Recent Legislation: Springing Power of Attorney

From time to time, we will publish blurbs on recent local court opinions and state legislation:

Senate Bill 237

Senate Bill 237 amends ORS 127 and legally sanctions the use of a “springing” power of attorney. This means that a person may execute a power of attorney that indicates by a specific date or occurrence, the power of attorney will become effective. If a person does not indicate a “trigger” event (usually financial or physical incapacity), the power of attorney becomes effective upon execution and remains effective until revoked. 

The bill attempts to place multiple safeguards against abuse of the springing power of attorney. First, the statute allows a person or "principal” to designate in their power of attorney who shall make the determination that the trigger event has occurred. This person does not have to be the same person that will be the agent under the power of attorney. If such a person is designated, the bill provides that this person will be considered the personal representative of the principal for purposes of ORS 192.518 et seq., which deals with state health care information, and 45 C.R.F. 160 & 164, which deal with federal health care information.

Second, if the trigger event is the financial incapability of the principal, but a person is not designated in the power of attorney to make this determination, any physician can make the determination in writing. Once this determination is made, all acts by the agent under the power of attorney on behalf of the financially incapable principal will bind the principal as if he had taken the action himself while financially capable. 

The final substantive amendment to ORS 127 by Senate bill 237 is a clause meant to provide protection for an agent that acts in good faith, but without proper authority. Section three of the bill states that a power of attorney terminates upon a designated event or the death of the principal. But, the power of attorney is still effective, if the agent acts in good faith on behalf of the principal without the knowledge that the terminating event has already occurred. Absent fraud, an affidavit by the agent that states such facts is conclusive proof that the action is binding upon the principal and his heirs, even though the power of attorney was technically no longer in effect. 

Last, this bill applies to all powers of attorney, regardless of whether they were executed prior to the effective date of the bill (January 1, 2010).