Can generically stated property in a will be sold to the acting Durable Power of Attorney without recourse while the person is still alive?
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Can generically stated property in a will be sold to the acting Durable Power of Attorney without recourse while the person is still alive?
90 year old Mother with early stage dementia has appointed her daughter as Durable Power of Attorney. Her will names distant out of state and contact children as ‘heirs to any remaining property’. Daughter is living in the condo and wants to purchase outright. What are the potential pitfalls?
Asked on May 25, 2016 under Estate Planning, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
It can be sold to the attorney in fact (person with the authority under the POA; also known as the "agent") IF the transaction is a fair one, in the interest of the principal (the person granting the power). That basically means that it must be a market value transaction (possibly slightly under market, since selling to the agent means avoiding marketing, etc. costs--that saving can be factored in). If it's for significantly less than market value, then the agent violated her fiduciary duty to her principal and engaged in "self dealing" (putting her interests ahead of those of the principal); if that happens, she could be sued by other interested parties (such as someone who would otherwise stand to inherit) or by someone looking to act on your mother's behalf and protect her from a transaction which is not in her interest.
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