Question of the Week

Posted: Sep 30, 2021 | Author: Cornerstone Compliance Team

compliance power of attorney

Question: Do we always have to accept a durable power of attorney?

Answer: While the answer is no, it’s a bit more complicated than that. Powers of attorney are a matter of state law, and as of Nov. 1, all three of Cornerstone’s states will have implemented portions of the Uniform Power of Attorney Act that generally mandate acceptance. Mandatory acceptance is already the law in Arkansas and Texas; Oklahoma passed similar legislation this past year.

Mandatory acceptance means that you may not refuse without a valid reason. This is important because durable powers of attorney are how people generally delegate their powers when they are incapacitated or otherwise unable to act on their own behalf. Members still need someone to manage their finances, pay bills, or make determinations regarding their health or property when they are unable to, and creating a power of attorney before there is a need is preferable to depending on an interested person to obtain a very expensive guardianship order later.

All three states do outline reasons by which a person (or a credit union) may refuse, such as if the delegated powers in the power of attorney do not allow for the action that the agent is trying to take, or if there is some knowledge that the power of attorney is no longer valid or improperly executed. Arkansas, Oklahoma, and Texas permit you to request that the agent presenting the power of attorney obtain an opinion of counsel at their expense, which means the agent must pay an attorney to figure out whether they can take an action. If the agent is unable to acquire an opinion, you can refuse for that reason (usually because an attorney believes there’s some problem with the document too!).

In any case, before you take any action to refuse, make sure you consult with counsel, as refusing for invalid reasons may subject the credit union to some civil liability. There are also state-specific timeframes by which you must accept or refuse a power of attorney, so you will want to make sure you follow those closely.