A Colorado durable statutory power of attorney form allows someone you choose as your agent to make crucial financial decisions for you when you’re unable to do so. Unlike a regular POA, this document (DPOA) stays in effect even if the principal becomes incapacitated and legally can’t make their own decisions.
State law allows the principal to revoke a DPOA at any time. The law also sets out that a divorce, annulment, or legal separation automatically revokes it if the former spouse is named as an agent.
Laws
All power of attorney forms in the state are durable by default.
- Statute: Title 15, Article 14, Part 7 (Uniform Power of Attorney Act).
- Presumed Durable: Yes – on all power of attorney forms created on and after January 1, 2010. Forms created before that date are durable only if the POA is durable under section 15-14-501 or 15-14-745(2) (§ 15-14-704).
- Signing Requirements: The principal’s signature is required.
- Notarization: The document must be signed before a notary public (§ 15-14-705).
- Statutory Form: Yes (§ 15-14-741).
Definitions
Durable – A power of attorney is considered “durable” if it remains valid even if the principal becomes incapacitated (§ 15-14-702(2)).
Power of Attorney – A “power of attorney” represents a legal document granting authority to an agent to act on behald of the principal, whether or not the term power of attorney is used (§ 15-14-702(7)).
Specific Powers and Limitations
Restrictions on Gifts and Transfers
Colo. Rev. Stat. § 15-14-740 outlines restrictions and considerations for gifts made by an agent under a DPOA as follows:
Types of Gifts:
- Gifts “for the benefit of” a person: Includes trusts, “Uniform Transfers to Minors Act” accounts, and qualified tuition plans.
- Outright gifts to individuals: The total value of gifts given to any one person cannot exceed the annual federal gift tax exclusion amount, which is subject to change.
- Consent to splitting gifts made by the principal’s spouse: This allows the agent to make gifts using both spouses’ exclusions, effectively doubling the limit per recipient.
Considerations:
- Value and nature of the principal’s assets.
- Foreseeable obligations and needs of the principal.
- Minimizing tax implications (income, estate, gift).
- Maintaining eligibility for benefits programs.
Agent’s Authority Limitations
The agent can only take actions explicitly authorized by the DPOA document. They must prioritize the principal’s best interests and avoid creating conflicts of interest that could compromise their impartiality (Colo. Rev. Stat. § 15-14-714).
The agent is generally not liable for a decline in the principal’s assets or for decisions made in good faith and with due care, even if they benefit personally.
Revocation and Termination
According to Colo. Rev. Stat. § 15-14-710, a DPOA terminates when:
- The principal dies.
- The principal revokes it – they can revoke the DPOA at any time.
- The document includes a termination clause, ending it end according to those specified conditions.
- The specific purpose it was created for is fulfilled.
Termination of the agent’s authority may occur through:
- Revocation by principal.
- Agent’s death, incapacity, or resignation.
- Marriage dissolution (when the agent is also the principal’s spouse).
A new DPOA doesn’t automatically revoke a previous one unless it explicitly states it does.
Safekeeping and Registration
Colorado does not have a statewide registry for durable powers of attorney. Therefore, it’s crucial to keep the original document safe in a secure location accessible to both you (the principal) and your agent. You can also provide a copy to your attorney or financial advisor for safekeeping.
Some financial institutions might have their own internal procedures for registering the form for their specific accounts. Always make sure to check with your bank, brokerage firm, or other financial entities.
Additional Resources
- State Bar Association: Legal resources and considerations on creating a DPOA.
- Secretary of State: Provides valuable information on DPOAs and their purpose.
