Georgia has adopted a new Power of Attorney Act that goes into effect on July 1, 2017. The new Uniform Power of Attorney Act (UPOAA) replaces Georgia’s prior statutory Power of Attorney form and makes other significant changes to the law. Powers of Attorney executed prior to July 1, 2017 will remain valid; however, Powers of Attorney executed on or after July 1, 2017 must comply with the new law; and those that follow the statutory form will enjoy certain benefits that the new law provides.
- The UPOAA provides a statutory form that principals may use; and if the statutory form or a form that is “substantially similar” is used, the new law includes a mechanism for enforcing third-party acceptance (as long as certain conditions are satisfied). This may be the most impactful change with the UPOAA. Under previous law, agents often had difficulty convincing third parties, such as banks and other financial institutions, to accept the Power of Attorney form. Arbitrary nonacceptance left many agents and principals with useless Powers of Attorney.
- The UPOAA seeks to address mounting elder abuse concerns by bolstering protections for the principal, especially those who are incapacitated. The new statute provides that an agent must comply with all applicable fiduciary duties and lays out these duties in great detail.
- The UPOAA statutory form allows the principal to nominate a conservator in the event a court determines conservatorship is necessary. This is a new feature and is an attractive option for many who want to avoid a future court battle over conservatorship appointment.
- Georgia is now among a group of 24 states that have adopted the Uniform Power of Attorney Act, and more states are expected to follow. Recognition of the UPOAA across state lines will only serve to improve third-party acceptance and enforcement of fiduciary duties.
Since Powers of Attorney executed prior to July 1, 2017, remain effective, there is no rush to update to the new statutory form, unless there are specific reasons for doing so (such as the age of the existing Power of Attorney or frustrations with nonacceptance by financial institutions). We see the UPOAA as an excellent opportunity for our clients to revisit their current estate plan and determine if there are changes and updates needed. Contact us if you have any questions.