Statute text
(1) In this section, a gift "for the benefit of" a person includes a gift to a trust, an account under the federal "Uniform Transfers to Minors Act", and a tuition savings account or prepaid tuition plan as defined under Internal Revenue Code section 529, 26 U.S.C. sec. 529, as amended.
(2) (a) Unless the power of attorney otherwise provides, language in a power of attorney granting general authority with respect to gifts authorizes the agent only to:
(I) Make outright to, or for the benefit of, a person, a gift of any of the principal's property, including by the exercise of a presently exercisable general power of appointment held by the principal, in an amount per donee not to exceed the annual dollar limits of the federal gift tax exclusion under Internal Revenue Code section 2503 (b), 26 U.S.C. sec. 2503 (b), as amended, without regard to whether the federal gift tax exclusion applies to the gift, or if the principal's spouse agrees to consent to a split gift pursuant to Internal Revenue Code section 2513, 26 U.S.C. sec. 2513, as amended, in an amount per donee not to exceed twice the annual federal gift tax exclusion limit; and
(II) Consent, pursuant to Internal Revenue Code section 2513, 26 U.S.C. sec. 2513, as amended, to the splitting of a gift made by the principal's spouse in an amount per donee not to exceed the aggregate annual gift tax exclusions for both spouses.
(b) Paragraph (a) of this subsection (2) does not apply to, or affect by inference or otherwise, a power of attorney in existence on December 31, 2009, unless, on that date, this part 7 applies to the power of attorney as provided in section 15-14-745 (2).
(3) An agent may make a gift of the principal's property only as the agent determines is consistent with the principal's objectives if actually known by the agent and, if unknown, as the agent determines is consistent with the principal's best interest based on all relevant factors, including:
(a) The value and nature of the principal's property;
(b) The principal's foreseeable obligations and need for maintenance;
(c) Minimization of taxes, including income, estate, inheritance, generation-skipping transfer, and gift taxes;
(d) Eligibility for a benefit, a program, or assistance under a statute or regulation; and
(e) The principal's personal history of making or joining in making gifts.
History
Source: L. 2009: Entire part added, (HB 09-1198), ch. 106, p. 410, 1, effective April 9. L. 2011: (2) amended, (SB 11-083), ch. 101, p. 311, 23, effective August 10.
Annotations
OFFICIAL COMMENT
This section provides default limitations on an agent's authority to make a gift of the principal's property. Authority to make a gift must be made by a specific grant in a power of attorney (see Section 15-14-724(1)(b); see also Section 15-14-741). The mere granting to an agent of authority to make gifts does not, however, grant an agent unlimited authority. The agent's authority is subject to this section unless enlarged or further limited by an express modification in the power of attorney. Without modification, the authority of an agent under this section is limited to gifts in an amount per donee not to exceed the annual dollar limits of the federal gift tax exclusion, or twice that amount if the principal and the principal's spouse consent to make a split gift.
Subsection (1) of this section clarifies the fact that a gift includes not only outright gifts, but also gifts for the benefit of a person. Subsection (1) provides examples of gifts made for the benefit of a person, but these examples are not intended to be exclusive.
Subsection (3) emphasizes that exercise of authority to make a gift, as with exercise of all authority under a power of attorney, must be consistent with the principal's objectives. If these objectives are not known, then gifts must be consistent with the principal's best interest based on all relevant factors. Subsection (3) provides examples of factors relevant to the principal's best interest, but these examples are illustrative rather than exclusive.
To the extent that a principal's objectives with respect to the making of gifts may potentially conflict with an agent's default duties under the Act, the principal should carefully consider stating those objectives in the power of attorney, or altering the default rules to accommodate the objectives, or both. See Section 15-14-714 Comment.
Annotations
OFFICIAL GENERAL COMMENT
Subpart 3 provides a concise, optional statutory form for creating a power of attorney under this Act (Section 15-14-741). With the proliferation of power of attorney forms in the public domain, the advantage of a statutorily-sanctioned form is the promotion of uniformity in power of attorney practice. In states such as Illinois and New York, where state- sanctioned statutory forms have existed for many years, the statutory form is widely used by both lawyers and lay persons. The familiarity and common understanding achieved with the use of one statutory form also facilitates acceptance of powers of attorney. In the twenty years preceding this Act, the number of states with statutory forms has increased from only a few to eighteen.
In addition to the statutory form power of attorney, Subpart 3 provides an optional form for agent certification of facts pertaining to a power of attorney (Section 15-14- 742). Pursuant to Section 15-14-719, a person may request an agent to certify any factual matter concerning the principal, agent, or power of attorney. The form in Section 15-14-742 is intended to facilitate agent compliance with these requests. The form lists factual matters about which persons commonly request certification (e.g., the principal is alive and has not revoked the power of attorney or the agent's authority), and provides a designated space for certification of additional factual statements. Both the statutory form power of attorney and the agent certification form may be tailored to accommodate individual circumstances and objectives.