Saturday, July 19, 2014

Pennsylvania Income Tax Deduction for 529 Plan Contributions Explained


A 529 Plan is a tax advantaged way to save for the college costs facing your children or grandchildren. It’s named after a section of the Internal Revenue Code. Withdrawals made from 529 plans for qualified education expenses are free of federal income taxes. And there can be state tax advantages as well.  
With the cost of college soaring, it’s little wonder that 529 plans have become very popular. The College Savings Plans Network reports that more than $227 billion is invested in 529 plans across the country.   
More and more grandparents are using 529 plans to set aside some of their wealth to help finance college for their grandchildren. According to a 2013 survey 14% of 529 plan investors are grandparents. 
Pennsylvania offers particularly strong tax support for grandparents who want to save for their grandchildren educations by contributing to 529 plan accounts. But the deduction rules can be tricky, especially for married couples.
Recently, the Pennsylvania Department of Revenue updated its online clarification of the deductibility rules for contributions to 529 college plans. Here is the Department’s 06/18/2014 update:
Could you please clarify the new deductibility rules for contributions to 529 college plans? Specifically, what is the limit per beneficiary per year? And for a married couple, does that mean each spouse may deduct up to the maximum contribution amount per beneficiary per year, or is it only the maximum contribution amount per couple per beneficiary per year? If it's a total of the maximum contribution amount per couple per beneficiary per year, does it matter if, say, one spouse contributes a larger portion of the maximum contribution amount and the other spouse contributes the other smaller portion? (I'm referring to state tax rules, of course, not the federal.)
For tax years 2006, 2007 and 2008, the maximum contribution limitation was $12,000 per beneficiary, per taxpayer, per year, up to the amount of taxable income (if less than the $12,000 per beneficiary, per taxpayer limit).
For tax years 2009, 2010, 2011 and 2012, the maximum contribution limitation was $13,000 per beneficiary, per taxpayer, per year, up to the amount of taxable income (if less than the $13,000 per beneficiary, per taxpayer limit).
For tax years beginning on or after Jan. 1, 2013, the maximum contribution limitation has increased to $14,000 per beneficiary, per taxpayer, per year, up to the amount of taxable income. A married couple, who could previously contribute $12,000 or $13,000 each per beneficiary, per year as long as there was sufficient taxable income for each spouse may now contribute $14,000 for each beneficiary. Where the married couple with one beneficiary could contribute up to a total of $24,000 or $26,000, a married couple with one beneficiary may now contribute a total of $28,000. Each may contribute up to $14,000 (limited by the amount of taxable income) per beneficiary.
For example, if one spouse had taxable income of $19,000 and the other only $9,000, the contribution deduction for a one beneficiary contribution scenario on a joint return would be limited to $23,000 (a $14,000 deduction for the spouse with $19,000 of income and a $9,000 deduction for the spouse with $9,000 of income). If each spouse had taxable income in excess of $14,000 and one spouse contributed $19,000 and the other spouse contributed $9,000, the maximum deduction the couple could take on a joint return is limited to $23,000 (a $14,000 deduction for the spouse who made the $19,000 contribution and $9,000 contribution for the spouse who made the $9,000 contribution) for a one beneficiary contribution scenario.
Note that a grandparent can make a contribution on behalf of a beneficiary and take the deduction even if the beneficiary’s parents make maximum contributions of $14,000 each. The contribution limit is determined on a taxpayer by taxpayer basis. Not a beneficiary by beneficiary basis. See: http://tinyurl.com/pc96b47.
Many states and the District of Columbia offer a deduction or state tax income tax credit for contributions to an in-state plan. Pennsylvania goes a step further and gives you the income tax deduction even if you use an out-of-state 529 plan. (For considerations on whether to use and in-state or out of state plan see The 529 question: In-state or out-of-state?, but note that the article is relatively old – from 2008).  
Potential bonus: Pennsylvania State Treasurer Rob McCord has noted that 529 Plan accounts owned by grandparents are NOT subject to Pennsylvania Inheritance tax. See, http://tinyurl.com/nrhhsvr.

