When Should I Update My Power of Attorney?

Q. I’ve had a Power of Attorney in place for two decades now. I have moved since then and have had several life-changing events occur. I’m wondering in what instances should someone update their Power of Attorney? What happens if I don’t update it? Thanks for your help!

A. As you likely realize, it is important to have certain legal documents, such as Powers of Attorney (POAs), in place in the event of an emergency or life event. It is also incredibly important to keep such documents up-to-date so they do what you intend them to do when the time comes that they are needed.

POAs are one of the most important planning documents because they name someone to make financial and legal decisions for you if and when you cannot make these decisions for yourself, and they therefore avoid the need for lifetime probate, also known as conservatorship. There are different types of POAs and these are the two common ones:

General Financial Power of Attorney

A General Power of Attorney is the most important legal document that a person can have, and is an essential part of every Incapacity Plan and Estate Plan. A General Financial Power of Attorney (always “durable” when used in connection with estate planning) authorizes your agent, sometimes called “Attorney in Fact,” to act on your behalf and sign your name to financial and/or legal documents.

Medical Power of Attorney (part of Your Advance Medical Directive)

A Medical Power of Attorney (also called a Health Care Power of Attorney) is usually part of your Advance Medical Directive, and authorizes another person (called your “Medical Agent”), to make decisions with respect to your medical care in the event that you are physically or mentally unable to do so, typically as certified by two physicians.

Laws and life circumstances change, so planning is not a one-time event. Updates are required from time to time, as I will explain.

How Often Should You Update Your Estate Planning Documents?

It is generally recommended that you revisit your estate plan at least once every 3-5 years, just to make sure that everything is still relevant and no changes are needed. Estate planning documents should also be reviewed during major life changes such as death of a spouse, remarriage, birth of a new child or grandchild, and more. See the entire list here. The reason for updating your planning documents during these life changes is that it’s the only way to ensure that your estate plan truly reflects who you are, what you care about, and what you have.

If it has been a while since you looked at your power of attorney, here are some questions to consider when deciding whether you should update it.

Has the Law Changed?

The law changed in VA and Maryland in 2010, as follows:

In Virginia: Nearly 11 years ago, on July 1, 2010, Virginia adopted the Uniform Power of Attorney Act, joining a handful of other states that have adopted the Uniform Act in some form or fashion.

A POA executed in the Commonwealth on or after July 1, 2010, is valid if its execution complies with § 64.2-1603. A POA executed in the Commonwealth before July 1, 2010, is valid if its execution complied with the law of the Commonwealth as it existed at the time of execution. Click here for more details on this law.

In Maryland: On May 20, 2010, Governor O’Malley signed into law Chapter 689, HB 659 (the “Act”) which repealed Estates and Trusts Sections 13–601 through 13–603 (Powers of Attorney) and added Estates and Trusts Sections 17–101 through 17–204 under the new title “Maryland General and Limited Power of Attorney Act”. The Act took effect on October 1, 2010. Learn more here.

In DC: DC Power of Attorney Laws have not been updated since 2000. They are based on older uniform law called the Uniform Statutory Form Power of Attorney Act. Click here to see DC’s POA laws.

Please note that just because states may offer a simple statutory version of power of attorney, that doesn’t mean that it is a good or a complete power of attorney document. On the contrary, most sample forms in state statutes do not have what I consider to be critical asset protection powers, which are the powers to enable your agent to do asset protection for you in, connection with Medicaid planning and/or Veterans asset protection planning, should you need long-term care in the future and at that time be unable to make legal and financial decisions for yourself.

If your POA was written prior to 2010, it is very important to consult with an experienced Elder Law and Estate Planning Attorney to make sure the provisions of your power of attorney are all still valid and up-to-date, and most importantly that the provisions of your power of attorney will actually be able to accomplish your desired goals if and when needed.

Changes do occur when it comes to POAs. For instance, in NY, a new POA law was enacted this month. Legal changes make keeping your POA up to date especially important!

Have You Gotten Married or Divorced?

People sometimes forget that they have created a POA, only to discover years later that an ex-spouse is still listed as the agent. If you suspect you may still have estate planning documents such as wills, trusts, or POAs that still name an ex, it is obviously a good time to look at changing those documents.

Have You Moved?

It’s always a good idea to update your POA if you have moved. If you’re still in the same state, the existing document is likely still valid, but it’s more likely that banks and other institutions will accept it if it has your current address and is done specifically in connection with the laws of the state you live in.  Also, some states have specific language that must appear on the face of a power of attorney in order for the agent to be able to do specific things, such as selling real estate. For example, see this DC code section for special language that must appear at the top of a DC power of attorney authorizing someone to sell real estate

Have You Been Diagnosed With a Medical Condition?

Some medical conditions may require you to carefully rethink your plans. If you have a diagnosis that may require long-term care in a nursing home, there are specific provisions you may want to add in order protect loved ones and protect your assets. Likewise, if your new medical diagnosis gives you concerns about end-of-life planning, you would certainly want to meet with an experienced elder law attorney to review your options.

Have You Made Changes to Other Estate Planning Documents?

If you have recently changed a trust or will or have created or changed other estate planning documents, it is a good idea to again look at your POA to make sure your agent will still be able to accomplish what you want to be accomplished, such as the ability to make unlimited gifts to your spouse and/or your children in connection with Medicaid asset protection planning.

Your POA may authorize your agent to make changes to your trust, in the event that you are unable and it is in your best interests. However, let’s say you made your trustee someone different than your agent under the POA. This is typically not a good idea as this could create confusion as to who is authorized to act with respect to the trust. Simple issues such as this can become big problems later if there is a dispute between your agent and trustee. A careful review of the language of all your estate planning documents by an experienced estate planning attorney may be necessary to ensure there is no ambiguity and you can avoid problems later on.

What Happens if You Don’t Update Your POA?

To be an effective planning tool, a POA has to be accepted by the bank, broker, or other third party to whom it is tendered. If you have not updated your planning documents in a while, they are more likely to be accepted if they are up-to-date and the information on them is correct. That’s why you shouldn’t let too much time pass between reviewing and updating your estate plan. Be sure that your documents are properly reviewed and updated as needed, so that they reflect what you want and do what you need them to do.

Make Sure Your Estate Planning Documents Are Always Up-to-Date

With over 3 decades of experience helping people throughout Virginia, Maryland, and  DC Metro Area, the Farr Law Firm and its attorneys are devoted to making sure our clients know their options and have the tools and information necessary to make the best decisions about their future, and that those tools are up-to-date.

If you have already had your estate planning documents completed by our firm, call us and be sure to ask about the Farr Law Firm’s Lifetime Protection Program®, which ensures that your documents are properly reviewed and updated as needed, so that they will always have the proper effect under the law.

If you have not done Incapacity Planning (including a Power of Attorney) or Estate Planning, or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, please contact the experienced attorneys at the Farr Law Firm and begin your planning today:

Estate Planning Fairfax: 703-691-1888
Estate Planning Fredericksburg: 540-479-1435
Estate Planning Rockville: 301-519-8041
Estate Planning DC: 202-587-2797
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