Can a Power of Attorney Deed Property to Himself?

by Marie Murdock

A power of attorney is a document whereby a person, known as the principal, appoints another person, known as an agent or attorney-in-fact, to act on her behalf. People often refer to the agent as the power of attorney. It may be possible in certain states for an agent to convey property to herself when given express authority by language in the power of attorney. An agent should exercise caution before doing so, however, as she may later be required to prove that the conveyance was authorized and in the principal’s best interest.

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Uniform Power of Attorney Act

Several states have adopted a form of the Uniform Power of Attorney Act which allows a principal to deed property to herself using the power of attorney only if the power of attorney specifically provides for that action under its provisions. Also, unless otherwise provided, the agent must be an “ancestor, spouse or descendant” of the principal to deed property to herself.

State Law Prohibits

One of the most important things an agent should determine before engaging in this behavior is whether it is allowed under state law. For instance, Chapter 58, Article 6 of Kansas Statutes states that an attorney-in-fact is to “avoid self-dealing and conflicts of interest.” Even in states which have passed a uniform act, unless the power to gift to oneself is specifically set out in the power of attorney, the agent may be cautioned as in Alabama Code Section 26-1A-114, Item b(2) against creating a “conflict of interest that impairs the agent’s ability to act impartially. “Also, powers of attorney executed before a uniform act was passed may not be subject to its laws. The principal may have to prepare an updated power of attorney to grant self-conveying authority.

Fraudulent Conveyances

Even if state law and the power of attorney authorize such an action, a disgruntled relative may still choose to challenge the conveyance in the courts as being fraudulent and self-serving, feeling cheated out of his inheritance. Also, if the principal should be transferred to a nursing home within a short time after the conveyance and apply for Medicaid, that agency may refuse to allow benefits and challenge the conveyance as an attempt to deplete the assets of the principal to avoid paying for medical care.

Limitations and Expiration

The agent should be very familiar with the terms of the power of attorney and also know under what circumstances he no longer has authority to act. A person may assume that a power of attorney takes the place of a will and attempt to deed property to himself after the principal’s death because he would be entitled to inherit property through probate anyway. Powers of attorney terminate, however, upon the death of the principal. Further, if a power of attorney was specific to a particular piece of property for which the agent had authority for self-conveyance, those powers would not extend to other property owned by the principal. Some powers of attorney also have an expiration date stated in the document after which time the agent is no longer authorized to act.