Thursday, July 17, 2014

How to Find a Good Lawyer for Older Adult Issues



Older adults face many legal issues. Some of the most complicated relate to planning for continued life (life care planning), rather than for death (estate planning).  
Planning for aging, possible incapacity, and the potential need for expensive long term care can be particularly complex and requires expert legal help.  But it is difficult for the consumer to be able to identify lawyers who have the training and experience required to provide the expert guidance needed.   
Planning for senior issues like incapacity and long term care is an important aspect of the services provided by what have become known as “elder law attorneys.”   Unfortunately, in most states any lawyer can say he or she practices elder law or hold themselves out as being an “elder law attorney” even if the lawyer has little or no experience with the issues that are especially important to older adults. This means seniors must be particularly cautious in choosing a lawyer and carefully investigate the lawyer before hiring.  
This article contains some tips you can use to find a lawyer who can provide older adults with high quality specialized legal services.  
Certification 
A Certified Elder Law Attorney (CELA) is a lawyer who has met the rigorous standards for certification in the field of elder law set by the National Elder Law Foundation (NELF).  In Pennsylvania, where I practice, the Supreme Court has approved the NELF certification process and permits lawyer who have been certified by the Foundation to state that they are certified elder law attorneys.  
Lawyers who have not met these rigorous standards are not permitted to refer to themselves as CELAs. This means that the CELA professional designation provides a measure of assurance that the lawyer has an in-depth working knowledge of the legal issues that impact the elderly, including long term care.  It is somewhat akin to Board Certification for Physicians. 
There are CELAs located in most areas of the country. A listing of those attorneys can be found on the NELF website at www.nelf.org.  But some geographic areas are unrepresented. There are presently only 45 CELAs in Pennsylvania.
Other Resources
What can you do to find qualified elder law help if there no CELAs in your community? How can you find lawyers who have the knowledge and experience required?
You may want to start by seeking recommendations from friends who have received professional help with senior planning issues.  Who did they use?  Were they satisfied with the services they received?  Hospital social workers, Alzheimer and other support groups, accountants and other financial professionals can also be good sources of recommendations. 
Questions to Ask
To have an issue addressed properly, the senior planning client needs a lawyer who devotes a substantial part of his or her practice to your issue of concern.  Experience is a critical platform for quality services in most professional areas, especially law.
For example, if your family member needs long term care planning, you shouldn’t hesitate to ask the lawyer what percentage of his practice involves long term care planning.  Or, you could ask how many new long term care planning cases the law office handles each month.  There is no correct answer.  But there is a good chance that a law office that assists with two nursing home placements a week is likely to be more up to date and knowledgeable than an office that helps with two placements a year
Ask whether the lawyer is a member of any Elder Law planning organizations.  Is the lawyer involved with committees of state bar organizations that have to do with senior issues?  If so, has the lawyer held a position of leadership or authority on the committee?   Does the lawyer lecture on your issue of concern?  If so, to whom?  (For example, if the lawyer is asked to teach other lawyers about elder law and long term care planning, that is a pretty good sign that the lawyer is considered to be an expert in those areas by people who should know.)  
If the lawyer lectures to the public, you or a family member might try to attend one of the presentations. This should help you decide if this is the lawyer for you.
NAELA and State Bar Associations
The leading national organization of elder law attorneys is the National Academy of Elder Law Attorneys (NAELA): check www.naela.org for a listing of its members.   
