A financial power of attorney, also known as a durable power of attorney, permits someone you, the “principal”, designate (called your agent) to oversee your finances. Typically, this document is used so that your agent can step in and pay your bills or handle other financial matters when you cannot physically or mentally handle them.
A financial power of attorney is effective when signed by the principal and accepted by the agent. While most are designed to be immediately effective, the principal has the option to having their financial power of attorney only go into effect when a physician declares them to be incapacitated. This is called a “springing” power.
On January 1, 2018, the Uniform Power of Attorney Act, RSA 564-E, will go into effect. This new law provides for the following:
- A form document, called a “Statutory Form Power of Attorney” may be used to create a financial power of attorney, although this might not be as easy to do as it seems. Estate planning attorneys often include very detailed language that covers a variety of “what ifs” in the event that you or your loved one become disabled. Such language is not contained in the Statutory Form Power of Attorney.
- Requires that a financial power of attorney be acknowledged before a Notary Public or other officer authorized to take acknowledgments.
- Permits electronic signing, and – by inference – electronic notarizing of the document. Using such a financial power of attorney in real estate transactions may be problematic, however. Once again, an experienced estate planning attorney should be consulted.
- Permits a financial power of attorney to be signed by another person in the principal’s conscious presence, if that person is directed to sign by the principal. It is unsettled as to whether the agent may act as this proxy signer, so caution on this point is essential.
If it has been at least five years since you executed a financial power of attorney, you should execute a new one, as many financial institutions have a policy of not honoring documents that are over five years old.
If you have any concerns about your current financial power of attorney, you should consult with an estate planning attorney.