Financial Power of Attorney
A financial power of attorney in Nebraska is a legal document that grants authority to an agent to act on behalf of the principal in matters relating to the principal's property. This includes the ability to make decisions and act with respect to the principal's property, whether the principal is able to act for themselves or not. The Nebraska Uniform Power of Attorney Act (NUPOAA) governs the use of powers of attorney in the state. The Act strictly construes powers of attorney and discounts broad, encompassing grants of power.
The Act also limits gifts made via a general grant of authority in two ways: the gifts must not exceed the annual dollar limits of the federal gift tax exclusion, and the agent must determine that the gift is consistent with the principal's objectives or best interest based on several factors. The agent, also known as the attorney in fact, is granted authority to act for a principal under a power of attorney. The principal is the individual who grants this authority. The property in this context is defined as anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest or right therein.
It is important, however, to note that Nebraska law is concerned with the potential for abuse and fraud when a fiduciary has broad powers to control another person's property. If an attorney in fact uses the principal's power of attorney to make a gift of the principal's assets to themselves or to a third party with a close relationship to the attorney in fact, the law presumes constructive fraud. The burden then shifts to the fiduciary to demonstrate that the gift was made pursuant to power expressly granted in the power of attorney document and made pursuant to the clear intent of the donor.
The Bottom Line:
A financial power of attorney is a legal instrument that allows an individual, the principal, to grant another person, the agent, the authority to manage their property. This authority is governed by the Nebraska Uniform Power of Attorney Act, which provides specific limitations and protections to prevent abuse and fraud.
