New law requires financial institutions to honor Maine powers of attorney
Have you ever tried to transact business on behalf of an elderly or disabled relative using that person's financial power of attorney (POA)? Have you been told by the financial institution that it will not accept the form because it was a) signed too long ago, or b) is not on the institution's preferred form? This scenario can be extremely frustrating if you are trying to look after someone, paying bills and monitoring investments. Your elderly or disabled relative may now be too incapacitated to sign a new POA on a form acceptable to the financial institution, requiring you to spend time and money getting a court order appointing you conservator.
Hopefully, this will change as of July 1, 2010, when a new Maine law, the Uniform Power of Attorney Act, takes effect. The purpose of the law is to make it easier to use validly executed POA's. Under this law, financial institutions are subject to penalties if they fail to honor powers of attorney which have been properly acknowledged (witnessed by a notary public or attorney at law):
- Institutions may not require an additional or different POA form if the form you have grants you the authority to perform the act requested.
- Institutions have a maximum of seven days to honor a POA.
- If an institution has a question of concerning the validity of the document or your authority as “agent”, the institution must, within that seven-day period, ask you to sign a “certification” of your authority, or must seek an “opinion of counsel” (letter from an attorney regarding the legality of the document).
- Once the institution has obtained the certification or opinion of counsel, it has only five additional days to honor the document.
- If the institution violates these rules, and if you have to obtain a court order confirming the validity of the POA, the financial institution will be required to pay attorney's fees and costs incurred by you to obtain that court order.
- (There are, however, exceptions to these rules. An institution will not be required to honor the document or pay attorney's fees and costs if: the institution had actual knowledge that the POA was terminated; if the institution had a good faith belief that you lack authority to perform the act requested; if the institution had a good faith belief that physical or financial abuse, neglect, exploitation or abandonment has occurred; or if it would be inconsistent with federal law to honor the document.)