NAELA has thousands of members and there is a good chance that there will be one or more members of NAELA in your geographic region.  While mere membership in the Academy is open to any lawyer and provides no assurance that the attorney is an experienced elder law practitioner, membership does at least show that the lawyer has some interest in the field.  
In addition, NAELA (and many state bar associations) run educational sessions to help lawyers stay current on the latest aspects of elder law and issues like long term care planning.  Attending these sessions takes time and commitment on the part of the lawyer and is a good sign that the lawyer is attempting to stay up to date on nursing home issues. You may want to look for an attorney who is a member of NAELA and/or of your state bar Elder Law Committee or Section and has recently attended one or more of its educational sessions.  
If the lawyer has been a speaker at one of the NAELA or State Bar elder law educational programs, that is an even better sign of recognized competency in the field. 
Life Care Planning
Some elder law firms offer “life care planning services” to provide continuing ongoing support and guidance to older adults and their families. These firms take a holistic approach and supplement their legal services with care coordination and advocacy support to help families respond most effectively to the changing challenges of aging, chronic illness and disability. Many of these firms are members of the Life Care Planning Law Firms Association
Life care planning can help relieve the physical, emotional and financial stress for families struggling to deal with the demands of caregiving. The Life Care Planning law firm helps the family locate available resources and employ the right caregivers and preserve the family’s physical, financial and emotional resources. It helps the family keep the older adult at home for as long as possible, and make the best residential transition if that ever becomes necessary.
The goal of life care planning is to promote and maintain the health, safety, well-being and quality of life of the elder client, whether the client is at home or in a residential facility. More information about life care planning and a list of law firms who are members of the Life Care Planning Law Firms Association is available at https://lcplfa.org.  
Lawyer Ratings
Finally, the internet has become an incredible resource for finding just about anything you need.  This includes an elder law attorney. By now most lawyers have websites.  Do a search on “elder law” and your city and you are likely to find quite a few lawyers show up in the listing. You can then check out the lawyer’s website.  Many lawyer websites are just glossy advertisements written by marketing firms, but some have content actually written by the lawyer. At the very least, you can read the lawyer bio page to get some useful information. 
There are quite a few lawyer rating sites available on the internet.  These include AVVOSuper Lawyers, and Best Lawyers in America.  The internet is filled with ratings, of course. Google assigns a PageRank score to every Web site it indexes, Yelp rates restaurants, Standard & Poor's rates stocks and bonds, etc. But rating lawyers is tricky and subjective, and information can be stale. I once represented the family of a lawyer who had suffered for many years from Alzheimer’s. 7 years after he retired from practice he still was being given the top rating possible by one of the best known rating companies.  I checked his ratings again, 3 years after his death – he still had an “A” rating from that company.   
So, while lawyer ratings services can provide some useful information (for example, AVVO tells you whether a lawyer has ever been disciplined for misconduct), they should be viewed with a measure of caution.
Consumer Beware
Bottom line: When you need legal help with a senior issue, it is critically important that you find a qualified law firm that is experienced in dealing with your particular issue of concern. Be smart and don’t fall into the trap of thinking that all lawyers are equally knowledgeable about your issue.  They are not. Do some homework before choosing your attorney.
Lawyers love Latin terms and there is one that you should remember as you search for an elder law attorney - “Caveat Emptor” – which means “Buyer Beware.”

