What You Must Know About It
In 2014 the Hawaii Legislature adopted the Uniform Power of Attorney Act, which was promulgated by the Uniform Law Commission. The Hawaii Act was necessary in order to improve the portability and acceptance of power of attorneys.
The Act reduces the ability of recipients to argue that the power of attorney is stale dated. Most financial institutions in Hawaii would not accept a power of attorney that were older than five years. In addition, Hawaii financial institutions felt uncomfortable with a non-Hawaii power of attorney, and would require originals.
The Hawaii Act makes it clear there is no stale dating of a power of attorney, photocopies have the same effect as the originals, and that a Hawaii financial institution may be liable for refusing a notarized power of attorney unless it follows certain guidelines. The Hawaii Act also includes a statutory form that should be followed as it is easy to use and simply requires initials.
One of the Major Issues
A problem with the Hawaii Act is the issue of how the Hawaii Act impacts prior power of attorneys. The Model Act had a Section 106, where is clarified that:
- “(a) A power of attorney executed in this state on or after [the effective date of this [act]] is valid if its execution complies with Section 105”, and
- “(b) A power of attorney executed in this state before [the effective date of this [act]] is valid if its execution complied with the law of this state as it existed at the time of execution.” The Comment to Section 106 provides, “Section 106 makes clear that the Act does not affect the validity of pre-existing powers of attorney executed under prior law in the enacting jurisdiction, powers of attorney validly created under the law of another jurisdiction, …”
The Hawaii Legislature unfortunately combined the two separate ideas above and somehow came up with the following: “A power of attorney executed in Hawaii on or after January 1, 2015, is valid if its execution complied with the law of this State as it existed at the time of execution.”
It does not state that power of attorneys executed prior to January 1, 2015 are valid. Thus, there is no clear grandfathering of powers of attorney executed prior to January 1, 2015.
The Model Act’s Section 403 was retained and appears at the end of the Hawaii Act. That Section provides, “Except as otherwise provided in this chapter, on the effective date of this chapter: (1) This chapter shall apply to a power of attorney created before, on, or after the effective date of this chapter…” Thus, arguably prior powers of attorney are still valid, but will be evaluated under the new standards.
It may have been better to simply grandfather all prior power of attorneys than to have to judge them against the new Hawaii Act, and to see if they contain the magic wording required of specific grants of authority such as the power to create, amend, revoke or terminate an inter vivos trust, make a gift, create or change rights of survivorship, create or change a beneficiary designation, etc., as well as determining if a general grant of authority was completed (incorporates by reference a subject described or that grants to an agent authority to do all acts that a principal could do).
Why and Where Power of Attorney May Now Be Questioned
Unless the person provides a power of attorney using the new statutory form, a person asked to accept a notarized power of attorney may request in writing an opinion of counsel as to any matter of law concerning the power of attorney.
That opinion of counsel shall be provided at the principal’s expense unless the request was made more than seven business days after the power of attorney was presented for acceptance.
Thus, please contact us if you need assistance with understanding the new Hawaii Uniform Power of Attorney Act.