Connecticut recently changed its Power of Attorney law (see Public Act 15-240) to keep up with financial transactions in the 21st century. The prior law had been in effect since 1965, before online banking, cell phones and even personal computers existed.
A Power of Attorney (PoA) is a document you (the Principal) sign naming the person you want (Agent) to act on your behalf regarding all financial decisions. The new PoA law expands an Agent’s authority over your financial affairs with “special powers” including:
• amending inter vivos trusts;
• giving gifts;
• changing beneficiary designations;
• authorizing another person to exercise authority under the PoA;
• waiving rights to be a beneficiary of a joint and survivor annuity;
• disclaiming or refusing an interest in property;
• making decisions regarding rights of survivorship;
• exercising fiduciary powers; and
• managing digital assets.
Along with this expansion of powers, the law clearly spells out to Agents their obligations as your fiduciary. These duties include:
• keeping good records;
• avoiding conflicts of interest;
• working with your health care agent;
• following your estate plan; and
• following your wishes to the extent they are known.
The law provides better protection from the abuse of powers by providing remedies through the Probate Courts. Additionally, Probate Courts now have increased authority to oversee problems that may occur while following a Power of Attorney.
It is extremely important that you keep this document in a safe place since it is an active document (copies of the document are also legally enforceable). However, it is important to note here that the new law also provides that the filing of a divorce or separation action automatically revokes the designation of a soon to be ex-spouse without any further action required on the Principal’s part.
With the recent expansion of powers authorized by Connecticut’s Power of Attorney law, it is more important than ever that you review your PoA to make certain the person you named as your Agent then is still the person you want and trust to manage your finances now.