An Arkansas durable statutory power of attorney form is a legal document that allows someone (the “principal”) to designate a trusted person (the “agent”) to make financial decisions on their behalf.
The document stays in effect even if the principal becomes incapacitated – that is if they become unconscious or suffer from dementia, whereas a non-durable power of attorney does not.
Laws
All power of attorney forms in the state are durable by default.
- Statute: Title 28, Subtitle 5, Chapter 68 (Uniform Power of Attorney Act).
- Presumed Durable: Yes (§ 28-68-104).
- Signing Requirements: The principal’s signature is required without witnesses.
- Notarization: Signature presumed genuine if acknowledged before a notary public (§ 28-68-105).
- Statutory Form: Yes (§ 28-68-301).
Definitions
Durable – In the context of a power of attorney, “durable” signifies that it remains in effect even if the principal becomes incapacitated (§ 28-68-102(2)).
Power of Attorney – A “power of attorney” refers to a document or record that confers authority upon an agent to act on behalf of the principal, regardless of whether the specific term power of attorney is used (§ 28-68-102(7)).
Specific Powers and Limitations
Restrictions on Gifts and Transfers
A DPOA allows the agent to manage the principal’s finances, but there are limitations on their gift-giving authority according to Ark. Code § 28-68-217:
Types of Gifts:
- Gifts “for the benefit of” a person: Contributions to a trust, an account governed by the Uniform Transfers to Minors Act, and a tuition savings account or prepaid tuition plan outlined in Internal Revenue Code Section 529, 26 U.S.C. Section 529.
- Outright gifts to individuals: The agent can directly transfer ownership of the principal’s property (money, assets, etc.) to another person (the donee). The value of each gift cannot exceed the annual federal gift tax exclusion limit set by the IRS. This limit is subject to change, so the actual amount may be higher depending on the current tax code.
- Consent to splitting gifts made by the principal’s spouse: The agent can consent to split gifts with the principal’s spouse, potentially doubling the allowed gift amount per recipient (if the spouse agrees).
Considerations:
- Maintaining financial security and any foreseeable obligations before making gifts.
- Avoiding favoritism and acting in the principal’s best interests.
- The specific circumstances surrounding the DPOA’s creation can influence the scope of permissible gifting.
- The impact of the gift on the tax burden, including income, estate, and gift taxes.
- Eligibility for benefits, programs, or assistance under statutes or regulations.
- The principal’s personal history of making or joining in making gifts.
Agent’s Authority Limitations
As established in Ark. Code § 28-68-201, the agent may only act if expressly authorized by the power of attorney and if not prohibited by other relevant agreements or instruments. The agent cannot further delegate their power to another person unless allowed.
If the agent isn’t a close family member (ancestor, spouse, descendant) of the principal, they cannot use their power to create an interest in the principal’s property for themselves or someone they financially support. The agent must comply with all applicable laws and regulations when exercising their authority and cannot engage in any actions that are illegal or contrary to state or federal law.
Revocation and Termination
There are several scenarios for the termination of a DPOA or agent’s authority (§ 28-68-110):
- When the principal dies.
- The principal can revoke it at any time by executing a written revocation document.
- If it contains provisions specifying termination criteria or if its purpose is accomplished.
- The principal can revoke the agent’s authority at any time or if the agent dies, becomes incapacitated, or resigns without a successor agent named.
When the agent is also the principal’s spouse, their authority may end if legal actions are filed regarding the dissolution or annulment of the agent’s marriage to the principal or their legal separation.
Executing a new DPOA does not automatically revoke a previously executed one unless specifically stated in the new document.
Safekeeping and Registration
While there isn’t a statewide registry specifically designated for durable powers of attorney, there are important steps to consider for safekeeping and documentation:
- Keep the original document in a safe and secure location, such as a safe deposit box, a home safe, or with a trusted attorney or advisor.
- Inform trusted individuals, including the named agent(s), family members, and the principal’s attorney, about the existence and location of the document.
- Consider creating duplicate copies for additional safekeeping. These can be distributed to trusted individuals or stored in different secure locations.
- Review the form periodically to ensure it still reflects the principal’s wishes and that the named agent(s) are still appropriate choices.
Some counties may offer the option to record legal documents, including DPOAs, with the county clerk’s office, which can provide an additional layer of protection.
Additional Resources
- State Bar Association Website: A wealth of information for the public, including resources on powers of attorney.
- Arkansas Law Help: This legal aid organization may provide legal assistance or related information for individuals who qualify based on income and other eligibility criteria.
