Effective July 1st of this year, Georgia’s new Uniform Power of Attorney Act (“UPOAA”) applies to most written, general, financial powers of attorney. A power of attorney (“POA”) allows for one party (the “principal”) to grant authority to another party (the “attorney-in-fact” or “agent”) to act in the principal’s stead with regard to the principal’s financial matters. If an individual is no longer capable of handling his or her own financial affairs, and does not have a valid durable POA in place, it may be burdensome or impossible for another person to ensure that individual’s bills are paid and his or her financial ships remain afloat.
While valid POA’s executed before July 1, 2017 continue to be valid, there are several reasons to consider having an updated POA prepared. This article is Part One of several articles which will cover different aspects of the UPOAA and various reasons to consider having a new POA as a part of one’s estate plan.
A promising feature of the new UPOAA is that it provides for the ability to force third parties, such as banks, to accept a POA if certain conditions are met. First, a POA must be a “statutory form power of attorney,” as defined by the statute. If the POA qualifies as a statutory form POA, upon presentment of the POA to the third party, the third party has seven business days to either accept the POA or to request an agent’s or co-agent’s certification concerning the validity of the POA and the agent’s or co-agent’s authority, an English translation of the POA, or an opinion of an attorney as to any matter of law concerning the POA. If any of these documents is requested, an agent must present it. After receiving all requested documents, the third party has up to five business days to accept the POA.
After this time frame, a third party only has a handful of legitimate reasons, set forth in the statute, to continue refusal of a POA. If all of the required steps are taken, and a third party continues refusal of a POA without one of the statutory legitimate reasons to do so, the third party is subject to (1) a court order mandating acceptance of the POA; and (2) liability for reasonable attorney’s fees and expenses of litigation incurred in any action or proceeding that confirms the validity of the POA or mandates acceptance of the POA. The third party may also become subject to other remedies, but, at this time, the scope of such additional available remedies is not clear. It is hoped that the ability to force third parties to accept a POA via a court order will help combat the reluctance of many third parties to honor valid POA’s of individuals whose financial stability may greatly depend on the ability of their designated agents to actually use the authority they have been granted.