Power of Attorney for trustee?

[K2retire]

We have been contacted by an individual who claims to have a power of attorney from the sole trustee of a 401(k) plan that we administer. We have not yet seen the document.

I thought that long ago I had heard that one can give a power of attorney as to one's personal affairs, but not as to one's fiduciary duties. Is that correct?

[Guest arendedric]

Power of Attorney provides the right to have the word like that being said by the person in question. It gives the right to take all the decisions on behalf of the person who has granted the power of attorney. This means that he will have all the rights to take the decision that has to be taken by the person. Though, there are some restriction I think that those are related to very serious matter and differs from person to person. Now, I hope this would solve your doubt but in case you have any could you brief a little bit about the question you have, as I quite didn't understand what you meant by the term "personal affairs and fiduciary duties" related to power of attorney.

[K2retire]

We are wondering if the person holding the power of attorney can truly act as trustee of the qualified plan. He wishes to amend the plan provisions.

[rcline46]

A TRUSTEE almost never has the right to amend a plan.

[Everett Moreland]

K2retire:

Probably the way to think about this is in terms of delegation of the trustee's powers in accordance with the terms of the plan. If the plan allows the trustee to amend and to delegate the power to amend, then the next question is whether the power of attorney delegates the power to amend in accordance with the terms of the plan. My starting assumption would be that the power of attorney would need to name the plan and state that the power to amend is delegated. If the power of attorney is merely a general power of attorney, and does not name the plan and state that the power to amend is delegated, I doubt a court would treat the power of attorney as adequate to allow the agent to amend.

[K2retire]

Thank you Everett. I believe that what this individual has is a general durable power of attorney from his parent who is both the business owner and trustee of the plan. We have not yet heard any more about why he wants to make these changes or whether or not the business owner/trustee is in some way incapacitated.

[Mike Preston]

Some POA's require that the maker be incapacitated. Some do not. Some state laws override the specific language in the POA. My guess is that ERISA pre-emption wouldn't apply in this case and therefore the state with jurisdiction holds sway over the decision.

If in doubt, I would say that you would want to check with counsel of course. In my experience, many financial institutions believe that notwithstanding what the law of a particular state says and notwithstanding what a specific POA says, they hold to the opinion that it is their exclusive right to allow or not allow a POA to exercise authority. That is, they treat the POA only as a suggestion. When pressed, they will say that if something is that critical then they want to see guardianship appointed by the courts.

For those of us who have agreed to an appointment as POA and undertake the sometimes significant effort of assisting someone who is elderly in managing their affairs, it is a frustrating road. So, I would say, whatever you decide to do, please be kind to this individual who is, I would hope, trying to just do the right thing by the maker.

[K2retire]

For those of us who have agreed to an appointment as POA and undertake the sometimes significant effort of assisting someone who is elderly in managing their affairs, it is a frustrating road. So, I would say, whatever you decide to do, please be kind to this individual who is, I would hope, trying to just do the right thing by the maker.

Personallly, I've been there also. (And it was great fun delivering the news to my boss that his incapcitated uncle whose net worth was in the tens of millions had given me, rather than him, a power of attorney.)

I doubt that will hold much wieght with the institution where I am employed, however.

[Ron Snyder]

Trustee serve at the will of settlors or trustors. They grant certain powers to the named trustee in the trust agreement. The power to appoint or designate someone else to wield trustee powers, or some trustee powers, must be set forth in the trust agreement. If it isn't there, the trustee cannot grant the POA.