Monday, July 14, 2014

Aging in Place with LIFE (PACE)



Numerous studies reflect that a large majority of older adults want to continue to live at home for as long as possible.
But “aging in place” can become difficult if we begin to suffer functional and cognitive losses and are no longer able to live fully independently. The burdens placed on our family caregivers can become overwhelming.
In recent years, the expansion of community-based and home care support services has allowed many seniors who would have otherwise been required to move to a nursing home to remain at home. This article is intended to alert readers to the existing of one such program that has benefited a number of my clients and their families. It is a program that I think is underappreciated.  
The LIFE program provides health-care and supportive services for older persons who are certified to need a nursing home level of care but are able to live safely at home with the program’s support. If you have limited financial resources and your income is within 300 percent of the Federal Benefit Rate ($2,163 in 2014) your participation in the LIFE program may be fully covered by a combination of Medicaid and Medicare. (And private payment may be an option for those who do not qualify for those programs).  

On a national level, this wonderful but underutilized program is referred to as PACE (Program of All-inclusive Care for the Elderly). The name was changed in Pennsylvania to avoid confusion with our state pharmaceutical assistance program. The Pennsylvania program is generally referred to as LIFE (Living Independently For Elders).

The LIFE program brings together all the medical and social services needed to provide community-based care for seniors who are frail enough to meet the Medicaid standards for nursing-home care. The program is designed to meet all of its participants health related needs. You are generally provided with transportation to and from your home to an adult day health center where you can participate in activities and medical appointments. However, services may also be given in your home, a hospital, or a long term care facility where necessary.

Because the LIFE interdisciplinary health care team authorizes and coordinates all your health care services, the program becomes a one-stop alternative that simplifies your access to health care. And increased coordination of your care can result in improved quality of that care.

The Balanced Budget Act of 1997 established the PACE model as a permanent provider type under both the Medicare and Medicaid programs. Most LIFE participants are eligible to receive services under both Medicare and Medicaid. The joint funding sources may be sufficient to provide total care for dually eligible beneficiaries.

Like another home care alternative - the Aging Waiver Program, LIFE serves individuals who are 60 years of age or older, who would otherwise qualify clinically to be in a nursing facility, but who choose instead to remain in their homes with the support of LIFE program services. (The age threshold for LIFE can be reduced to age 55 depending on the program). Clinical eligibility for participation in LIFE programs is determined through an assessment done by the local Area Agency on Aging, in cooperation with the individual’s personal physician.

To qualify for Medicaid payment for LIFE services, the individual’s available income and available resources must be at or below 300% of the federal benefit rate. The available resource ceiling is $8,000. Limited “spend down” is available since the LIFE program rules do allow individuals with income in excess of the ceiling to qualify for partial Medicaid funding by paying a monthly share of the cost of LIFE services, with Medicaid paying the monthly remainder. If an individual wishes to pay privately for participation in the LIFE program, his/her monthly premium is equal to that amount that would otherwise be paid by Medicaid.

Enrollment is voluntary. Once enrolled, PACE becomes the sole source of all Medicare and Medicaid covered services, as well as other medical, social, or rehabilitation services required by the enrollee. If an enrollee requires placement in a nursing home, the LIFE provider is responsible for the cost of care. An enrollee’s needs are determined by PACE’s team of care providers, which includes primary care physicians, nurses, therapists, social workers, personal care attendants, dieticans, and drivers.

With capitation plans like PACE, providers receive a flat monthly fee in return for covering the entire spectrum of care for enrollees from acute to long-term. The payment does not vary no matter how many services are provided. This provides a strong incentive for the LIFE program to keep its participants healthy.

Pennsylvania has one the most vigorous PACE programs in the country. People can thrive under the program. But many seniors are unaware of or don't understand the value of the LIFE alternative. And, depending on where you live, it may not be an option for you. As of July 2014, LIFE is available in many but not all geographic areas of Pennsylvania. A list of areas and providers is available on the PA Department of Public Welfare website: http://tinyurl.com/mgs33q8.  For your ease of reference I’ve reproduced the list below.

National information about PACE and a list of programs in each state is available on the Pace4You website at http://tinyurl.com/nlxxlgp.   
Here is a list of the 23 LIFE programs currently operating in Pennsylvania:

Albright LIFE Williamsport
901 Memorial Avenue
Williamsport, PA 17701
Ph: 570-322-5433
URL: click here to visit website 

NewCourtland LIFE
5457 Wayne Avenue
Philadelphia, PA 19144
Ph: 267-335-1500
URL: click here to visit website 

LIFE Lutheran Services, Inc.
840 Fifth Avenue
Chambersburg, PA 17201
Ph: 717-264-5433
E-mail: info@lifelutheranservices.org
URL: click here to visit website 

