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Change is coming…Now what? Durable Power-of-Attorney (DPOA) laws are changing effective June 13, 2021, but what do those changes mean for you?
Just as a refresher, a DPOA will enable the attorney-in-fact to make financial decisions on your behalf if and when it is necessary. A comprehensive Durable Power-of-Attorney is a critical part of your plan to protect and preserve your assets.
Are wondering if you need to do anything since you already have a Durable Power-of-Attorney? Your existing DPOA still remains in full force and effect, but is it enough? Prior to this change taking effect on June 13, the Durable Power-of-Attorney laws changed in September of 2009 and were restated again in September of 2010. Anyone who is competent and doesn’t have a DPOA from that point forward should absolutely update their documents. The older the documents are, the more likely your serving agent will have prolonged delays getting approval from financial institutions during a crisis. If your documents were drafted after 2009, you should still take them out of your safe place and review them to assure it still reflects your wishes. Have any of your agents passed? Does your current Durable Power-of-Attorney name successor agents? Did you name someone other than a child as an agent since your children were too young at the time? Does one of your agents have financial issues of their own that make you question how they will manage your money?
Other important reasons to update an already existing DPOA is that the authority granted in your current documentation is not comprehensive enough for your current needs. Does it give the named agent the authority to make gifts, create trusts, and sign tax returns? These powers are essential in avoiding a Guardianship proceeding which can be time-consuming, costly, and invasive.
For those of you who do not have a Durable Power-of-Attorney, the new law helps to clear up many of the procedural issues that existed in previous DPOA law. Additionally, the new law allows for individuals to direct a person to sign the Durable Power-of-Attorney on their behalf. This is a crucial change. Prior to this new law, if you were competent but physically unable to hold a pen to sign your name (stamps were not allowed), you were not able to sign a DPOA. There is now also a presumption that the DPOA is valid at the time of signing. In some instances, financial institutions gave pushback as to the validity of the document. This often caused unnecessary delays especially for those trying to institute planning in a crisis. If a financial institution is going to refuse to honor the Durable Power-of-Attorney, it must be done within 10 days with notice to both the principal and the agent, in writing and must state specific reasons why it is rejected. If the agent then brings a court proceeding to compel the acceptance of the DPOA, the court can award damages including reasonable attorney’s fees.
These are among the many changes that were made to the existing Durable Power-of-Attorney laws. Now is the time to proactively assess your own estate planning. Don’t wait, call to schedule your appointment now! In addition, we have several upcoming webinars on this topic and urge you to register by clicking here.