Power of attorney changes could require review
Power of attorney agreements signed before Oct. 1 are still legally valid, but changes in state law could make financial institutions more wary about accepting them, lawyers warn.
A Palm Beach County attorney cautions clients that “many banks, brokerage houses, insurance companies and other institutions may not accept your old power of attorney.”
Not all bankers see a big problem, but here’s an example of how the law has changed, according to the attorney:
A woman had a stroke. Her son needed to pull money out of a bank to take care of her. An agreement gave power of attorney to both the son and his sister, meaning they could legally act on their mother’s behalf in matters such as handling her money. But the dual designation led to confusion and delay at the bank when his sibling was not immediately available.
State law revised as of Oct. 1, 2011, allows each person given power of attorney to act independently, even if the agreement names more than one person in that role, The Attorney said.
“I think it’s better,” The Attorney, whose firm has offices in Boca Raton and Aventura, said about the revised law. “It’s clearer and it’s more specific.”
Among other changes, photocopies of power of attorney agreements are now acceptable along with originals and certified copies.
Also, the law allows agents to be given specific “super powers” such as managing IRA, pension and retirement accounts, making gifts and hiring and firing nurses, aides and housekeepers.
Banking groups question how much has really changed. It is true financial institutions do not have to honor documents if they have reason to question their validity, they say, but that was also true before Oct. 1.
“If the bank thinks it’s defective, they don’t have to honor it,” said Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association.
The state’s rewrite was part of a nationwide effort to make such laws more uniform from state to state.
The Florida Bar Association makes available consumer pamphlets on the law in English and Spanish at floridabar.org/consumerpamphlets.
For instance, “springing” powers of attorney may not be created after Sept. 30, 2011, the Bar’s site says. A durable power of attorney agreement prior to Oct. 1 that is contingent on the incapacity of the principal –– sometimes called a “springing” power–– remains valid but is not effective until the principal’s incapacity has been certified by a physician.
Third parties may refuse to honor a power of attorney document if they are concerned about its validity, the Bar association says. Worries may include whether it was executed properly or perhaps forged, has been revoked, or if the principal has died or was competent at the time the document was signed.
Banks and other third parties may believe they are protecting an older or incapacitated person from unscrupulous conduct.
In that case, the person who has been given power of attorney may have to consult a lawyer to get a document enforced.
For additional information about Senior Information Centers, visit www.seniorinformationcenters.com or call 800-731-8784.