LIFE Butler County
231 West Diamond Street
Butler, PA 16001
Ph: 724-287-5433
URL: click here to visit website 

LIFE St. Mary
Attention: Erin Williams
2500 Northgate Road
Trevose, PA 19053
Ph: 267-991-7600
E-mail: ewilliams@stmaryhealthcare.org
URL: click here to visit website 

LIFE Geisinger - IHM Center
Attention: Maria Maletta Hastie
2300 Adams Avenue
Scranton, PA 18509
Ph: (800) 395-8759
Fax: (570) 558-6161
E-mail: mchastie@geisinger.edu
URL: click here to visit website 

Senior LIFE Johnstown
401 Broad Street
Johnstown, PA 15906
Ph: 877-998-LIFE
E-mail: info@seniorLIFEpa.com
URL: click here to visit website 

LIFE Lawrence County
PA 16101
Ph: 724-657-8800
URL: click here to visit website 

Senior LIFE Uniontown
89 W. Fayette Street
Uniontown, PA 15401
Ph: 877-998-LIFE
E-mail: info@seniorlifepa.com
URL: click here to visit website 

Senior LIFE Washington
2114 N. Franklin Drive
Washington, PA 15301
Ph: 877-998-LIFE
E-mail: info@seniorlifepa.com
URL: click here to visit website 

Albright LIFE Lancaster
417 W. Frederick Street
Lancaster, PA 17603
Ph: 717-381-4320
URL: click here to visit website 

LIFE - Pittsburgh
One - Parkway Center - 875 Greentree Road
Suite 200
Pittsburgh, PA 15220-
Ph: (412) 388-8042
URL: click here to visit website 

SeniorLIFE Lehigh Valley
2045 Westgate Drive, Suite 100
Bethlehem, PA 18017
Ph: 484-895-4302

Community LIFE
2400 Ardmore Boulevard
Suite 700
Pittsburgh, PA 15221-
Ph: (412) 436-1320
URL: click here to visit website 

Mercy LIFE
1900 South Broad Street
Philadelphia, PA 19145
Ph: (215) 339-4747
URL: click here to visit website 

LIFE - University of Pennsylvania School of Nursing
4508 Chestnut Street
Philadelphia, PA 19139
Ph: (215) 573-7200
URL: click here to visit website 

LIFE Beaver County
131 Pleasant Drive, Suite 1
Aliquippa, PA 15001
Ph: (724) 378-5400
URL: click here to visit website 

LIFE - NWPA
149 West 22nd St.
Erie, PA 16502
URL: click here to visit website 

SeniorLIFE Greensburg
123 Triangle Drive
Greensburg, PA 15601
Ph: 724-838-8300
E-mail: info@seniorlifepa.com
URL: click here to visit website 

LIFE Geisinger - Roosevelt Court Center
Attention: Marc Varano
1100 Spruce St., Suite 100
Kulpmont, PA 17834
Ph: 866-230-6465
Fax: 570-373-2101
E-mail: mavarano@geisinger.edu
URL: click here to visit website 

Senior LIFE York
1500 Memory Lane Ext.
York, PA 17402
Ph: 877-998-LIFE
E-mail: info@seniorlifepa.com
URL: click here to visit website 

Albright LIFE Lebanon
113 South 9th Street
Lebanon, PA 17042
Ph: 717-376-1133
URL: click here to visit website 

Senior LIFE Ebensburg
429 Manor Drive
Edensburg, PA 15931
Ph: 877-998-LIFE
E-mail: info@seniorlifepa.com
URL: click here to visit website 

