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Under Tennessee law a power of attorney document
is available to provide an individual with great powers to handle many aspects
of the grantor’s life. Specifically, T.C.A.
§ 34-6-109 outlines the powers of a power of attorney under Tennessee law. Usually this is used when an individual
becomes incompetent and lacks mental capacity to make decision for themselves.
The recent Tennessee Court of Appeals
decision of Tamala
Teague v. Garnette Kidd, No. E2011-02363-COA-R3-CV, 2012 WL 5869637 (Tenn.Ct.App.
2012) discussed the relationship between the grantor of a power of
attorney and the attorney-in-fact. The
Tennessee Court of Appeals found:
The execution and
exercise of a power of attorney establishes a fiduciary relationship between
the attorney in-fact and the grantor of the power. The fiduciary is obligated to deal with the
property of his (or her) principle in the utmost good faith. The duties of loyalty and honesty are also a
part of a fiduciaries obligation. In Tennessee, a presumption
of undue influence arises when the dominate party in a fiduciary relationship
receives a benefit from the other party.
This presumption may be rebutted only by clear and convincing evidence
of the fairness of the transaction."
Teague at 7. (Citations omitted). As a result, when someone is the
"attorney-in-fact" as established in a power of attorney document by
a grantor, it is very important to consider the fiduciary responsibilities in
this relationship. This is especially
true when there is any transaction between the two that benefits the
attorney-in-fact. Tennessee law creates
a presumption that in this circumstance when the dominant party (the
attorney-in-fact) receives a benefit from the granting party then such a
transaction is presumed to be the result of undue influence. If this occurs, this can be considered a
breach of the fiduciary relationship.
Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.
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