The New South Carolina Uniform Power of Attorney Act

On June 9, 2016, South Carolina became the 21st state in the country to enact a version of the Uniform Power of Attorney Act ("UPAA") when Governor Nikki R. Haley signed the South Carolina Uniform Power of Attorney Act ("SCUPAA"). The UPAA was approved by the National Conference of Commissioners on Uniform State Laws in 2006 and was intended to provide a simple way for people to deal with their property through the use of a power of attorney in case of their future incapacity.

A power of attorney creates an agency relationship in which a principal appoints or nominates an agent to perform certain functions dealing with the principal's property or finances. Under general agency principles, because an agent's authority stems from the principal, such authority would typically terminate when the principal became incompetent to act. For decades, South Carolina has recognized a durable power of attorney, which continues the agent's authority even after the principal becomes incompetent. However, because many states passed non-uniform statutes to deal with issues relating to powers of attorney, the UPAA was intended to provide uniformity on these issues and therefore enhance the usefulness of durable powers of attorney.

The SCUPAA, which has an effective date of January 1, 2017, is comprised of three (3) parts, which are based significantly on three of the UPAA's four (4) articles.

Part 1 of the SCUPAA contains general provisions relating to the creation and use of a power of attorney. While most of the provisions in Part 1 are default rules that can be altered by the power or attorney, there are certain mandatory provisions in Part 1 that are designed to serve as safeguards for the protection of the principal, the agent and those who are asked to rely on the agent's authority. An important provision in Part 1 is that a power of attorney created after January 1, 2017 is durable unless the power of attorney expressly provides otherwise. Another important provision in Part 1 provides that after the principal's incapacity, an agent may exercise the authority granted under the power of attorney only if the power of attorney has been recorded in the same manner as a deed in the county where the principal resides at the time the instrument is recorded.

Part 2 of the SCUPAA identifies certain acts that must be granted with express language because of the risk such acts pose to the principal's property and estate plan. Some of these acts, just to include a few, include making gifts, creating or changing rights or survivorship or beneficiary designations, and accessing a safe deposit box leased by the principal. In addition, Part 2 describes certain acts of general authority with respect to the following subject matters and which may be incorporated by reference in the power of attorney: real property; personal property; banks and financial institutions; operation of an entity or business; insurance and annuities; estates, trusts and other beneficial interests; claims and litigation; personal and family maintenance; benefits from government programs or civil or military service; retirement plans; taxes; and gifts.

South Carolina did not adopt Article 3 of the UPAA, which contains an optional statutory form of power of attorney. Therefore, Part 3 of the SCUPAA is reserved for possible future use.

Part 4 of SCUPAA contains provisions regarding the relationship of SCUPAA to other law and pre-existing power of attorney. In general, while the SCUPAA applies to a power of attorney created on or after the January 1, 2017, the applicable law in effect before January 1, 2017 applies to a power or attorney created or restated before January 1, 2017. The SCUPAA also contains rules regarding procedural provisions in judicial proceedings concerning powers of attorney.

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