Thursday, June 19, 2014

Pennsylvania Revises Law on Powers of Attorney



Pennsylvania has enacted broad changes to the law governing powers of attorney. House Bill 1429 (HB 1429) was unanimously passed by the state House and Senate and signed into law by the Governor on July 2, 2014 (as Act 95). It represents the culmination of over 3 years of work and negotiation by interested groups, including the Pennsylvania Bankers Association, the Pennsylvania Association of Elder Law Attorneys (PAELA), the Pennsylvania Bar Association, the Joint State Government Commission, and the legislative staffs of Senator Greenleaf and Representative Keller.
HB 1429 revises Title 20 Chapter 56 (20 Pa.C.S. §§ 5601 - 5612) – the law which governs powers of attorney (POAs) used for financial and property transactions. [Sections 5601 (e.1) and (e.2) provide limitations on the applicability of certain sections of Chapter 56 in commercial transactions and in powers of attorney that provide exclusively for health care or mental health decision making.] Many of the changes draw on the Uniform Power of Attorney Act. But HB 1429 includes some provisions that are unique to Pennsylvania law.
The purpose of this article is to provide an overview of some of the changes made by the new law that are significant from the perspective of an elder law attorney. Chapter 56, as revised by HB 1429, is complex law which requires careful study by any attorney who drafts POAs in Pennsylvania.

Execution

Section 1 of HB 1429 modifies the execution requirements for POAs. For POAs executed on or after January 1, 2015:

  • A POA may be signed by another person on behalf of the principal only if the principal is unable to sign and specifically directs the other individual to sign. [§ 5601(b)(1)]

  • The signature or mark of the principal must be acknowledged before a notary public or other individual authorized to take acknowledgments.  [§ 5601(b)(3)(i)]

  • All POAs must be witnessed by two individuals neither of whom is the agent, or an individual who signed the POA on behalf of and at the direction of the principal, or the notary or other person authorized to take acknowledgments before whom the POA is acknowledged. [§ 5601(b)(3)(ii)]

  • The Notice that the principal is required to sign under 20 Pa.C.S. § 5601(c) is modified. Language is added to warn that the document may grant the agent the power to give away the principal’s property or change how the property is distributed at death. The principal is advised to seek the advice of an attorney at law before signing the POA.  

  • The acknowledgment form that the agent signs under 20 Pa.C.S. § 5601(d) is revised to specify that the agent must act in accordance with the principal’s reasonable expectations to the extent that the agent actually knows them and, otherwise, in the principal’s best interest. The form notes that the agent must act in good faith and only within the scope of authority granted to the agent by the principal in the power of attorney.

Note that the above requirements of a notary, notice, agent’s acknowledgment (and the provisions in section 5601.3 relating to an agent’s duties) do not apply to a POA which exclusively provides for making health care decisions or mental health care decisions. [See 5601(e.2)].

Agent’s duties

Section 5601.3 relates to an agent’s duties. Section 5601.3(a) specifies the general rule: an agent must act in accordance with the principal’s reasonable expectations to the extent actually known by the agent and, otherwise, in the principal’s best interest. The agent must act in good faith (which means “honesty in fact”) and only within the scope of authority granted in the power of attorney.
In addition to the general rule duties, section 5601.3(b) lists other duties that can be modified or waived entirely in the power of attorney. These default duties include acting loyally for the principal’s benefit; keeping the agent’s funds separate from the principal’s (with some stated exceptions); acting with care, competence and diligence; keeping records; cooperating with a person who has authority to make health care decisions for the principal; and attempting to preserve the principal’s estate plan.
The lawyer drafting a POA will want to carefully consider whether any or all of these default duties should be modified or waived entirely. For example, if the client wants his child/agent to have the authority to commingle funds with those of the principal after the date of execution of the POA, this authority can be provided in the document.  
The agent’s default duty to attempt to preserve the principal’s estate plan is of some significance to elder law attorneys who are called on to advise agents about the propriety of actions intended to qualify the principal for Medicaid, VA benefits, or some other program. Transfers of assets may facilitate such eligibility.
Section 5601.3(b)(6) specifies that the agent shall attempt to preserve the principal’s estate plan, to the extent actually known by the agent, if preserving the plan is consistent with the principal’s best interest based on all relevant factors, including all of the following:
(i)  The value and nature of the principal's property;
(ii)  The principal's foreseeable obligations and need for maintenance.
(iii)  Minimization of taxes, including income, estate, inheritance, generation-skipping transfer and gift taxes.
(iv)  Eligibility for a benefit, a program or assistance under a statute or regulation.  
Elder law attorneys know that many of their clients want to authorize their agents to have the authority to act in a manner that will facilitate eligibility for public benefits programs. Thus, inclusion of language which recognizes that public benefits eligibility is an appropriate factor to be considered by the agent was a goal of PAELA. The drafters of the Uniform Power of Attorney Act agree. Section 5601.3(b)(6)(iv) is drawn directly from section 114(b)(6) of the Uniform Act.

