Do You Know How the New Connecticut Law Affects Your Power of Attorney?
The legislature of the State of Connecticut, after years of debate, has adopted comprehensive new laws concerning powers of attorney for financial matters. Overall, the new laws offer additional needed guidance on what can be done under a power of attorney, help to ensure that a power of attorney will be valid and effective when it is needed, and still allow for customized provisions that may be necessary for your personal situation or preferences.
As we have described in previous articles, the primary issue we see with powers of attorney is that banks, brokerage firms or other financial institutions may refuse to accept a power of attorney when the client, or Principal under the Power of Attorney, needs the Agent to be able to act for him or her. Most importantly, then, the new laws provide a mechanism which compels financial institutions to either request limited additional information about the power of attorney within seven business days of having it presented to them or to honor it, unless there is a valid reason to refuse the power of attorney (such as actual knowledge that the Principal has in fact revoked the power of attorney). Anyone who refuses to accept a power of attorney may be brought before the probate court and may be responsible for attorneys’ fees and costs if they are found to have violated the provisions of the law.
The new law on the whole serve to highlight the broad scope of what can be done by an agent under a power of attorney, including providing the Agent with authority to receive protected health information under HIPAA; offering protections against liability for agents who act in good faith in carrying out their duties to the Principal; providing protections against liability for financial institutions who rely in good faith upon a power of attorney regardless of the date of execution; and clarifying the Probate Court’s authority to address issues surrounding the authority of an agent under a power of attorney.
Notably, the primary reason why a power of attorney may be rejected by a financial institution is a claim that it is too old, or “stale.” This new statute should reduce the frequency of that problem. Additionally, if the Principal has his or her signature on the power of attorney properly acknowledged, such as by signing before a Notary Public, then financial institutions can rely on that signature being genuine. Of course, it will take time before any practical changes take effect.
The new laws will be effective July 1, 2016, and will affect powers of attorney that are drafted on or after October 1, 2015. Powers of attorney that were created before October 1, 2015 and complied with the current law when they were drafted will continue to be valid. Moreover, many of these new provisions are optional, and clients will continue to have the ability to create powers of attorney with the exact powers - and restrictions on powers - that they want to give to their agents.
In our practice, we often seek to provide agents with the broadest possible authority, while counseling our clients that there is always the potential for abuse of that authority by an unscrupulous agent. The new law supports our efforts to provide agents with all the authority they may need in any given circumstance. In addition, it further supports our longstanding practice of putting protections in place that may help combat any such abuses.
If you have any questions or concerns about your Power of Attorney or other estate planning documents, please feel free to contact our office at (860) 769-6938. We are happy to help.
Power of Attorney - Bloomfield CT, West Hartford CT, Simsbury CT
2015© All Rights Reserved