At the end of the most recent legislative session, a new bill was passed adopting a new system for powers of attorney. The new law goes into effect July 1, 2017. There are two major implications to the change.
The first change is that there is now a statutory form for financial powers of attorney, just like the state form for the advance directive for healthcare.
To understand the second change coming with the new law, a brief overview: historically, financial powers of attorney have served to allow institutions to interact with a person's designated agent, rather than with the person directly. The power of attorney delegates the authority to act, and relieves the other party (typically a bank or other financial institution) of liability for interacting with the third party. The key there is the word allows - it has allowed the delegation of authority, but it hasn't required other parties to accept that power. In other words, with a properly drafted power of attorney, a bank can interact with your agent in regards to your account, but they can also choose to not interact with the agent at their discretion. Under the new law, cooperation with agents will be mandatory. If a third party doesn't comply with a power of attorney using a properly executed state form, the agent will now be able to get a court order requiring their compliance. In addition to the order, the court will likely award attorney's fees against the institution in favor of the principal and agent.
In effect, the law aims to make financial powers of attorney more accessible to the public, and to more fully empower those who choose to take advantage of the new forms.
So - do you need an attorney to use the new form? That's up to you. You can certainly use the form on your own, and if properly executed, it will carry the same force and effect as if drafted by an attorney. However, there is a section allowing for "special instructions" where an attorney will be best able to assist you. Because the new form is a universal, standard form rather than a customized form historically provided by attorneys, it is very basic in its form and function. If you need the finesse offered by a custom form, a skilled attorney can draft those terms as special instructions, giving you the precision of a custom form with the enforceability of the new code. If you need to update your financial power of attorney to require mandatory compliance from institutions and third parties, call The Lilly Law Firm today at (678) 807-9150.