South Dakota

Finance

Instrument: Power of Attorney (POA)

What is it for?
The “power of attorney” (POA) allows an adult (the “principal”) to authorize another person (the “agent”) to make decisions concerning the principal’s property.

What does it do?
The POA empowers the agent to be able to make decisions and act with respect to the principal’s property. Unless the POA expressly limits the agent’s authority, the agent is granted authority over a broad range of matters, including managing the principal’s money, receiving government benefits, entering into contracts, and pursuing legal claims. S.D. Codified Laws § 59-12-23. A POA, however, does not authorize an agent to make health care decisions for the principal. S.D. Codified Laws § 59-12-2(2).

To be considered “durable,” which means that the agent’s authority continues during a period when the principal lacks capacity, the POA must contain such words as, “This power of attorney shall not be affected by disability of the principal,” or “This power of attorney shall become effective upon the disability of the principal,” or similar words showing the intent of the principal that the agent’s authority will remain in effect during a period of the principal’s incapacity. S.D. Codified Laws § 59-12-3.

In making decisions for the principal, the agent must act in good faith, only within the scope of the authority granted in the POA, and in accordance with the principal’s known expectations and in the principal’s best interest. S.D. Codified Laws § 59-12-13.

Third parties must generally accept decisions made by the agent as if the principal had made them. They may, however, request the agent for a certification of the POA’s validity prior to relying on the agent’s authority. S.D. Codified Laws § 59-12-19.

How does one make it?
A POA generally must be in writing, signed by the principal or in the principal’s conscious presence by another individual at the principal’s direction, and notarized. S.D. Codified Laws § 59-12-4.

When does it come into effect?
A POA can state that the agent’s authority begins either immediately upon execution, at a future date, or upon the occurrence of a future event, such as the principal’s incapacity. S.D. Codified Laws § 59-12-8(1).

If a POA becomes effective upon a future date, occurrence, or event, the principal may designate one or more persons to determine that the future date, occurrence, or event has occurred in writing. Absent a designation of who will determine the principal’s incapacity, this determination may be made by a physician or licensed psychologist who has evaluated the principal. S.D. Codified Laws § 59-12-8(3)(a).

For the purpose of this determination, “incapacity” means the principal is unable to manage their property or business affairs for two main reasons due to an impairment in the ability to receive and evaluate information or make or communicate decisions even with the use of technological assistance. S.D. Codified Laws § 59-12-1(5)(a).

How long does it last?
A durable POA generally lasts until the principal or agent dies; the principal revokes the POA; the POA provides that it terminates upon some future date or event; the purpose of the POA is accomplished; or the agent’s authority is revoked. S.D. Codified Laws § 59-12-9.

How does one end it?
The principal may revoke the POA by signing, dating, and notarizing a written revocation document. A sample revocation form is provided at S.D. Codified Laws § 59-12-43.

What does an example look like?
South Dakota provides a statutory POA form at S.D. Codified Laws § 59-12-41. An agent’s certification form is provided at S.D. Codified Laws § 59-12-42.

What else should one know?
South Dakota’s POA is based on the UPOAA.

Last updated November 2022