As of July 1st, everyone in Georgia needs a new power of attorney.
On July 1st of this year a new Uniform Power of Attorney Act (UPOAA) was approved and implemented by the Georgia legislature.
The UPOAA set a new standard for financial powers of attorney,
Although it appears that the new power of attorney only sets a new standard, and does not affect the validity of previously-executed forms, there is a chance that the new UPOAA will be interpreted to invalidate forms that predate July 1, 2017. Financial institutions such as banks and brokerage firms may require the new form and no longer accept powers of attorney that are currently valid.
A financial power of attorney allows a person whom you trust and designate to guide and manage your finances. The person named as your financial power of attorney, also called an “agent”, could clear out your bank account, settle a legal claim on your behalf, and the new form even allows agents to change the beneficiary designations of your financial accounts.
Although the form is available online, and there are instructions available, it is hard for a layperson to understand exactly what types of powers the form gives away. We have made a list of a few of the more general and predictable pitfalls below:
1. A witness and notary must simultaneously witness, and also sign this document for it to become effective;
2. If you terminate this new power of attorney, you must file a notice of termination with the Superior Court in the county in which you reside for the termination to become effective;
3. Co-agents are expressly allowed to act independently, unless otherwise indicated. This presumption may be problematic for individuals who want their children to work together; and
4. There are “hot powers” designated in the form. These powers are optional, and they are extreme. It will be tempting for people to initial on every line because they “fully trust” their family members, but these powers are called “hot powers” because they are easily abused, and may lead to litigation after the signor’s death.
As attorneys, our hope is that our clients do not sign contracts they have not fully read, understand, and comprehended. We hope that our clients choose instead to seek professional help before signing such documents. It is always important to understand the legal implications of documents that you sign, especially when it comes to powers of attorney.
There are a few additional acceptance requirements imposed on financial institutions that may ease the minds of attorneys or individuals who have ever had to deal with a bank that “doesn’t recognize” that power of attorney.
The third-party that receives the power of attorney, such as a bank, can choose to accept the power of attorney or take a prescribed action: ask the agent for certification that the authority has not been revoked, or ask the agent for an opinion of counsel that the agent is not exceeding authority of the power of attorney.
The accepting third party has seven business days after receipt to request the certification or opinion of counsel without paying a penalty fee. Upon the third party’s receipt of the requested additional information, the receiver has five business days to accept the power of attorney and allow the agent access.
If a third-party still refuses to accept a valid power of attorney, that third party can be held liable for all resultant attorneys’ fees and costs, and any cost of an action or proceeding.
It is important to understand that this does not mean that the third party will be required to pay for the attorney’s fees incurred in attempting to get them to accept the power of attorney, but only the costs incurred by the agent if the power of attorney is erroneously rejected.
Webb, Tanner & Powell offers free thirty-minute consultations for new clients who would like to discuss their estate planning needs. Most people think their “estate plan” is complete when they have executed a simple will. Many people do not understand that a comprehensive estate plan includes planning for end-of-life healthcare and financial decisions.
That is why, at WT&P, we strive to educate our clients on the need for comprehensive planning, and we help our clients achieve their goals and meet their needs both while they are alive and after they have passed away.
Come in today to get your financial power of attorney done, because as of July 1st, everyone in Georgia needs a new one!