Happy Friday! In this latest edition of #FindOutFriday we want to share with you some of the effects of the new Power of Attorney Act that North Carolina adopted effective January 1, 2018. If you have a financial power of attorney that you signed prior to January 1 of this year, you will want to take notice!
North Carolina repealed and replaced the entirety of its old law on financial powers of attorney. One of the driving forces behind this change was to enhance the effectiveness of North Carolina powers of attorney given our aging population and associated vulnerabilities while also incorporating measures to prevent, identify, and address the abuse and misuse of a power of attorney by the Agent. To help in that endeavor, the new law better distinguishes between a “disability” and an “incapacitation.” More importantly, greater attention has been given to allowing proper judicial relief in cases of abuse—something that was missing under the prior law.
Additionally, in light of the frustration attorneys have long expressed with how banks frequently disregard powers of attorneys drafted under the prior law, the drafters of the new Act sought input from banking authorities in the hope that addressing their concerns would improve the acceptability of powers of attorney by third parties. We are particularly pleased to note financial institutions only have 7 days to review a power of attorney before they must inform you whether they accept or reject the presented document. Hopefully, this means the bottomless abyss that some powers of attorney seem to fall into is no more!
Although powers of attorney executed prior to January 1, 2018 are still valid under the new law, those powers of attorney lack many of the new and improved powers now available. The North Carolina State Bar recently sponsored a full-day seminar on all the new bells and whistles included in the new law. It would take too long to highlight all of the improvements North Carolina has made. But here's one --- under the old law, there was no statutory authority allowing your Agent to exercise power over your retirement accounts if you become incapacitated. There is now.
One more benefit is that new powers of attorney no longer have to be recorded with the Register of Deeds unless a real estate transaction is involved. Your privacy is protected under the new Act which, in this day and age, is something we should not take for granted!
Suffice it to say, now is the time to update your existing financial power of attorney in order to strengthen your incapacitation planning. We are waiting for your call - (919) 678-5761.