Kentucky’s New Power of Attorney Law: Do I Need a New Power of Attorney?

Written by Jim Worthington on August 12, 2018

Word is getting around that Kentucky has a new power of attorney law. The new law went into effect on July 14th(the same day that most newly passed Kentucky laws went into effect). Among other things, it requires that Kentucky powers of attorney be witnessed by two disinterested persons. The first question most clients will ask is “Does this mean I have to go back to my lawyer and get a new power of attorney?” And the answer is no. The law specifically provides that if your power of attorney was validly executed when you signed it, i.e., without two witnesses, it is still valid.

Your power of attorney might need to be updated for other reasons. You might have named someone to act for you who can no longer filled that role. Another, more esoteric reason to change your power of attorney is if it is silent about whether someone can make gifts for you. In the past, it would have been silent if you didn’t want the person to be able to make gifts for you. In that case, a quirk of the way the new law was written means you should update your power of attorney to make it clear that your person doesn’t have authority to make gifts for you.

If you don’t already have a power of attorney, you should. It is the best way to designate a person to act for you when you can’t act for yourself. The alternative is the expensive, slow process of having a court appoint a guardian for you.

A power of attorney could be needed for a simple reason, like being away on a business trip when something needs to be signed. Or, more seriously, you could have lost your mental capacity to make your own decisions. In either situation or anywhere in between, you use a power of attorney to name a person to act for you when you can’t act for yourself.

This person is obviously someone you need to trust a great deal. Assuming your power of attorney grants broad powers, he or she will be able to access your bank and investment accounts, pay your bills, list and sell your house, deal with taxes, and possibly even change beneficiaries of your life insurance policies and retirement plans.

Some people are understandably reluctant to give someone that much power. They want the power of attorney not to take effect unless they are incapacitated. This is called a springing power of attorney. While it sounds appealing, the problem with it is that there may be a delay finding someone able and willing to put in writing that you have reached that level of incapacity. The whole point of the power of attorney is to avoid the guardianship delays so it doesn’t make sense to introduce another kind of delay into having the power of attorney take effect.

A simpler solution is to go ahead and make the power of attorney immediately effective but don’t give a copy to anyone. You’ll need to let the person or persons named in it know where to find it so they can get to it when it’s needed. But, if you change your mind and don’t trust that person anymore, you can just tear it up and write a new one. If you go this route and put the original in a locked cabinet or safe, make sure to let someone know where to find the combination or the key.

A careful reader will notice that the preceding paragraph addressed originals and copies. Even in this age of scanned documents, it is important to have the original. Powers of attorney used to sell or deal with real estate must be recorded in the County Clerk’s office and that office will usually only record originals. But, in other situations, the new law makes clear that a copy is sufficient.

In summary, if you have an existing power of attorney, it’s a good idea to look at it and see if it needs updating. If it doesn’t, then it will still be effective under the new law. If you don’t have a power of attorney, you should definitely talk with an experienced lawyer about drafting one.