The Akron Legal News

Bill aims to remedy third-party practice of rejecting lawful powers of attorney

KEITH ARNOLD
Special to the Legal News
Published: February 21, 2018

Lawyer and small businessman-cum-legislator Democrat Rep. John Rogers of Mentor-on-the-Lake has championed a bill that addresses a growing problem of third-party institutions rejecting lawful Ohio powers of attorney.

Rogers said he has had a number of POAs refused to be honored in recent years and in his professional capacity.

Reasons that these legal documents have been rejected include the document having been prepared more than six months prior to the presentation date and a successor agent was named on the document.

"Attorneys who draft documents are subject to malpractice if documents they have prepared were done so contrary to law." Rogers said. "Consider the grave consequences that could ensue to a denied client."

House Bill 446 would prohibit a person from refusing to accept an acknowledged power of attorney for a transaction or requiring an additional or different form for any authority granted in a statutory power of attorney.

The measure would be subject to specified exceptions and provide sanctions for a person who fails to comply with the bill's provisions.

A power of attorney document gives authority for someone to act on behalf of another in legal or financial matters, according to a press release published upon the bill's introduction. Elder law and estate planning attorneys commonly use POAs as a tool to plan for the incapacity of their clients.

Rogers shared with members of the House Civil Justice Committee the circumstances of a now-deceased client.

"This senior was wheelchair bound and scheduled a 'Dial-A-Ride' service through the local public transit authority to take him to his financial institution," Rogers began. "Once there, he presented his POA to a (bank) employee, who after reviewing the document advised my client that his POA was not to be honored in its present form.

"Specifically, my client was told that having named a second adult child as a successor agent was not permitted. The employee proceeded to advise my client that the document needed to be redrafted according to their specifications and offered to refer my client to someone in house to help, if necessary."

Rogers recounted when his client called him after the incident and requested Rogers draft another power of attorney.

"I offered to contact the institution on his behalf, but he asked that I redraft the document in accordance with the bank's instructions," the lawmaker said. "I did so, at no expense, but in my opinion, what had happened was unconscionable."

Ohio has enacted the Uniform Power of Attorney Act, which lays out the mandatory language that must be incorporated into clients' documents to comply with Ohio law. In most cases, a power of attorney specifies that it will continue if incapacity occurs and thus, it is known as a durable power of attorney.

HB 446 would prohibit a person from refusing to accept an "acknowledged" power of attorney - one defined as verified before a notary public or other individual authorized to take acknowledgments - for a transaction or requiring an additional or different form of power of attorney for any authority granted in a statutory form power of attorney unless any of the following applies:

• The person has actual knowledge of the termination of the agent's authority or of the power of attorney;

• The person in good faith believes that the transaction is outside the scope of the authority granted to the agent in the power of attorney;

• The person in good faith believes that the power of attorney is not valid.

"In keeping with our desire to cut unnecessary and duplicative red tape in business transactions, this bill will eliminate the need for citizens to pay for two POAs when only one is needed," HB 446 joint sponsor Rep. Bill Seitz, R-Cincinnati, said in the press release "Pride of authorship is an insufficient reason to reject a POA that was properly prepared by a different Ohio attorney."

A failure to comply with the law would result in sanctions with liability to the dishonoring institution for reasonable attorney fees and costs to confirm or mandate the acceptance of the properly prepared and executed document, the lawmaker duo said during testimony.

Eight fellow House members have signed on as cosponsors of the bill, which had not been scheduled a second hearing at time of publication.

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