What happens next if the Power of Attorney Resigns?

The resignation of the named agent under a signed Power of Attorney document can create mischief and delay in the management of the daily life and financial affairs of the person who has depended on that agent. Of course, ideally the document names a successor who is still available, and ideally, the agent won’t just drop the ball and leave the principal in the lurch. Ideally, they will turn over the records, the keys, the passwords, and everything that’s necessary. There needs to be an orderly transition.

The next-named agent in the document will want to get a signed Letter of Resignation to show to the various entities s/he has to deal with. It will probably be necessary for this successor agent to sign an Affidavit of Full Force and Effect to provide assurances to the bank, brokerage, etc. that the principal is still alive and the Power of Attorney has not been revoked and is “still in full force” and still has “legal effect.” The bank may not simply allow the successor agent to sign the signature cards on the accounts without signing this kind of document first, but instead of saying what is needed, they may say “this is outdated” or “she has to come in here herself and sign a new power of attorney” or confusing things like that.

Here’s the actual statute, which can be quoted to the financial institution if the successor agent runs into a problem like this:

Section: 46:2B-8.6: Good faith reliance.

6. Good Faith Reliance.

a. Any third party may rely upon the authority granted in a durable power of attorney until the third party has received actual notice of the revocation of the power of attorney, the termination or suspension of the authority of the attorney-in-fact, or the death of the principal.

b. A third party who has not received such actual notice under paragraph a. of this section may, but need not, require that the attorney-in-fact execute an affidavit stating that the attorney-in-fact did not have at the time of exercise of the power actual knowledge of the termination of the power by revocation, the termination or suspension of the authority of the attorney-in-fact, or the principal’s death, disability, or incapacity. Such affidavit is conclusive proof of the nonrevocation or nontermination of the power at that time. If the exercise of the power of attorney requires execution and delivery of any instrument that is recordable, the affidavit when authenticated for record is likewise recordable. This section does not affect any provision in a power of attorney for its termination by expiration of time or occurrence of an event other than express revocation or a change in the principal’s capacity.”

There is also a specific provision in the statute that specifies that the mere passage of time does not negate the validity of a power of attorney. Again, the Affidavit can be signed, and that should take care of this problem.

Call us for advice about fulfilling the fiduciary role under a power of attorney or other estate planning arrangements …….. 732-382-6070