Can a Third-Party Refuse to Accept a Power of Attorney?
By Barry Zimmer on January 26th, 2023 in Elder Law, Elderly parents, Estate Planning, Estate Planning for Young Children, Estate Planninng, Financial Planning, Powers of Attorney
The odds are good that at some point during your life you will execute a Power of Attorney. Given how common they are, you may also be named as the Agent in someone else’s Power of Attorney. What happens if a third-party refuses to acknowledge the authority of a Power of Attorney you executed or under which you are acting as an Agent? A Loveland estate planning attorney at Zimmer Law Office discusses the refusal of a third-party to accept a Power of Attorney.
What Is a Power of Attorney?
A Power of Attorney is a legal document that allows the “Principal” (the person creating the document) to grant an “Agent” the authority to act on behalf of the Principal in legal matters and business transactions. The amount and type of authority granted to an Agent in a Power of Attorney (POA) will depend first on whether the POA is general or limited. A general POA grants considerable power to the Agent while a limited POA only grants limited, and specific, authority to the Agent. A POA can also be made durable, meaning that the authority granted to the Agent will survive the incapacity of the Principal.
Is a Third-Party Required to Honor an Agent’s Authority Under a Power of Attorney?
By its very nature, a POA is intended to give the Agent the legal authority to act on behalf of, or in place of, the Principal, meaning that the Principal will not typically be present when the Agent attempts to use the POA. Sometimes, however, a third-party refuses to accept the authority of an Agent. Common justifications for refusing to accept an Agent’s authority include:
- Claiming the POA is “stale.” If the POA was not executed recently, a third party may claim it is “stale” or expired. Legally, however, a POA does not have an expiration or termination date unless one is noted in the document. Otherwise, a POA only terminates when revoked by the Principal, upon the death of the Principal, or upon the incapacity of the Principal if the POA is not durable. Nevertheless, if you are the Agent under a POA that was executed several years ago and the Principal remains capable of executing a new one, it may be wise to do so to prevent disputes.
- Insisting on a specific form. Sometimes a third party will only accept a POA created using their own form. Banks are notorious for insisting on the use of their form for a POA. Although the law requires third parties to accept an otherwise valid POA, it can be easier to simply have the Principal execute the preferred form if that is an option. If having the Principal execute a new POA is not a convenient option, it may be time to speak to an attorney.
- Questioning the validity of the document. A third party can question the validity or authenticity of a POA and may take reasonable steps to confirm that the document is genuine and remains valid. To a third party from questioning the validity of a POA, Section 1337.07 of the Ohio Revised Code allows you to record a POA with the County Recorder’s Office. Once a POA has the Recorder’s official seal affixed to the document, the POA “shall be received in all courts and places within this state as prima-facie evidence of the existence of that instrument and as conclusive evidence of the existence of that record.”
Contact a Loveland Estate Planning Attorney
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about a Power of Attorney, contact an experienced Loveland estate planning attorney at Zimmer Law Office by calling 513-721-1513 to schedule your appointment today.