What Can We Learn From Britain’s Richest Family About Power of Attorney Documents

What Can We Learn From Britain’s Richest Family

Srichand Hinduja, the Indian-born billionaire leader of a global business empire and the patriarch of Britain’s wealthiest family, died at the age of 87 this past week. Hinduja, known by his initials, SP, was suffering from dementia and had drafted a power of attorney (PoA) naming his wife and daughters as his agents, to act on his behalf.

SP’s brother challenged the legitimacy of the PoA in Court and due to the lack of consensus as to the responsible party(ies), SP was almost placed in a public nursing home!

So, what can we learn from this $14B family’s feud?

Understanding Power of Attorney Documents

We can discuss the Florida power of attorney (PoA) document. According to the Florida Bar, a PoA is “a legal document delegating authority from one person to another.” It is a legal document, where “the maker of the power of attorney (the ‘Principal’) grants the right to act on the maker’s behalf as that person’s Agent.”

• A “springing” PoA means it takes effect when a certain condition is met.
• In most cases, principals want their PoA to be effective once the principal becomes incapacitated.
• A non-springing or “Durable” PoA goes into effect immediately, when the principal signs the PoA, giving the Agent the ability to act even when the Principal is feeling perfectly fine.

Legal Implications and Safeguards

In October of 2011, the Florida laws were changed and springing PoAs were no longer allowed. My theory is that doctors were getting sued and didn’t want to make the distinction as to WHEN someone was truly incapacitated. So that’s it folks! If you want a PoA, you better be comfortable giving your Agents the ability to act right away.

Since a PoA that takes effect immediately is a bit dangerous in that the Agents can take it to the bank and take out all your money (it’s legal identify theft). For this reason, this is a document we hold very close to our vest. We wouldn’t want to share it with too many people, email it around or have too many copies floating about. We can also protect the document in two ways:

• Do not give a copy of the PoA to the Agent (copies are just as good as the originals for this document).
• Do let your Agent know that the PoA exists, and should anything happen, where to locate the PoA (where you keep your very-important-paper folder); and
• Tell your Agents that you have an attorney, “she’s smart, she’s funny, she’s gorgeous LOL, should anything happen, she has a copy of the PoA.” When they call, I look to make sure they’re a named Agent on your PoA and then send them a digital copy to work with.

Conclusion

So there we have it, we learn all about PoAs and regardless of a family’s wealth, squabbles are inevitable. As to SP’s family, they were able to squash their dispute with a confidential settlement agreement and properly address SP’s health and financial needs prior to his passing.