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Atlanta Probate Lawyer: Georgia’s New Uniform Power of Attorney Act

Recently, the Uniform Power of Attorney Act, or UPOAA, passed in Georgia. This act, which becomes effective beginning July 1, 2017, amends the previous law regarding powers of attorney (POAs). The passage of UPOAA in Georgia is a significant step toward protecting elderly or disabled people because it clears up confusing aspects of the previous statutory scheme governing POAs and provides for additional safeguards against elder abuse and financial exploitation by their agents. The Georgia Chapter of the Alzheimer’s Association called uniform power of attorney laws “crucial to people with an Alzheimer’s diagnosis.” UPOAA not only adds protections for principals- it provides common sense protections for agents and third parties, as well.

POAs allow an agent to enter important financial transactions on behalf of a principal, such as buying and selling real estate, opening and closing accounts and paying bills. UPOAA adds protections to prevent an agent from abusing such powers. Prior to UPOAA passage, agents were subject to less harsh penalties and often were never held responsible for their misuse of their power. Sometimes, agents would be charged criminally, and may have been subject to a criminal restitution order, but prosecutors rarely pursued such cases because the amounts taken by agents were not enough to gain the prosecutor’s interest. In the meantime, Georgia law was unclear on who could file a civil suit against an agent other than the principal, and oftentimes a principal did not or could not file a suit, either because he was incapacitated or didn’t want to upset the agent, who often wielded great power and influence over the principal.

The UPOAA provides more stringent financial duties for an agent. Agents are held accountable not only to the court but also to any court-appointed fiduciary, and can be required to produce receipts and proof of transactions if so requested by the court, fiduciary, or principal. Those who violate their fiduciary duties can be subject not only to criminal prosecution but civil suits, as well, and may be subject to judgments for the repayment of the amounts taken from the principal. Agents can be liable for damages even where they did not commit any theft or misappropriation. If an agent is aware that another agent of the same principal has committed or is about to commit a breach of his fiduciary duty to the principal and does not take reasonable action to protect the principal from such breach or imminent breach, he could be held liable for damages suffered by the principal that could have been prevented. UPOAA also outlines who (besides the principal) can bring a suit before the court in the event that fraud is occurring and the principal is incapacitated or unwilling to bring suit himself.

Another important feature of the UPOAA is its provision for determining when a principal is incapacitated for purposes of conditional POAs (also known as springing POAs). Many powers of attorney have a clause stating that the POA “becomes effective upon the principal’s incapacity,” but often the POA will fail to state who decides when the principal is incapacitated or will name someone who is unable or unwilling to make the determination. UPOAA fills in the gap by stating that a medical doctor, psychologist, attorney, judge, or government official can make such determination, and can access the principal’s medical records  for the purpose of making such determination.

The amended statute also provides for agents’ protections. Although agents are required by law to attempt to preserve a principal’s estate plan and other fiduciary assets, sometimes there are circumstances beyond their control. Under UPOAA, agents who act in good faith cannot be held liable for decreases in a principal’s property, failure to maintain an estate plan, etc. Agents also cannot be held responsible for continuing to act under a power of attorney that has been terminated if they act in good faith and without knowledge that the POA has been terminated. Essentially, if an agent is doing their duty to the principal, they are protected from damages to the principal arising from unforeseen events.

Third parties such as banks are protected under UPOAA, as well. Third parties who accept forged, fraudulent or otherwise invalid POAs, while reasonably believing in the authenticity of the powers, are not subject to any repercussions. If a third party questions the validity or effect of a POA, it may request verification of the POA or seek counsel from an attorney within seven business days after being presented with the power of attorney. If the POA is verified or otherwise deemed valid or effective, the third party must accept and honor a POA, whereas a third party in the past was not obligated to accept a POA under any circumstances.

As a Georgia probate attorney, I have extensive experience with powers of attorney. It is important for both a principal and an agent to understand their rights and obligations with respect to POAs, and for third parties, including relatives and caretakers of the principal, to understand their options to protect a principal for abuse of a POA by an agent. If you feel that you would like someone to guide you through the process of instituting a POA for yourself, or if you feel that you may have a case of your agent taking advantage of you through a power of attorney, please email me or call my Atlanta probate firm at (404) 445-7771.

1175 Peachtree Street, N.E.
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Atlanta, GA 30361

Phone: 404-445-7771
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