The New York Times recently published an article describing problems with Powers of Attorney (“POAs”) that should create some concern for anyone designated as an attorney-in-fact for a loved-one. In short, the article describes the situation where banks and other financial institutions have refused to honor POAs that were old or that failed to comply with the bank’s own requirements for POAs. Such a situation understandably creates frustration and, at worst, may require the initiation of court proceedings to take control of the finances of the incapacited principal.
Fortunately, there is good news for Massachusetts residents, who need not worry about the concerns raised in the article. The Massachusetts Uniform Probate Code, which governs POAs, specifically addresses this situation. Accordingly, POAs in this state remain exercisable after execution unless the POA specifically states a termination date. In other words, a POA without an express time limit will not expire due to the lapse of time between execution and presentation to a third party. Consequently, financial instructions should not be refusing Massachusetts POAs. If they do, the law arms the attorney-in-fact with authority to hold the financial institution accountable:
The attorney in fact under a durable power of attorney is authorized to prosecute legal action for damages in behalf of the principal in the event of an unreasonable refusal of a third party to honor the authority of a valid durable power of attorney. M.G.L. c. 190B § 5-506.
The law also provides that third parties cannot be held liable for relying in good faith on a POA. Therefore, a well drafted POA should provide that any person dealing with the attorney-in-fact may conclusively rely upon an affidavit executed by such person to the effect that such person does not have knowledge of the termination of the power. Such affidavit will be conclusive proof of the non-revocation or non-termination of the power conferred upon the attorney-in-fact, and will keep the bank happy.
Consequently, Massachusetts residents executing a POA need not worry of the possibility that the document will be nullified by the passage of time or the requirements of any particular bank. The POA will serve its intended purpose and obviate the need to initiate conservatorship proceedings in the event of incapacity.
If you have any questions about the need for a Massachusetts Durable Power of Attorney, please feel free to contact us for a free initial consultation.