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Wednesday, May 20, 2020

If I appoint my sibling my POA, can the sibling's spouse claim anything of mine on divorce?

I've received an interesting question from a reader about the possibility of the spouse of his appointed POA getting access to assets on divorce from the appointed POA. I'm pretty sure I haven't discussed this before on this blog, so thanks to the reader for bringing up such an interesting angle. Here arethe question and my remarks:

"I am planning to assign Power of Attorney to my sibling, but my sibling is in the middle of separation/divorce. If my sibling becomes the POA for my property, can their spouse come and fight for my property and ask for a share of it since my sibling is the POA of it? Will making my sibling the POA give their spouse any chance in making connection with my property and in turn benefit the spouse in any way or shape or form?"

I'm really glad to see people asking questions before simply signing paperwork that creates legal relationships and transfers significant legal authority to other people. It's a much better idea than signing something first and not questioning it until a problem hits you in the face. Even if you would have been safe signing the paperwork, it is worthwhile to ask the questions to gain peace of mind.

You haven't specifically said that the POA you are contemplating is an enduring type of POA, but I'm going to answer your questions as if you had said so. This is because an enduring POA is by far the most common document that my clients make, and therefore is more likely the type you are probably talking about. Also, it is a more far-reaching document than a simple, business POA so it is, again, more likely the type you are interested in having prepared.

In your case, the short answer to all of your questions is "no".

When you appoint someone as your attorney under your POA document, you are granting them access to your assets. You are granting them a lot of power to deal with them. But this is not done in a legal vacuum; there are rules and laws that exist to govern that legal authority, even if the document itself doesn't spell them out. The nature of the power of attorney role is not one of ownership; it's one of access, trust, and agency. In other words, the person acting for you may only use your assets for YOUR purposes and for YOUR benefit.

Because your sibling will not become an owner of anything of  yours, his or her spouse does not become entitled to claim anything. You are not the one getting divorced so your assets are not eligible in any way to be split in someone else's divorce.

I'm assuming, of course, that your sibling will do things properly and legally. A big mistake that your sibling could make, and that could tangle up the question of whether their spouse can enter the picture, is putting his or her name on your assets. If that occurs, the whole picture may change.

There is, and should continue to be, a strict separation between your assets and those of your appointed attorney. Your sibling should never mix your assets with theirs. Ever. No joint accounts. No putting the sibling's name on your property of any kind. If the bank suggests that a joint account would be easier, your sibling should refuse. When there is a POA in place, there is no need whatsoever for the sibling's name to be put on any assets of yours because the POA document provides the access your sibling needs.

A power of attorney document has limits on what an appointed attorney may do. One of the rules built into the role is that a person acting under a POA may not benefit from the role in any way other than what is specifically allowed by the document. The vast majority of POA documents do not contemplate any benefit at all going to the attorney, including payment for their time and effort. Therefore, the sibling/attorney's spouse could not successfully argue (in my opinion) that there was some hidden financial benefit to the sibling/attorney under the document to which the spouse was entitled to divide on divorce.

Some suggestions for your document might be to state outright that your appointed attorney may not benefit from the role, and to name an alternate attorney in the event that your sibling cannot continue to act as your attorney for any reason.

As long as your appointed attorney (your sibling) is careful and makes no mistakes with the ownership of your assets, you should have no worries about your sibling's spouse being involved in any way.

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