Effective January 1, 2017, Washington’s statute relating to powers of attorney was recently replaced in its entirety by a new Washington Uniform Power of Attorney Act. This power of attorney statute update was a big deal in estate planning. We discussed powers of attorney in our estate planning series. You can review here. As this statute is now a year old, it is a good reminder to ask whether you have updated your powers of attorney to comply with the new laws.
As a reminder, the principal is the individual drafting and signing the power of attorney. The agent is the person the principal appoints to act on their behalf in the power of attorney.
Below is a brief summary of a few additions and revisions to the statute. The summary does not cover all of the revisions and additions to the statute. If you have specific questions regarding your powers of attorney or your personal situation, please contact us.
Actions prohibited unless authorized
Unless a power of attorney explicitly provides for the agent to take certain action, the agent is prohibited from doing certain things. A few examples would include:
-changing beneficiary designations or survivorship rights;
-making gifts over the federal gift tax exclusion;
-creating or altering community property agreements;
-making health care decisions.
Default provisions allowed unless specifically excluded
The statute has default provisions that allow the agent broad powers to act on behalf of the principal. Even if the power of attorney does not specifically spell out the actions listed below, the following are default actions the agent is allowed to do on behalf of the principal:
-mortgage real property or remove structures;
-close bank accounts;
-fire employees at the principal’s business;
-terminate a business interest that the principal has;
-deviate from the principal’s estate plan if the agent does not have notice of the plan or if the estate plan is “not consistent with the principal’s best interest.”
Execution of a Valid Power of Attorney
To be valid, powers of attorney must follow certain formal requirements. The document must specifically use the term “power of attorney” and grant authority for the agent to act in the principal’s place. The principal’s signature must be notarized or witnessed by two unrelated people who are not the principal’s home health care providers or caregivers.
As you can see, there have been many additions and revisions to the power of attorney statute, which may or may not affect your documents. If you have not recently updated your powers of attorney since the new statute went into effect, we suggest you pull out your documents and give them a review and possibly update them. Please feel free to contact us if you would like assistance in updating your powers of attorney.
Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only, and should not be construed as legal advice from Leos & Gilkerson, PLLC or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a licensed lawyer.