A power of attorney names someone to act as your agent. The agent may only take those actions expressly provided for in the power of attorney. For instance, you might sign a power of attorney authorizing your agent to sell your house. This does not mean the agent can also access your brokerage accounts or amend your will. You have the right to limit the powers that your agent may exercise on your behalf.
Marriage Alone Does Not Create a Power of Attorney
California courts are required to strictly apply the terms of a power of attorney. A recent case decided by a state appeals court in Santa Ana helps illustrate this point. This case sadly involves a man who died while under the care of a hospital. The widow sued the hospital for negligence and wrongful death. The hospital then moved to force the widow to submit her case to binding arbitration.
Health care providers frequently demand that patients agree to arbitration in the event of a malpractice or wrongful death claim. Arbitration often affords injured patients fewer procedural and substantive safeguards compared to the regular court system. It is therefore not uncommon for health care providers to insist a patient sign a binding arbitration clause while he or she is being admitted for care.
In this case, the widow had signed an arbitration agreement presented to her by the hospital. The agreement required submission of “all claims” arising from her husband’s care to an arbitrator. The widow argued the agreement was invalid, as she did not have the legal authority to agree to arbitration on her husband’s behalf.
The husband had a signed power of attorney naming his wife as agent. But as it turned out, the power of attorney only authorized the wife to “direct distributions” from his retirement accounts. The power did not authorize the wife to exercise any further authority, including the ability to bind her husband to a contract.
Nevertheless, the hospital argued that the mere existence of a power of attorney, regardless of what it actually said, somehow authorized the wife to sign the arbitration agreement. The courts did not take this argument seriously. The Fourth District Court of Appeals, affirming a trial judge’s decision denying the hospital’s motion to compel arbitration, noted the hospital’s brief on appeal did not even make an effort to explain why the lower court’s interpretation of the power of attorney was wrong.
The appeals court further explained that, contrary to the hospital’s claims, the mere existence of a spousal relationship does not automatically confer one spouse to act as agent for another. But the “status of marriage cannot substitute for the act of conferring agency to a spouse,” the court said, citing one of its earlier cases on the same subject. Nor was there any “implied” authority for the wife to act on her husband’s behalf, especially given that he was alert and competent the time of his admission to the hospital.
Get Help from a California Estate Planning Lawyer
A power of attorney is designed to give you control over who will make decisions for you. That is why you need to consider all of the implications of naming an agent. An experienced San Diego estate planning attorney can help. Contact the Law Office of Scott C. Soady if you would like to speak with someone today.