For more information, please contact the Financial Institutions Practice Group at Lane Powell:
Washington’s new Uniform Power of Attorney Act (UPAA) will repeal and replace the current Power of Attorney Act, effective January 1. While an existing power of attorney document (POA) that was valid when executed will remain valid, all new POAs executed in Washington after January 1 will be valid only if they comply with the execution requirements of the new law. Below is a summary of some of the most significant provisions of the Washington UPAA from the perspective of financial institutions.
You will want to pay particular attention to the new requirement that a financial institution may be required to accept the use of a POA in some circumstances as discussed under Section C below.
A. Execution Requirements and Requirements Governing the Use of POAs. Under the Washington UPAA, a POA must be signed and dated by the principal, and the signature must either: (a) be acknowledged before a notary or (b) be attested to by two or more disinterested witnesses. Despite the apparently parallel tracks for different methods of signing a power of attorney, note that there are safe harbors available for a party accepting an “acknowledged power of attorney” that are not available for one that has merely been witnessed. For that reason, financial institutions will most likely want powers of attorney on which they rely to contain an acknowledged signature. Here are some other important rules about use of a POA:
Note that there are also sections regarding the effect of general authority given to the agent under the POA with regard to the topics of operation of an entity or business; insurance and annuities; estates, trusts and other beneficial interests; claims and litigation; personal and family maintenance; benefits from governmental programs or civil or military service; retirement plans; taxes; gifts; health care matters; and care of the principal’s minor children.
B. Termination of a POA. Under the Washington UPAA, a POA terminates upon the occurrence of the following events:
The agent’s authority under a POA terminates when:
In addition, if a court appoints a guardian of the principal’s estate or other fiduciary charged with management of all of the principal’s property, then the POA is terminated, unless the court provides otherwise. Note, however, if a limited guardian or fiduciary is appointed, the POA will not be terminated or modified, except to the extent ordered by the court.
An existing POA is not revoked or terminated upon the execution of a new POA unless the new POA expressly revokes the prior POA. This means that it would be possible for there to be multiple POAs outstanding at any one time giving the same rights to different agents.
C. Obligations Upon Presentation of a POA. The Washington UPAA provides that if you are asked to accept an acknowledged POA, you may, within seven business days of its presentation, request an agent’s certification, using a certification form that is part of the statute, and must accept the acknowledged POA within five business days of having received the statutory certification (or language translation, if necessary), unless you believe in good faith that the acknowledged POA (i) is not valid; (ii) that the agent is acting outside of his or her authority; or(iii)if you make or have actual knowledge that another person has made a report to the Adult Protective Services Division of the Washington State Department of Social and Health Services stating a good faith belief that the principal may be subject to physical or financial abuse, neglect, exploitation or abandonment by the agent or a person acting for or with the agent. Of course, you are not required to accept an acknowledged POA if you are not otherwise required to engage in the transaction with the principal in the same circumstances.
You may not, however, insist on a certain form of acknowledged POA, nor can you refuse to accept an acknowledged POA simply because you believe it is too old.
Wrongful refusal to accept an acknowledged POA can result in the agent obtaining a court order requiring you to accept the acknowledged POA, along with your being ordered to pay the agent’s attorney’s fees for having had to seek the court order.
Note: You are protected when you reasonably rely on an acknowledged POA in good faith without actual knowledge that it is void, invalid or terminated or that it is being misused by the agent. The issue of when any organization has “actual knowledge” is usually a thorny one, but the Washington UPAA includes an additional safe-harbor provision: A person that conducts activities through employees is without actual knowledge of a fact relating to a power of attorney, a principal or an agent if the employee conducting the transaction involving the power of attorney is without actual knowledge of the fact.
 Like many “uniform” acts as they are eventually adopted by individual states, the Washington state version of the UPAA contains numerous variations from the version proposed by the Uniform Law Commission in 2006.
 Home care providers, care providers at an adult family home or long-term care facility in which the principal resides, and individuals related to the principal by blood or marriage are not considered disinterested witnesses.
 Under the Washington UPAA, “‘acknowledged’ means purportedly verified before a notary public or other individual authorized to take acknowledgments,” i.e. notarized, not merely witnessed.
 Note that “incapacity” is limited to “inability of an individual to manage property, business, personal or health care affairs because the individual” (i) has an impairment in the ability to receive and evaluate information or make or communicate decisions even with the use of technological assistance; or (ii) has absented himself or herself and that his or her whereabouts is unknown and cannot with reasonable diligence be ascertained, or has been reported or listed as missing in action, or interned in a neutral country, or captured by the enemy during a state of hostilities exists between the U.S. and any other power and for one year thereafter; or (iii) is outside the United States and unable to return.
 It should be noted here that there is Washington case law saying that a guaranty may, in some circumstances, be a gift, at least for community property purposes.
Before proceeding, please note: If you are not a current client of Lane Powell PC, please do not include any information in this email that you or someone else considers to be confidential or secret in nature. Prior to the establishment of a lawyer-client relationship, unsolicited emails from non-clients containing confidential or secret information cannot be protected from disclosure.