LEGAL MINUTE
Georgia ' s Uniform Power of Attorney Act
Walter N . Cohen Cohen & Caproni , LLC wcohen @ cohenandcaproni . com
Legislation dealing with financial powers of attorney (“ POAs ”) known as the “ Uniform Power of Attorney Act ” ( the “ Act ”) was signed by the Governor earlier this year and became effective on July 1 , 2017 . Although the initial impetus for such legislation was a concern for abuses which have occurred through actions taken by agents under POAs , there had also been an increasing inability of agents to secure approval of third parties ( such as banks and other financial institutions ) regarding the use of POAs which were not executed using the financial institutions ’ own form documents . This Act attempts to deal with both of these issues .
As an initial matter , the new law does not mandate the use of the new POA form , in order for a POA to be enforceable or honored . Existing POAs will still be valid , although their acceptance may still be refused by institutions who are not comfortable with validating a preexisting POA for which they have some concern , either with regard to validity in its execution or with regard to the breadth of authority over assets held by such institution . The Act will not apply to any actions taken under a POA that was executed prior to July 1 , 2017 . Thus , it is advisable for practitioners to consider reviewing existing POAs , in order to make a determination as to whether new POAs in compliance with the new law should be prepared . Of course , to the extent that the principal who executed the existing POA is now incapacitated or incompetent , it will not be possible to implement a new POA . The Act provides a statutory form for
the new POA . The statutory form can be relied upon in drafting POAs which are intended to comply with the new law . Although use of the new form is not mandatory , it is recommended that the statutory form be used in substantially the form set out in the statute . Over time , it is likely that institutions and other third parties will become familiar with the statutory form which should make it easier to secure third party acceptance of such POAs .
The form is divided into two section dealing with different types of powers . The first section of the new form regarding powers describes areas of general authority which must be approved and initialed by the principal , in order to grant such authority to the agent . The powers cover real property , tangible personal property , stocks and bonds , commodities and options , banks and other financial institutions , operation of entity or business , insurance and annuities , estates , trusts , and other beneficial interests , claims and litigation , personal and family maintenance , benefits from governmental programs or civil or military service , retirement plans , and taxes . If the principal desires to give the agent authority in all of these areas , he or she can initial one space which covers “ all preceding subjects .” Otherwise , each area of authority must be separately initialed .
In addition to the areas of general authority , the second section of the form includes areas of specific authority . These powers are also known as “ hot powers ” since their exercise could significantly change the use and disposition of the principal ’ s assets . Each area of specific authority must be initialed by the principal , in order to grant the agent authority to act with respect to such matters . These powers , if granted , can cause assets to be transferred from ( or bypass altogether ) the principal and thus merit special attention when deciding whether to grant them to the agent . The areas , if initialed , will allow the agent to ( a ) create , amend , revoke , or terminate an inter vivos trust , ( b ) make a gift , subject to the limitations of O . C . G . A . § 10-6B-56 and any special instructions in the power of attorney , ( c ) create or change rights of survivorship , ( d ) create or change a beneficiary designation , ( e ) authorize another person to exercise the authority granted under the power of attorney , ( f ) waive the principal ' s right to be a beneficiary of a joint and survivor annuity , including a survivor benefit under a retirement plan , ( g ) access the content of electronic communications , ( h ) exercise fiduciary powers that the principal has authority to delegate , or ( i ) disclaim or refuse an interest in property , including a power of appointment .
As the areas of specific authority deal with situations in which the principal ’ s assets and estate plan could be significantly affected or changed , it will be important that the attorney representing the principal explain in sufficient detail the consequences which each of these grants of specific authority may have . Unlike the general authority powers granted in the first section of the form ( which can be authorized by simply
18 October 2017