Changes to Connecticut’s existing power of attorney law will take effect on October 1, 2016.  Under the new law, a power of attorney (“POA”) that was signed before October 1, 2016 in compliance with the law in force at that time will remain valid.  A POA signed on or after October 1, 2016 must comply with the provisions of the new law.

The new law differs from existing law in a few key ways.  First, the new law requires that a third party, such as a financial institution, either honor a properly executed POA or request additional information/documentation within seven days after being presented with a POA.  A third party, however, is not required to accept the POA if the party has knowledge that the POA has been revoked.

The new law also specifically authorizes the use of a “short form” POA, as well as a “long form” POA.  The text of both forms is recited in the new statute, but the use of either forms is optional; neither is required in order to execute a valid POA.  The short form is a new addition to Connecticut’s POA statute, while the long form is simply a revised version of the existing statutory POA.

In addition, the new law requires the principal[1] to affirmatively “opt in” in order to give his or her agent certain estate planning powers.  Those powers include, among others, amending or revoking a trust, making gifts above the federal annual exclusion amount (currently $14,000 per donee) and changing beneficiary designations on behalf of the principal.

Another key provision adds a power over the disposition of bodily remains to the list of general authorizations granted to the agent. This provision allows the agent to direct in writing during the principal’s life how the principal’s remains will be disposed of upon death, or to designate another individual to control disposition of the principal’s remains.

Lastly, all POAs executed in accordance with the new law will be “durable” unless the principal has stated otherwise.  This means that the POA remains in effect even if the principal becomes incapacitated.  Under existing law, explicit language was required in order to create a durable POA.

 

[1] The “principal” is the person signing the POA in order to grant powers to another individual.  The “agent” is the individual to whom those powers are given.

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Nicole Hart, J.D.

Nicole Hart is head of our trusts & estates department and works in our New York office.