The Hokey Pokey and Your Financial Power of Attorney

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SignatureDid you hear what happened when the composer of the Hokey Pokey died? They had a terrible time getting his body into the casket. Supposedly they put his right leg in and . . .

But we digress from a more serious topic: what the Hokey Pokey has to do with the document used when someone’s disabled.

Y’see, the dance worked best when people followed its directions. You did what it told you to do, which was simple. Nobody bumped into anybody else and the dance worked.

Where this is going: we review lots of Financial Powers of Attorney each year. We find that so many of them are missing a simple but required part. Not having this part in the document means the FPOA may be worthless – an impressive-looking document that is only good to ignite kindling.

Unfortunately, most people don’t find out there’s a problem with their FPOA until the signer is incommunicado, and the named agent is trying to use the FPOA. It’s like finding out that the fire extinguisher which looked okay is really empty. Who would know?

Here’s the way it happens. Your FPOA agent goes to your bank to set up access to your accounts. You give the FPOA to the nice person at the customer service desk. But then the customer service person says “Sorry, we can’t let you access that account. This Power of Attorney doesn’t comply with the law.”

The common response: “Well, it’s what my lawyer gave me to sign.” Or “I thought it was okay because I downloaded it.” Or the simple “Huh?”

The problem – which we see far too often (and maybe you should check your own FPOA) – is that something in the Georgia statute is not being complied with.

Basically, the statute-based FPOA contains a long list of powers for your agent, so he or she can act for your financial benefit if you’re out of it. It authorizes your agent to sign checks for you, pay bills, deal with investments, and more.

This makes the document incredibly potent: you’re giving someone the right to use powers in the list to take care of your finances and assets until you either recover . . . or die.

Georgia law says this is so powerful that you have to do something specific so it’s absolutely clear exactly which powers you’re giving to your agent. What you have to do: initial at the end of each paragraph which states a power. (Examples of the paragraphs: the right to manage your assets, the right to file lawsuits on your behalf, the right to sign stock certificates, the right to sell your real estate.)

What if you don’t initial a power, or haven’t? Sayeth the Georgia Code:

The powers described in any paragraph not initialed or which has been struck through will not be conveyed to the Agent.

So if you want to insure that the Financial Power of Attorney will work, every power should have a line at the end of it, where you initial.

In other words, if you’re examining an FPOA and no powers have been initialed, you have a problem. Or you will have a problem if you become disabled. Who’s going to have the power to pay your bills, manage your assets, all that? The only other thing they can do is go into court for an order granting powers. And that’s expensive.

Another part of the Code says that the FPOA form in the Georgia statute “is not the exclusive method for creating such an agency.” So you can argue that the law allows FPOAs to look different.

But do you really want your agent to have that argument with that nice customer service person, the insurance adjuster, the closing attorney, etc.? Why should your agent have to waste time trying to convince someone that you signed this other FPOA form, and you didn’t initial anything, because the one in the Georgia Code is not the “exclusive” form. Good luck.

We suggest: do things straight-and-narrow. If the law is so explicit that it wants you to initial each “power paragraph,” then just do it. You want to make things as easy as possible for the agent named in your FPOA, not more difficult.

One last thing; you may need powers added to the ones in the FPOA form in the Georgia Code. But that’s story for another day.

And that’s what it’s all about.