The law sometimes appears to contradict itself. Specifically, the words “anything and everything” do not always legally mean “anything and everything”.
Imagine a waitperson taking an order in a restaurant. A customer says, “You can bring me anything to drink.” Upon delivering an iced tea, the customer says, “’Anything’ does not include iced tea.”
Presume, too, that the customer then empowers the waitperson to bring the customer iced tea. However, when the waitperson returns with sweetened iced tea, the customer says, “The permission to bring me iced tea only included the power to bring me unsweetened iced tea.”
Such an experience illustrates a unique aspect of Ohio law regarding powers of attorney.
A power of attorney is signed by a person — called a principal — who grants all or part of that principal’s decision-making power or authority to another person — called an agent.
Powers of attorney, particularly global or comprehensive ones that grant an agent the ability to do anything and everything that a principal can do, should be pretty simple and straightforward.
It stands to reason that a principal should be able to sign a piece of paper that states, “I want my agent to be able to do anything and everything I can do.” And many principals sign powers of attorney with this language.
However, as a matter of law, stating “anything and everything” in a power of attorney does not include anything and everything.
A power of attorney that grants global or comprehensive authority to an agent must have some of its powers expressly — explicitly, clearly and specifically — granted in order for those powers to be granted in the power of attorney.
The following powers — along with several others — in a power of attorney must be expressly granted in order for the agent to exercise those powers for a principal:
• To create, amend, revoke or terminate a trust,
• To make a gift and
• To change a beneficiary designation on an account or life insurance policy.
If these specific powers are not expressly granted in a power of attorney — even if the power of attorney states that the agent can do anything and everything that the principal can do — the agent cannot exercise those powers.
To create even more complexity, if a power of attorney specifically empowers the agent to give — as a gift — the principal’s property to other people or to the agent himself or herself, the power to gift is limited to $16,000 of value of the principal’s assets to any one person in any one year—unless the power of attorney expressly states that the power to gift can exceed that $16,000 annually.
These legal requirements are intended to embody and make law most people’s common-sense limits that people would presume that every agent would understand and be bound by.
Powers of attorney that do not expressly grant the powers that must be expressly granted cause very significant challenges and limitations, particularly in the context of nursing home and Medicaid planning, because such planning almost always includes some gifting or the creation or amendment of trusts.
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at [email protected] or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.