Navigating Power of Attorney in Vermont: Your Guide as an Agent

"Sorry, we can't disclose that information to you."

Have you ever heard those frustrating words when trying to manage a loved one's affairs, despite holding a valid Power of Attorney? If so, you're not alone. Many agents find themselves wondering why they went through the trouble of getting a Power of Attorney (POA) in the first place. The truth is, the institution is often mistaken.

A Durable Power of Attorney (DPOA) is designed to simplify your life, not complicate it. Unfortunately, financial institutions, insurance companies, universities, and other entities don't always fully understand the law or may be hesitant to comply, often citing privacy concerns. This article will help you understand your rights and how to navigate common challenges.

A person hovers a pen over a document titled "Power of Attorney"

What is a Power of Attorney (POA)?

A Power of Attorney is a legal document that officially grants someone you trust (your "agent" or "attorney-in-fact") the authority to make decisions or handle money on your behalf (the "principal"). Because a POA is a legal document, it is backed by state law, which dictates how businesses and individuals must recognize and respond to it. A Durable Power of Attorney remains effective even if the principal becomes incapacitated.

Where and When Do Agents Use a Power of Attorney?

Agents primarily use POAs when the principal needs assistance managing their affairs, whether due to incapacitation, travel, or simply a desire for assistance. Here are common scenarios where you might use a POA:

Financial Institutions

  • Bank Accounts: Depositing checks, paying bills, transferring funds, withdrawing cash, opening or closing accounts.

  • Investment Accounts: Buying and selling stocks, bonds, mutual funds, and managing portfolios.

  • Retirement Accounts: Managing 401(k)s, IRAs, pensions, and annuities.

  • Safe Deposit Boxes: Accessing contents.

  • Loans: Applying for or managing loans, mortgages, or lines of credit.

Government Agencies

  • Social Security Administration: Handling Social Security benefits.

  • Medicare/Medicaid: Managing healthcare benefits and payments.

  • Veterans Affairs (VA): Managing military benefits.

  • IRS / State Tax Departments: Filing and paying taxes, or responding to audits.

Real Estate Matters

  • Property Transactions: Buying or selling property, signing deeds, contracts, or mortgage documents.

  • Rental Properties: Collecting rent, managing tenants, and arranging repairs.

  • Property Expenses: Paying property taxes and managing home insurance.

Insurance Companies

  • Managing policies, handling claims, and paying premiums for various types of insurance.

Utilities and Service Providers

  • Managing accounts, setting up, changing, or canceling services like electricity, gas, water, internet, and subscriptions.

Courts and Legal Offices

  • Working with lawyers on legal matters, signing legal documents, or initiating/defending lawsuits on behalf of the principal.

A man in a suit pointing to a signature line in a document with another person holding a pen over the line.

How to Effectively Use a Power of Attorney

As an agent, your role comes with significant responsibilities. Here's how to properly use a POA:

  1. Understand Your Authority: Carefully review the POA to know exactly what powers you have (and don't have). A POA can be broad (general) or very specific (limited).

  2. Act as a Fiduciary: This is a crucial legal and ethical obligation. You must always act in the principal's best interest, with care and diligence. This includes:

    • Keeping the principal's money and assets separate from your own.

    • Maintaining meticulous records of all transactions.

    • Avoiding conflicts of interest.

  3. Notify the Entity: Inform the institution or individual that you are acting under the POA.

  4. Present the Document: Always present the physical POA document or a certified copy. While some institutions may accept photocopies, many will require seeing the original or a "certified copy" (a copy verified by the drafting attorney or a court clerk). Do not let them keep your original POA. They may make a copy for their file.

  5. Provide Identification: Have your valid government-issued identification (e.g., driver’s license, passport) ready to prove you are the named agent.

  6. Sign Correctly: When signing on the principal's behalf, clearly indicate your role as the agent. A common and recommended way to sign is:

    • "[Principal's Name] by [Your Signature], [Your Name] as Agent"

Special Note for Real Estate Transactions:

If you are using a POA to complete a real estate transaction, you will need to record the POA with the town clerk's office. It is often best to record the original document. The clerk will record it, stamp it as recorded, and return the original POA to you.

When a Business MUST Accept Your Power of Attorney in Vermont

Vermont's Uniform Power of Attorney Act (14 V.S.A. Chapter 127), effective July 1, 2023, sets clear guidelines for how businesses must handle POAs:

  • Prompt Response: If you present a properly signed and acknowledged (notarized) POA, the business generally has 7 business days to either accept it or request additional information (like a certification, a translation, or a legal opinion).

  • Acceptance After Information: If they request additional information and you provide it, they then have 5 business days to accept the POA.

  • No Proprietary Forms: A business cannot legally demand that you use their specific POA form if the one you presented is already valid and grants the necessary powers.

Woman in a business jacket frowning with her arms crossed in an "x" in front of her

When a Business is NOT Required to Accept Your Power of Attorney

While the law favors acceptance, there are legitimate reasons a business may refuse a POA:

  • Normal Business Rules Apply: If the business wouldn't conduct a specific transaction with the principal directly, they are not obligated to do so just because an agent is presenting a POA. (e.g., they don't offer the service).

  • Against the Law: If honoring the POA would violate federal or state law, they can refuse.

  • Known Termination: If the business has actual knowledge that the principal has revoked the POA or has died, the agent's authority has ended.

  • Unprovided Information: If they made a legitimate request for additional information (within the 7-day window) and you did not provide it, they can refuse.

  • Good Faith Belief of Invalidity/Lack of Authority: If the business genuinely and reasonably believes the POA is invalid, or that the agent lacks the authority for the requested act, they can refuse. This applies even if other information was provided.

