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H.B. 247 Enrolled






Sponsor: Merlynn T. Newbold

                  This act modifies and enacts provisions of the Probate Code relating to powers of
                  attorney. It prohibits powers of attorney holders from creating, modifying, or revoking
                  trusts without specific authorization, changing interests in the principal's property, or
                  making loans to the holder of the power of attorney.
                  This act affects sections of Utah Code Annotated 1953 as follows:
                      75-5-501, as last amended by Chapter 14, Laws of Utah 2001, First Special Session
                      75-5-503, Utah Code Annotated 1953
                      75-5-504, Utah Code Annotated 1953
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 75-5-501 is amended to read:
                       75-5-501. Power of attorney not affected by disability or lapse of time -- Agent
                      (1) Whenever a principal designates another his attorney-in-fact or agent by a power of
                  attorney in writing and the writing contains the words "This power of attorney shall not be
                  affected by disability of the principal," or "This power of attorney shall become effective upon
                  the disability of the principal," or similar words showing the intent of the principal that the
                  authority conferred shall be exercisable notwithstanding his disability, the authority of the
                  attorney-in-fact or agent is exercisable by him as provided in the power on behalf of the
                  principal notwithstanding:
                      (a) later disability or incapacity of the principal at law or later uncertainty as to whether
                  the principal is dead or alive; or
                      (b) the lapse of time since the execution of the instrument, unless the instrument states

                  a time of termination.
                      (2) If an attorney-in-fact or agent determines that the principal has become incapacitated
                  or disabled and the power of attorney by its terms remains in effect or becomes effective as a
                  result of a principal's incapacity or disability, the attorney-in-fact or agent shall:
                      (a) notify all interested persons of his status as the power of attorney holder within 30
                  days of the principal's incapacitation, and provide them with his name and address;
                      (b) provide to any interested persons upon written request, a copy of the power of
                  attorney [and a statement of the assets to which the power of attorney applies];
                      (c) provide to any interested persons upon written request, an annual accounting of the
                  assets to which the power of attorney applies, unless the power of attorney specifically directs
                  that the attorney-in-fact or agent is not required to do so; and
                      (d) notify all interested persons upon the death of the principal.
                      (3) All interested persons shall be notified within ten days if the attorney-in-fact or agent
                  changes. The notification shall be made by the new attorney-in-fact or agent who shall then be
                  accountable to the interested persons in accordance with Subsection (2).
                      (4) All acts done by the attorney-in-fact or agent pursuant to the power during any period
                  of disability or incompetence or uncertainty as to whether the principal is dead or alive have the
                  same effect and inure to the benefit of and bind the principal or his heirs, devisees, and personal
                  representative as if the principal were alive, competent, and not disabled, except as provided in
                  Section 75-5-503 .
                      (5) A conservator may be appointed for a principal even though the principal has a valid
                  power of attorney in place. If a conservator thereafter is appointed for the principal, the
                  attorney-in-fact or agent, during the continuance of the appointment, shall account to the
                  conservator rather than the principal. The conservator, pursuant to court order as provided in
                  Subsection 75-5-408 (1)(d), has the same power the principal would have had if he were not
                  disabled or incompetent to revoke, suspend, or terminate all or any part of the power of attorney
                  or agency.
                      [(5)] (6) For the purposes of this section, "interested person" means any person entitled to

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                  a part of the principal's estate from the principal's will or through the intestacy laws, whichever is
                      Section 2. Section 75-5-503 is enacted to read:
                      75-5-503. Power of attorney -- Prohibitions and restrictions.
                      A power of attorney may not be construed to grant authority to an attorney-in-fact or
                  agent to perform any of the following, unless expressly authorized in the power of attorney:
                      (1) create, modify, or revoke an inter vivos revocable trust created by the principal;
                      (2) fund, with the principal's property, a trust not created by the principal or by a person
                  authorized to create a trust on behalf of the principal;
                      (3) make or revoke a gift of the principal's property, in trust or otherwise; or
                      (4) designate or change the designation of beneficiaries to receive any property, benefit,
                  or contract right on the principal's death.
                      Section 3. Section 75-5-504 is enacted to read:
                      75-5-504. Voidable transactions.
                      Any loan, sale, or encumbrance on behalf of a principal with his attorney-in-fact, or with
                  the attorney-in-fact's spouse, agent, or attorney, or any entity or trust in which the attorney-in-fact
                  has a substantial beneficial interest, or any transaction involving the attorney-in-fact which is
                  affected by a substantial conflict of interest, is voidable unless the transaction is approved by the
                  court after notice to interested persons and others as directed by the court.

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