Power of Attorney
As we continue our journey of planning our estate we should discuss POA’s (Power of Attorney). I would like to take a moment to Thank God for computers, websites, and the time to research!
- An important part of lifetime planning is the power of attorney. A power of attorney is accepted in all states, but the rules and requirements differ from state to state. A power of attorney gives one or more persons the power to act on your behalf as your agent. The power may be limited to a particular activity, such as closing the sale of your home, or be general in its application. The power may give temporary or permanent authority to act on your behalf. It can also be made effect immediately, or only upon the occurrence of a future event, usually a determination that you are unable to act for yourself due to mental or physical disability. The latter is called a “springing” power of attorney. A power of attorney may be revoked, but most states require written notice of revocation to the person named to act for you. You can have multiple powers of attorney, one designated power for financial matters and on one person for you medical decisions.
- The person named in a power of attorney to act on your behalf is commonly referred to as your “agent” or “attorney-in-fact.” With a valid power of attorney, your agent can take any action permitted in the document. I found a nice form that walks you completely through all the questions that you will need to answer and is also specifically written for the state you are living in. Lawdepot.com has a free form but it is the usual trial and only allows you one free form. (More on law depot.com below) Often your agent must present the actual document to invoke the power. For example, if another person is acting on your behalf to sell an automobile, the motor vehicles department generally will require that the power of attorney be presented before your agent’s authority to sign the title will be honored. Similarly, an agent who signs documents to buy or sell real property on your behalf must present the power of attorney to the title company. Similarly, the agent has to present the power of attorney to a broker or banker to affect the sale of securities or opening and closing bank accounts. However, your agent generally should not need to present the power of attorney when signing checks for you.
- If you do not have a power of attorney and become unable to manage your personal or business affairs, it may become necessary for a court to appoint one or more people to act for you. People appointed in this manner are referred to as guardians, conservators, or committees, depending upon your local state law. If a court proceeding, sometimes known as intervention, is needed, you may not have the ability to choose the person who will act for you. Few people want to be subject to a public proceeding in this manner so being proactive to create the appropriate document to avoid this is important. A power of attorney allows you to choose who will act for you and defines his or her authority and its limits, if any. In some instances, greater security against having a guardianship imposed on you may be achieved by you also creating a revocable living trust.
Who Should Be Your Agent?
You may wish to choose a family member to act on your behalf. Many people name their spouses or one or more children. In naming more than one person to act as agent at the same time, be alert to the possibility that all may not be available to act when needed, or they may not agree. The designation of co-agents should indicate whether you wish to have the majority act in the absence of full availability and agreement. Regardless of whether you name co-agents, you should always name one or more successor agents to address the possibility that the person you name as agent may be unavailable or unable to act when the time comes.
There are no special qualifications necessary for someone to act as an attorney-in-fact except that the person must not be a minor or otherwise incapacitated. The best choice is someone you trust. Integrity, not financial acumen, is often the most important trait of a potential agent.
I went through all the steps of putting together my power of Attorney form. They will not answer legal questions for you but on the right side of the website opposite of the questions they are asking you to fill out are short explanations. I found this to be very helpful in making the proper decisions. Awarding someone the authority and power to handle your legal and medical affairs certainly should not be taken lightly. Law depot offers a PRO License for one year of $7.99 per month or $95.88 per year. That has to be paid up front. I think that is relatively cheap and gives you ample time to get all our Will’s, trust, power of attorney forms and medical decisions prepared. Don’t forget that we are doing this for our family and a Peace of Mind.