  • Suspected Abuse: This is a critical exception. If the business reports (or knows someone else has reported) a good faith belief of physical or financial abuse, neglect, exploitation, or abandonment of the principal by the agent to Adult Protective Services or law enforcement, they can refuse to honor the POA.

Common Barriers and How to Address Them

You might encounter resistance even with a valid POA. Here's how to navigate common issues:

  • "This Power of Attorney is too old."

    • The Reality: In Vermont, a durable POA generally remains valid until it's revoked or the principal dies. Age alone does not invalidate it.

    • Your Response: Explain that Vermont law does not specify an expiration date for durable POAs. If they remain resistant, proceed to escalation steps below.

  • "This Power of Attorney doesn't have a notary stamp or seal on it."

    • The Reality: Vermont's POA law changed on July 1, 2023. POAs executed before this date may be valid without a notary stamp/seal (unless they involved real estate). POAs executed on or after July 1, 2023, require acknowledgment by a notary.

    • Your Response: If your POA predates July 1, 2023, explain that notarization was not generally required for validity at the time it was signed. For POAs created after this date, ensure it is properly notarized. If in doubt, consult a Vermont attorney familiar with POAs to confirm its legitimacy.

  • "We only recognize original Power of Attorney documents, not copies."

    • The Reality: Vermont law generally requires institutions to accept certified copies.

    • Your Response: Be prepared to present the original POA, but never allow them to keep it. They can review the original and make a copy for their records. If they still insist on keeping the original, remind them that a certified copy should suffice, and escalate if necessary.

  • "We only accept our own proprietary POA form."

    • The Reality: Vermont law prohibits institutions from denying a legally valid POA simply because it's not their specific form.

    • Your Response: If the principal still has legal capacity, using the institution's form might be the path of least resistance. However, if the principal lacks capacity or completing a new form is burdensome, calmly refer to Vermont's prohibition against this requirement. A letter from an attorney citing the law and confirming the POA's validity can also be very effective.

  • "We don’t recognize your POA due to concerns for the principal."

    • The Reality: If your behavior or the requested transaction raises genuine red flags about financial exploitation, particularly of an older adult, the institution may refuse the POA. This is a legitimate reason under the law.

    • Your Response: Understand that the institution has a duty to protect vulnerable individuals. If you believe their concerns are unfounded, consider providing additional context or documentation to clarify the situation. If a report has been made to Adult Protective Services, cooperate with any investigation.

Common Drafting Mistakes to Avoid

The validity of your POA heavily relies on its proper creation. Here are frequent drafting errors that can lead to rejection:

  • Improper Execution: Every state has specific requirements for signing, witnessing, and notarizing POAs. Even minor errors, like incorrect signing order, can invalidate the document.

  • Non-Durable POA for Incapacitated Principal: If the POA is not specifically designated as "durable," it automatically ends if the principal becomes incapacitated. It will (and should) be refused in such a situation.

  • "Springing" POA without Proof of Incapacity: If your POA only becomes effective ("springs into action") upon a specific event (often the principal's incapacitation), you must provide formal evidence that the triggering event has occurred (e.g., a physician's letter).

  • Uncommon Phrasing or Formatting: While not mandatory to use, Vermont provides statutory POA forms that are widely recognized. Using highly unusual phrasing or formatting can increase the likelihood of confusion and rejection by institutions unfamiliar with its specific wording. Acceptance often hinges on the reviewing employee's understanding.

Woman wearing glasses looks carefully at a legal document.

How to Respond If Your Power of Attorney Is Not Recognized

If you face resistance, follow these steps:

  1. Ask for the Reason in Writing: Request a written explanation for their refusal. This forces them to articulate a clear justification and helps you understand their specific objection.

  2. Escalate: Ask to speak with a supervisor, manager, or someone from the institution’s legal department. They may have more training or authority to review the document.

  3. Provide Additional Documentation (if requested): If they asked for specific additional information (like a physician's letter for a springing POA), provide it promptly.

  4. Review the POA with Legal Counsel: Consult with a Vermont attorney specializing in POAs. They can confirm the document's validity, advise on your rights, and potentially provide an opinion letter to the institution.

  5. Consider Using the Institution's POA Form (if feasible): If the institution has its own POA form and the principal still has legal capacity, it might be the easiest solution to complete their form, even if you have a valid one already.

  6. Know Your Rights: Be aware that many states, including Vermont, have laws that mandate how quickly financial institutions must respond to a POA presentation. Vermont law may even impose penalties, such as attorney's fees, if they wrongfully refuse a valid document.

  7. Seek Legal Action (as a last resort): If all other avenues fail, it may be necessary to pursue legal action to compel the institution to accept the valid POA. A court can order a business to comply and may even require them to pay your reasonable attorney’s fees and court costs.

How to Ensure Your Power of Attorney Meets Vermont’s Legal Requirements

The most reliable way to ensure your Power of Attorney is legally sound and meets Vermont's requirements is to have a licensed Vermont attorney draft it for you. An attorney can ensure it reflects your specific wishes, complies with current state law, and anticipates potential challenges.

Important Considerations:

  • Keep it Updated: Review and update your POA as circumstances change (e.g., if an agent becomes unavailable, or if your wishes evolve).

  • Out-of-State POAs: If you move to Vermont from another state, do not assume your existing POA will be automatically recognized. While it might be valid, it's always best to have a Vermont attorney review it or create a new one to ensure compliance with Vermont law and to minimize potential issues.

Tony Caccavo

Tony Caccavo understands the needs of Vermonters. As a former educator, world traveler, and family man, he's committed to helping clients navigate the complexities of estate planning and entity formation with clarity and compassion.

https://www.linkedin.com/in/tony-caccavo-74432a4/
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