What You Should Know About the Upcoming Changes in Estate Planning Law

What You Should Know About the Upcoming Changes in Estate Planning Law

North Carolina law governing power of attorneys (POAs) is changing in a big way.  North Carolina has adopted a revised version of the Uniform Power of Attorney Act.  The changes go into effect beginning January 1, 2018 and will completely overhaul this area of estate planning.  Below are some highlights of the changes:

  1. The Act repeals (most of) Chapter 32A and enacts Chapter 32C. Chapter 32A of the NC General Statutes currently governs POAs. However, once the new law goes into effect, Chapter 32C will mostly govern POAs.   Article 3 and Article 4 of Chapter 32 will continue to govern Health Care POAs as well as consent to health care for minors.

 

  1. The Act applies to all POAs (with some exceptions). The Act will apply to all POAs created before, on or after January 1, 2018 unless the POA provides a clear indication of contrary intent or the application of the new law would substantially impair the rights of a party.  Additionally, if a POA was created prior to January 1, 2018, N.C.G.S. 32A-2 still governs the authority of the powers conferred in the POA.

 

  1. All POAs are durable unless stated otherwise. The new Act defines a durable POA as one that does not terminate upon the incapacity of the principle. According to N.C.G.S. 32C-1-104, a POA is durable unless it expressly provides that it is terminated by the incapacity of the principal party.  This is in direct contradiction to the old law which required the POA to expressly state it would not be affected by the principal’s later incapacity.

 

  1. The Act provides more protections. It is an unfortunate reality that agents have used POAs to financially abuse the principal.  For that reason, there are several protections in place in the new Act to address those issues.  Of specific note, the Act requires the principal to expressly grant certain powers to the agent.  Powers that require an express grant of authority include, but are not limited to, gift making, delegation of authority under the POA, and creating or changing rights of survivorship and/or beneficiary designation.

 

While these are a few of the bigger highlights, it’s still only a brief overview of a very big change in the law.  it’s important to speak with a knowledgeable North Carolina estate planning attorney soon to find out how your specific situation will be affected by the new laws.

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