The disposition of your assets in your estate plan may seem unrelated to life insurance…
My uncle got critically ill and ended up in the hospital. He asked me to take care of his bills while he is incapacitated. Back in 2002, he named me as his financial power of attorney, so I could write checks on his bank account when he couldn’t, like now. But the bank is rejecting the document. They say it’s too old. I don’t want to bother my uncle when he has more important things on his mind. Is there anything we can do?
Yes. Come into the office, and we will have you sign a “Certification of Validity.” You will swear under oath that your uncle is still alive; you know he intends the 2002 document to still be good, you know he has never revoked it, and no other events have intervened to make the old power of attorney invalid. That should work to get you the authority your uncle wanted you to have.
Keep in mind that you have run into this problem because institutions like banks and insurance companies, and healthcare providers too, take very seriously their duty to transact business with only those people who are specifically authorized. When, as in your situation, that person is you and not your uncle, they often prefer to take the “better safe than sorry” approach and refuse you. After all, they, like most people, are not lawyers!
Still, this problem can be encountered frequently, so some states have stepped in to help. Some have enacted a specific law, recommended nationally by what’s called the “Uniform Power of Attorney Act,” that permits the use of certificates of validation to encourage acceptance of powers of attorney in situations like yours. This kind of validation can also be permitted, or even required, of agents by banks and insurance companies.
Of course, you don’t need to tell your uncle this right now, but when he recovers, please remind him that he, too, should come in for a thorough review of his estate plan. This experience you’re having shows how important it is to keep those documents current.
The rule of thumb is that an attorney should review estate plans and powers of attorney for any significant life change like illness or divorce. Even if none of those things have happened (yet), it’s wise to come in for a “check-up” every five years. Avoid depending on the validation certificate, so the plan will work for you when you need it most. We hope you found this article helpful. If you have questions or would like to discuss a personal legal matter, don’t hesitate to reach out. Please contact our office at 732-972-1600.