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How Does Washington's New Power of Attorney Statute Impact Banks?



Washington has adopted the Washington Uniform Power of Attorney Act (“The Act”) which becomes effective on January 1, 2017 (ESSB 5635). The Act completely replaces Washington’s current law and has some key differences that need to be considered when a bank accepts a power of attorney. The Act applies to all powers of attorney including those executed prior to the effective date but does not include powers of attorney for health care. The following are some of the issues that may concern the bank and its customers:

  1. Execution. A power of attorney signed after January 1, 2017 must be signed and dated by the principal and either (1) acknowledged by a notary or (2) attested to by at least two witnesses. The witnesses must sign their names to the power of attorney as witnesses or sign a separate affidavit. The affidavit must state facts that are sufficient to prove that the principal was competent and the witnesses saw the principal sign the power of attorney. If a principal is unable to fully sign her name, then (1) the principal may have a person sign for the principal stating that the person signed on behalf of the principal; or (2) the principal can make their mark on the power of attorney. The witnesses cannot be a home care provider or related to the principal or agent by blood or marriage.
  2. Durability. In order for an agent to act on behalf of an incapacitated principal, the power of attorney must include language that the power of attorney is durable.
  3. Co-Agents. If there are two or more co-agents, then the co-agents must jointly exercise their authority unless there is language in the power of attorney that each agent may act independently - both co-agents must sign any documents. However, the co-agents may delegate their authority to each other. So, the co-agents may delegate the power to sign checks to each other so that only one co-agent's signature is required.
  4. Termination of Authority. If a fiduciary has been appointed by the court, then the agent’s authority under the power of attorney terminates unless the court specifies otherwise. A power of attorney that has been given to a spouse or a domestic partner is revoked when an action has been filed to dissolve the relationship.
  5. Powers of Agent. An agent may only create or change a beneficiary designation or rights of survivorship or any other nonprobate transfer at death if the power of attorney specifically includes that grant of power. If the power of attorney contains general wording that the agent has the authority to do all acts that the principal could do, then the agent has general authority under Sections 203 - 218 of the Act. With respect to banks and other financial institutions, the general authority gives the agent broad power over the principal's accounts and banking arrangements, including establishing, modifying or terminating an account; contracting for services; withdrawing funds from the account by check, order, or EFT; receiving statements; accessing a safe deposit box to withdraw or add to the contents; borrowing funds; and negotiating debt instruments; etc. If the principal is the sole owner of a business, then the agent may control and disburse the money in the operation of entity or business.
  6. Time for Acceptance. Unless certain exceptions apply, a power of attorney must be accepted or a request for a certification made within 7 business days after the power of attorney has been presented to the bank. If the bank requests the certification, it has 5 business days after the receipt of the certification to accept the power of attorney.

Many banks have separate certifications that the agent must sign before the bank will accept the power of attorney. Those certifications should be revised to incorporate the new requirements. Section 301 of the Act contains a sample form that may be used by an agent to certify facts for a power of attorney.

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