GEORGIA’S NEW STATUTORY POWER OF ATTORNEY BECOMES LAW JULY 1, 2017: WHAT YOU NEED TO KNOW

By: John Cleveland Hill, Esq. and Sarah Randal Watchko, Esq.

The General Assembly of Georgia passed and Governor Nathan Deal has signed a new law substantially overhauling financial Powers of Attorney (“POAs”), and the statute is effective July 1, 2017.  This article will give a brief overview of the law and its impacts, but the article is not comprehensive and should not be taken as such.  Individuals should seek the advice of their own legal counsel on this topic.

What is a POA and why is it important?

Let’s start with the basic concept.  A POA is a written document wherein one person (commonly called the “principal”) gives power to another person (commonly called the “agent” or the “attorney in fact”) to “step into the shoes” of the principal regarding the principal’s financial and asset management and decision making.

A POA is especially helpful—if not vitally important—should you reach a point in life where handling your own affairs is difficult or completely impossible. This could be due to an accident or sudden illness. Think of those daily, monthly, and yearly tasks required to make your financial life run smoothly.  If you could no longer care for those things yourself, someone needs to be able to do so for you.  Traditionally, we use a POA for those tasks.  In the absence of a POA, those that care about you will have little choice but to file an action in your local probate court to have someone appointed as “conservator”—what Georgia law calls a financial guardian.  The conservatorship process can be costly, lengthy, and requires ongoing court supervision for the duration of your incapacity.  Obviously the court supervised conservatorships provide an important role when someone does not have trustworthy people in their lives to serve as an agent under POA; for most, however, a POA will be a better choice.  Having a POA executed is intended to thwart the need for a conservatorship.

What does the new law do differently? Protections and Ability to Enforce.

In recent years agents attempting to use POAs for the principal have been met with increasing resistance from certain third parties— in the author’s experience, this resistance has largely come from banks and other financial institutions.  Banks and financial institutions have become so risk/liability averse that they have simply refused to follow the instructions of an agent under POA.  The result is that clients who thought that they had completed thorough, thoughtful estate planning were left in sometimes dire circumstances and their agents were left unable to access or use their finances for the principal’s benefit.

Under pre-July 1, 2017 law, third parties could not be forced to accept the POA because, under theories of contract law, the third party was not a party to the contract—the POA was only between the principal and agent.  Until the old law, there was very little, if any, recourse if a third party, such as a bank, refused to accept a POA.

The new statute provides significant protections for the third parties by providing that any person/entity may rely upon the validity of the POA unless that person has actual knowledge that the POA has been is invalid or has been terminated.

More importantly for our purposes here, however, the law creates the ability to force a third party to accept the POA if certain conditions are met.  Here is what is required to force acceptance of the POA:

  • The POA must be the statutory form or a document that “substantially reflects the language in the statutory form.
  • The agent must present the POA to the third party and seek to use the POA with the third party (i.e., agent presents POA to principal’s bank and asks to be given access to the principal’s bank accounts).
  • If the third party refuses to accept the POA, the third party has up to seven (7) business days to request either a certification from the agent, an English translation (if such is necessary), or an attorney’s opinion. If the third party requests any of these items, the agent must supply them to the third party.
    • Certification of Agent is a notarized statement, under penalty of perjury, concerning the principal, agent, and the POA.
    • Attorney’s Opinion is an explanation from an attorney regarding the POA.
  • After the agent supplies the requested documentation, the third party has up to five (5) business days to accept the POA.
  • Third parties may still refuse to accept the POA under certain circumstances: action requested is not required of the third party; action is against federal law; third party has actual knowledge that the POA or agent’s authority has terminated; where agent’s certification, English translation or attorney’s opinion have not been provided; good faith believe that the POA is invalid or agent lacks authority; or where the third makes or knows that another party has made a report to adult protective services concerning abuse of the principal.

If the third party refuses to accept the POA after compliance with the requirements of law by the agent and the third party does not have a valid, statutory reason for its rejection, then a court can be asked to rule on the validity of the POA and issue an order forcing the third party to accept the POA.   The third party can also be forced to reimburse the principal for reasonable attorney’s fees and expenses in pursuing the enforcement.  The court also has the ability to hold the third party liable for additional damages and other remedies.

This is an immense shift in Georgia law with regard to agents being able to care for their principals, and generally speaking, in families being able to care of each other during times of incapacitation.

What should you or your loved ones do now?

Although the new statute does not invalidate pre-July 1, 2017 POAs, the old law will still apply to the old POAs—in other words, there will be little or no ability to force acceptance of the POA.  Individuals should strongly consider contacting their estate planning attorney to determine whether updating to the new statutory POA is advisable for them.

Copyright 2017; Hill & Watchko, LLC.

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brain tag cloud pictogram

A large part of my elder law practice consists of advising family caregivers dealing with dementia.

When I saw that a free program was being offered today at the Dorothy Benson Senior Center in Sandy Springs, I signed up right away.  The more resources and information regarding dementia that I have in my toolbox, the more I can help my clients and their families.

Dementia expert Teepa Snow presented the program, and it was excellent.  In preparation for my next post, which involves planning for dementia and long-term care, I wanted to share some of the tidbits I learned from Teepa today:

On dementia in general:

The term “dementia” does not mean the same thing as “Alzheimer’s” and neither “dementia” nor “Alzheimer’s” mean the same thing as memory loss.

There are 85 – 90 types of dementia. Every type has these things in common:
1.     At least two parts of the brain are actively dying.
2.    Each dementia will destroy at least 2/3 of the brain.
3.    All types of dementia are progressive (i.e. they all get worse over time);  however, each is progressive in its own unique way.
4.   Nothing can slow, stop or turn around dementia.
5.   All forms of dementia are terminal.

Because dementia affects several parts of the brain, it causes more than memory problems. Dementia affects thought, language, behavior, personality, and feeling/affect, among other things.

“Dementia” itself is not a diagnosis. Instead, it describes a collection of symptoms. It is vital that patients receive a good evaluation from a qualified physician, so that the patient and caregivers know what kind of dementia they are dealing with.

Medical issues are often misdiagnosed as dementia because of the resulting cognitive issues. Medical problems causing cognitive impairment can include depression, thyroid imbalance, lack of Vitamin B12, long-term alcoholism, diabetes, hypertension, and infection, just to name a few.

A dementia “diagnosis” is very scary to patients.  There is a huge stigma surrounding dementia.

On dealing with dementia and patient resistance:

Patients often act illogically, and caregivers may respond with resistance.  This response is entirely natural, but counterproductive.

Resistance in the caregiver is often met with resistance in the patient, and caregivers’ efforts to explain or correct illogical or resistant behaviors are not helpful.  Instead, caregivers should try to discover the underlying cause (that is, the unmet need) of the behavior (which is often not what it initially seems).

Key: do not correct. Let it go.  Join the journey. If Mother said she saw Aunt Eunice last night, don’t correct her, even though Aunt Eunice has been dead for thirty years.  Tell her you think it’s nice Aunt Eunice visited, and ask her whether Aunt Eunice still has that terrible perm.

Be aware that sudden changes in behavior often have underlying medical causes, including lack of sleep, lack of nutrition, dehydration, lack of sunlight… Remember, investigate and try to find the underlying cause.

Most important: I asked Teepa to name some resources for family caregivers, and she provided the following:

1.   Alzheimer’s Foundation of America

2.   Alzheimer’s Association

3.   More resources listed on Teepa’s website, including free videos

Image © Lifeinapixel – Fotolia.com

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