Tax Regulation of Intimacy by Contract: Transfer Tax Aspects of Powers of Attorney.

Powers of attorney may be among the most common and the most abused of all estate planning devises. Under a typical durable general power of attorney, the attorney-in-fact typically has the ability to act on behalf of the principal on almost all affairs. Neither the creation nor exercise of such a power usually gives rise to taxable transfer for U.S. federal estate and gift tax consequences. These wealth transfer tax outcomes hinge in large part on the recognition of the fiduciary limitation on an attorney-in-fact's powers, a limitation that has been rejected by the Internal Revenue Service in other contexts. This paper explores and interprets proposals to commodify the principal/attorney-in-fact relationship against the backdrop of other U.S. cultural practices of outsourcing work that a person cannot find willing and able family members to do, but the person cannot (or will not) do himself or herself. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]