Granting a power of attorney to someone to act on your behalf should be given careful and thoughtful consideration. You should also seek the advice of an estate planning attorney who understands how the power of attorney will work with other estate planning documents you have in effect. A power of attorney may be written for different purposes, so it is important to make sure that you have the right one.
In Arkansas, the laws that govern a power of attorney were changed on January 1, 2012 by the Uniform Power of Attorney Act. So if you have a power of attorney that was created before that date, you should consult an attorney to make sure that your power of attorney is still valid under the new laws. While the new law states that those created prior to the new laws is still valid if it was valid under the old laws, having one that was created before 2012 may still complicate matters when you need to act quickly.
First, what is a power of attorney? As mentioned above, they can be created for several different purposes and written in different ways. But the simplest definition is that it gives someone else (known as the “agent”) the power to act on your behalf (the “principal”) as specified in the document. (Because of the name, some assume that only an attorney can hold these powers, but anyone that you choose can have your power of attorney, such as a spouse, sibling, parent, business partner, etc.) Common types of decisions allowed by a power of attorney include health care and financial decisions.
Since the new law was passed in Arkansas, a specific form can be used to create a valid power of attorney. While other forms may be used, they may not be granted the same protections as the new “statutory form” for a power of attorney. When the new form is presented to someone with a request to act on it, the person or institution (such as a bank) it is presented to must accept it without requiring a different form or additional information. This part of the law is a response to the practices of some banks and other businesses to require the use of their own form. Under the new law, they can no longer do this, subject to other exceptions in the Act. If the statutory form is not accepted, the power of attorney may be enforced under a court order which will also require the business to pay any attorney’s fees and court costs spent to enforce it.
Because of the presumption of validity given to the new statutory form power of attorney, the common practice of purchasing a power of attorney online or writing one yourself would be ill-advised. Your effort and expense may not only create a power of attorney without the presumptions, but could even be useless under the new laws. Working with an experienced estate planning attorney to make sure that your power of attorney meets the new criteria and gives your agent the ability to do what you need him or her to do and that the power of attorney will be accepted when you need it to be can be critical to your peace of mind.