Yes, as long as both the lady bird deed and the power of attorney meet the statutory requirements for capacity, content, and execution, a power of attorney may be used to execute a lady bird deed.
Capacity: This refers to the state of mind of the individual executing the document. Did the individual have the requisite knowledge and understanding to execute the power of attorney? If the power of attorney is not durable, does the principal still have capacity? Likewise, capacity is required for the agent who executes the deed on behalf of the principal. Although a lady bird deed is somewhat testamentary in nature, the minimum capacity necessary for its execution is the same as what is necessary for the execution of deeds, not wills, which have a lower requisite minimum.
Content: The power of attorney you use to execute a deed on behalf of another person must legally authorize the agent to convey real estate of the principal. If it does not give this authority, then it cannot be used to execute a lady bird deed. Likewise, if there is a power of attorney used to execute a deed, the deed must contain specific language alluding to the use of the power of attorney, must be executed in a particular way, and should be recorded with proof of the agent's authority.
Execution: A power of attorney must be executed in accordance with the requirements of the jurisdiction in which it was executed. Some states have more stringent requirements than others, including the requirement for multiple disinterested witnesses and/or notarization of the principal's signature. If the power of attorney was executed properly in another state or foreign jurisdiction but does not meet the requirements for execution in the state or jurisdiction in which it is intended to be used, additional steps may be necessary to validate the power of attorney.
Lady bird deeds are subject to the same statutory execution requirements as other deeds in the jurisdiction. Additional steps are necessary to execute a deed using a power of attorney on behalf of a grantor.
Additional concerns: While you may be authorized to execute a lady bird deed using a power of attorney, every agent using a power of attorney must be cognizant of her fiduciary responsibilities to the principal. Particularly, the agent is responsible for carrying out the intent and wishes of her principal and has a duty to ensure that each act made meets this standard. For example, if the principal has a duly executed and valid will that purports to devise a property to two children, but the agent executes a lady bird deed in giving a remainder interest to only one child, absent some clear instruction from the principal the exercise of that power will be considered a breach of fiduciary and could be found to be an action taken outside of the scope of the agent's authority.
Another concern is whether a lady bird deed is appropriate for your principal's estate plan. There are other tools available that may be a better fit. While a lady bird deed can be extremely helpful, it does little to allow for contingencies in the event the principal's intended beneficiary predeceases them or passes simultaneously with the principal.
Speak with an attorney to ensure that all requirements are met in the deed and power of attorney before attempting to execute a lady bird deed with a power of attorney.
Published: Nov 8, 2022
Updated: Nov 24, 2022