Brian, a friend of mine has power of attorney for her incompetent mom. Can she transfer the house to herself and then sell?

Probably not.  This question raises several important points regarding powers of attorney.

First, we need determine whether the power allows the attorney-in-fact (the donee of the power) to act during the donor’s incompetency (disability).  In  Virginia a power of attorney does not survive disability unless it specifically says it does (which is why you’ll see such powers sometimes called “durable” powers of attorney).

Second, the attorney-in-fact is a fiduciary.  The Virginia Supreme Court says that in such a situation “any transaction to the benefit of the "[fiduciary] and to the detriment of the other is presumptively fraudulent” and that “the burden is on the [fiduciary] to overcome the presumption of constructive fraud by clear and convincing evidence.”  This is referred to as self-dealing.

That is tough language, and as a result a title insurance company will be loathe to insure title where this has occurred in the chain.  It is possible, of course, depending on the specific facts and the specific language of the power to overcome the problem, which is why the answer is not an outright no.

Please be careful where there has been such a transfer (or will be) and have the client get legal advice beforehand.

I’m here if you need me.