Updating Your Power of Attorney to Comply with New Federal Laws

You may need to update your existing Power of Attorney document if your state has adopted new federal laws.

Thus far, Indiana, Colorado, New Mexico, Idaho, Nevada, Maine and Virginia are among the states which have recently adopted the Universal Power of Attorney Act (UPOAA). The UPOAA was drafted and promoted by the National Conference of Commissioners on Uniform State Laws.  This law seeks to create consistency amongst the widely varying state laws concerning Powers of Attorney in addition to providing stronger safeguards against abuse of power by agents.  Changes in state law due to passage of the UPOAA are applied to Powers of Attorney executed prior to passage of the law. If your state has recently passed the UPOAA, the following are some of the major changes that affect your Power of Attorney:

• The power to handle your financial accounts does not include the ability to change the beneficiary, if any, designated on the account.  In order to allow your agent the power to change beneficiary designations, the power must be specifically stated in your Power of Attorney.
• You can authorize your agent to utilize your funds to care for family members or others you have an obligation to support.
• Your agent will have no authority to manage, create, amend or revoke any trust on your behalf unless the power is specifically stated in your Power of Attorney.
• The power to renounce or forfeit your interest in an inheritance, annuity, insurance policy or other account is not granted unless specifically stated.
• If you currently have fiduciary responsibilities your agent does not automatically become able to handle these responsibilities on your behalf.  Your Power of Attorney must specifically address this power.
• A Power of Attorney is durable (remains effective even if you become disabled or lack the mental competence to understand and handle your financial and personal affairs) unless specifically stated otherwise in your Power of Attorney.
• Legislation regarding the UPOAA is currently being reviewed in Maryland, New Jersey, Michigan, Georgia, Ohio, Pennsylvania and Wisconsin and may take effect soon.  

If you find any of the above changes apply to your previously drafted Power of Attorney and you would like to update it at this time, you can revoke your previous Power of Attorney and create a new Power of Attorney that complies with state law.

Also see Updating Your Power of Attorney for Recent State Law Changes.

Laws on this topic may vary from state to state. This content is not meant to provide you with complete information and it is not intended to be legal or tax advice. It is recommended that you consult with your own attorney, accountant or other advisor regarding your specific situation.