Thursday, February 24, 2011

Powers of Attorney & Age Staleness: The Problem You Didn't Know You Had

Your Power of Attorney has a limited useful life! This is the problem of age staleness with Powers of Attorney.

One of the crucial components of every estate plan is the Durable Power of Attorney. There are two types, one for financial matters and one for healthcare issues. Many people believe that when they sign their Powers of Attorney the documents are good forever. This belief is incorrect.

This article was requested by one of my clients who just dealt with the age staleness problem recently. A bank (which shall remain nameless) refuses to accept her husband's Power of Attorney. The document is less than four years old. The bank is afraid of liability without an affidavit from the husband stating that the Power of Attorney still reflects his wishes. Ridiculous? Yes! This is the problem of age staleness.

In age staleness cases, the bank has no legal leg to stand on. The Power of Attorney is legally valid. However, the bank can refuse to accept anything they don't like and request either an updated document or an affidavit. There are two options to deal with age staleness:

1. Fight tooth and nail with the bank or produce the affidavit.

2. Update your Powers of Attorney regularly.

In most cases the second option is the better one. How do you do this? When you meet for your annual or biannual reviews with your estate planner, ask if it's time for updating your Powers of Attorney. You should plan on doing so approximately every 3–5 years.

If you have questions about age staleness issues, or any other estate planning questions, feel free to give me a call. Also, if you have comments on this article, please leave them here or send us an email. Thank you.

Bernie Greenberg

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