BILL NUMBER: SB 1038	CHAPTERED
	BILL TEXT

	CHAPTER  48
	FILED WITH SECRETARY OF STATE  JULY 6, 2010
	APPROVED BY GOVERNOR  JULY 6, 2010
	PASSED THE SENATE  MAY 13, 2010
	PASSED THE ASSEMBLY  JUNE 21, 2010
	AMENDED IN SENATE  APRIL 26, 2010
	AMENDED IN SENATE  APRIL 8, 2010

INTRODUCED BY   Senator Harman

                        FEBRUARY 12, 2010

   An act to amend Section 4231 of, and to add Section 4231.5 to, the
Probate Code, relating to powers of attorney.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1038, Harman. Powers of attorney: duties.
    The Power of Attorney Law creates various duties and requires an
attorney-in-fact to observe the standard of care that would be
observed by a prudent person dealing with property of another, or if
an attorney-in-fact has special skills he or she shall observe the
standard of care that would be observed by others with similar
skills. However, existing law provides that an attorney-in-fact is
not liable for a loss to the principal's property if he or she is not
compensated, unless the loss results from his or her bad faith,
intentional wrongdoing, or gross negligence.
   This bill would delete the latter provision. The bill would
provide that if the attorney-in-fact breaches a duty pursuant to the
Power of Attorney Law he or she is chargeable with interest for any
loss or depreciation in value of the property, any profit made
through the breach, or any profit that would have accrued to the
principal if the loss or profit is a result of the breach. This bill
would allow the court, in its discretion, to excuse the
attorney-in-fact if he or she acted reasonably and in good faith, or
if the court finds that an attorney-in-fact acted in bad faith, he or
she would be held liable for twice the value of the property
recovered.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 4231 of the Probate Code is amended to read:
   4231.  (a) Except as provided in subdivision (b), in dealing with
property of the principal, an attorney-in-fact shall observe the
standard of care that would be observed by a prudent person dealing
with property of another and is not limited by any other statute
restricting investments by fiduciaries.
   (b) An attorney-in-fact who has special skills or expertise or was
designated as an attorney-in-fact on the basis of representations of
special skills or expertise shall observe the standard of care that
would be observed by others with similar skills or expertise.
  SEC. 2.  Section 4231.5 is added to the Probate Code, to read:
   4231.5.  (a) If the attorney-in-fact breaches a duty pursuant to
this division, the attorney-in-fact is chargeable with any of the
following, as appropriate under the circumstances:
   (1) Any loss or depreciation in value of the principal's property
resulting from the breach of duty, with interest.
   (2) Any profit made by the attorney-in-fact through the breach of
duty, with interest.
   (3) Any profit that would have accrued to the principal if the
loss of profit is the result of the breach of duty.
   (b) If the attorney-in-fact has acted reasonably and in good faith
under the circumstances as known to the attorney-in-fact, the court,
in its discretion, may excuse the attorney-in-fact in whole or in
part from liability under subdivision (a) if it would be equitable to
do so.
   (c) If a court finds that a person has in bad faith wrongfully
taken, concealed, or disposed of property belonging to a principal
under a power of attorney, the person shall be liable for twice the
value of the property recovered by an action to recover the property
or for surcharge. The remedy provided in this section shall be in
addition to any other remedies available in law to the principal or
any successor in interest of the principal.