Power of AttorneyThe power to act on your behalf
Power of Attorney
A Power of Attorney is a legal document in which you name another person to act on your behalf. This person is called your agent or attorney-in-fact. You can give your appointed agent broad or limited management powers.
You should choose your agent for your Power of Attorney very carefully. He or she will be able to sell, invest and spend your assets. A traditional power of attorney terminates upon your disability or death. However, a durable power of attorney will continue during incapacity to provide a financial management safety net.
Questions and Answers about Power of Attorney
What are different types of Power of Attorney?
Durable Power of Attorney -The general and special powers of attorney can all be made “durable” by adding certain text to the document. This means that the document will remain in effect or take effect if you become disabled or incapacitated.
- Special Power of Attorney – This power of attorney delegates limited authority to another person for them to act on your behalf.
- General Power of Attorney – This power of attorney delegates unlimited authority to another person for them to act on your
- Durable Power of Attorney -The general and special powers of attorney can all be made “durable” by adding certain text to the document. This means that the document will remain in effect or take effect if you become disabled or incapacitated.
- Springing Durable Power of Attorney– This power of attorney is called a “Springing” one because it does not become effective until a condition you set is met. For example, you can make the power effective only if accompanied by your physician’s medical assessment that you are incapable of handling your own financial matters due to incapacity.
Who can use a Power of Attorney?
A person who is 18 years of age or older and is of sound mind can use the Power of Attorney as either a Principal, witness or Attorney in Fact.
Who is “the Principal” on the Power of Attorney form?
The Principal is the person who gives the authority to carry out his or her business.
When does the Durable Power of Attorney become effective?
The durable power of attorney remains in effect if you become disabled or incapacitated whereas a simple power of attorney does not. Another difference is that the simple Power of Attorney usually starts and ends on a specific date or upon the incapacity or death of the principal. A Durable Power of Attorney has no specified end date – it ends only upon the death of the principal or upon revocation.
What is an “Attorney in Fact”?
An Attorney in Fact is a person or agent chosen by the principal, who accepts the responsibility. He or she is an adult that the principal can trust to do what the principal directs in writing. An Attorney in Fact has nothing to do with a lawyer or an “attorney at law.”
What is the difference between a Power of Attorney and a Durable Power of Attorney?
The durable power of attorney only goes into effect if you become disabled or incapacitated. Another difference is that the Power of Attorney starts and ends on a specific date or upon the death of the principal. A Durable Power of Attorney has no specified end date – it ends only upon the death of the principal or upon revocation.
Can my Agent under my POA be forced to act, even if he or she does not want to do so?
No. Make sure to appoint alternate Agents. The alternate agent also serves if the primary agent is unable to do so.
I want my child to take care of my affairs when I am no longer able to do so. How can I make sure she will be permitted to act for me?
A Durable Power of Attorney (POA) is the best way to do this. Just creating joint accounts is not always a good choice because of possible tax liabilities and for Medicaid planning. There are many things an agent may need to do other than deal with bank accounts.
Do I need to know the witness?
No. However, you cannot expect that an informed adult will be available to act as a witness at the notary office. In order to be prepared, it is best to take a person willing to be a witness with you to the notary office. Also, it may be helpful to have a person (the witness) know that you executed a Power of Attorney.
May I edit or remove language from the Power of Attorney form?
Yes, but in specific places only. The places for editing the form are indicated by a box to check or a line to mark, where you are given choices of the tasks you want the Attorney in Fact to perform. You may cross out any task you do not want your Attorney in Fact to do, or you may check mark the section you want the Attorney in Fact to perform. Both the principal and agent should initial any changes in these specified places.
How do I revoke a Power of Attorney?
You can revoke a POA by giving written notice to your Agent. It is also a good idea to give notice to any banks, brokerages or other places where the Agent conducted normal business on your behalf. If a POA is durable and you become incompetent, only the court can revoke the POA and then only for good cause.
What do I do with the Power of Attorney after I complete it?
The Power of Attorney does not need to be filed with the Court. Each person who is made your Agent should keep the original of his or her Power of Attorney form in a convenient place so that it can be located easily when needed. Many people will want to see the original Power of Attorney before permitting your Attorney-in-Fact to act on your behalf. At times, a copy of the Power of Attorney may be requested in connection with a particular transaction but the Agent should never release the original. Please see #13 for information on recording the Power of Attorney.