Nonliability of an agent

Section 5601.3(c) puts limitations on the liability of an agent. For example, an agent that acts in good faith shall not be liable to a beneficiary of the principal’s estate plan for failure to preserve the plan. And, absent a breach of duty to the principal, an agent shall not be liable if the value of the principal’s property declines.

Disclosure of receipts, disbursement or transactions

Section 5601.3(d) puts limits on the required disclosure of receipts, disbursements or transactions conducted by an agent on behalf of a principal. These limits can be modified in the POA.

Authority that requires specific and general grant of authority

Section 5601.4(a) limits the power of an agent to take certain actions unless authority is expressly granted in the POA and is not prohibited by another instrument. These “hot power” or “express grant” actions that must be specifically authorized are:  
Section 5601.4(b) further limits the exercise of hot power authority by agents who are not in certain family relationship with the principal. However, a POA can be written to specifically opt out of these limitations.
Sections 5601.4(a) and (b) will require careful drafting by the lawyer whose client wants to authorize their agent to have one or more hot powers.  

Limited gifts

Section 5603(a.1) redefines the power to make limited gifts. Unless the power of attorney otherwise provides, language in a power of attorney to make limited gifts or language granting general authority with respect to gifts only authorizes the agent to make gifts in the limited situations described in this section.

Third party acceptance, reliance and liability

Section 5608 addresses the PA Supreme Court decision in Vine v. Commonwealth State Employees’ Retirement Board, 9 A.3d 1150 (Pa. 2010). That case involved the statutory immunity afforded to third parties that act in good faith on the instructions of an agent pursuant to a facially valid POA without actual knowledge that the POA is void or voidable, has expired, or that the agent is exceeding the scope of his authority. HB 1429 legislatively reverses the Vine court’s interpretation of section 5608.
Section 5608 will now provide broad protection for banks and other third parties who in good faith accept a POA. For example, a person who in good faith accepts a POA without actual knowledge that a signature or mark is not genuine may, without liability, rely upon the genuineness of the signature or mark [section 5608(c)].
Section 5608 goes well beyond a “Vine fix” and provides third parties who are asked to accept a POA with a number of options including the right to request additional information and documentation such as an agent’s certification of factual matters, an English translation of the document, and an opinion of counsel that the agent is acting within the scope of the authority granted.
Section 5608.1 rewrites the law on the subject of the liability of a third party for refusal to accept a POA. (Elder law attorneys may prefer the old law on this issue, but it is now history). Sections 5608.1(b) and (d) list various circumstances under which acceptance may not be required.  
Under section 5608.1(c) a person who refuses to accept a POA in violation of section 5608 shall be subject to:
Section 5608.2 provides for actions taken by employees of third parties. A person who conducts activities through employees shall be considered to be without actual knowledge of a fact relating to a power of attorney, a principal or an agent, if the employee conducting the transaction involving the power of attorney is without knowledge of the fact.

Effective date

The amendment or addition of §§ 5601(f), 5608, 5608.1, 5608.2, 5611 and 5612 take effect immediately upon the Governor’s signature. The remainder of the sections of the new law will take effect on January 1, 2015.