beneficiary.

Free Consultation For A Power of Attorney

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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