Powers of Attorney – What You Need to Know

A power of attorney is a legal document in which you give another person the legal authority to act on your behalf. You, or the person who creates the power of attorney is the “principal” and the person whom you appoint to act for you is the “agent” or “attorney-in-fact.” POAs can be useful if you are traveling or cannot do something yourself in person. Here are some basic facts that you need to know about powers of attorney (“POAs”) under state law.

  1. An attorney-in-fact cannot legally do some things for you, even if you have signed a POA. While a person whom you appoint under a power of attorney has the legal authority to take certain actions for you, he or she does not have the right to represent you in court or make or change a will for you. An attorney-in-fact also cannot take your assets or use your money or make gifts to himself or herself.
  2. An attorneyin-fact can handle many different things for you. These tasks include actions such as the following:
    1. Make bank deposits, withdrawals, or other banking transactions
    2. Buy or sell property
    3. File your tax returns
    4. Pay your bills
    5. Apply for public benefits and handle your retirement benefits
  3. You can limit the powers that you give your agent in a POA. If you only want someone to act on your behalf in one specific circumstance, you can sign a limited POA. For example, a limited POA might allow your adult child to sign legal documents for the sale of your property because you will be out of town during the real estate closing process.
  4. There are different types of POAs, depending on your needs. Available POAs can include:
    1. General Financial POAs allow the agent to conduct any business for you.
    2. Durable Financial POAs allow the agent to conduct any business for you and stay in effect even if you become disabled or otherwise incapacitated.
    3. Durable POAs for Healthcare direct your agent to make healthcare decisions for you.
    4. Limited/Special POAs allow agents to perform only the tasks specified in the POAs, such as getting medical care for children or enrolling them in school.
    5. Military POAs exist under federal law to allow military members to designate agents to perform different tasks, including caring for any minor children.
    6. Financial Institution POAs are special forms that the IRS and some other banks and government agencies require you to fill out if you want someone to handle your business with them.
  5. You can appoint more than one attorney-in-fact. For example, you can appoint your two children to serve as co-attorneys-in-fact, which means that they would need to make decisions and take actions together. You also could appoint alternate agents. If one of your agents is unwilling or unable to take a certain action, the other agent may be able to act on your behalf.
  6. You can still make decisions on your own even if you have signed a POA. If you don’t need your attorney-in-fact to act for you, you can still make the same decisions and take actions as you could before you signed the POA.
  7. You can decide when your POA goes into effect. You can have your POA go into effect immediately, or you can have it go into effect in the future, such as when you are no longer capable or competent to make your own decisions.
  8. A durable POA will remain in effect even after you become unconscious, incapacitated, or unable to make your own decisions. A POA that is not durable will not remain in effect if you are incapacitated; in this situation, your agent will no longer be able to handle any business or decision-making once you become incapacitated.
  9. A POA must meet certain requirements to be legally valid. You must sign the POA in front of a notary or have at least two adult witnesses sign the POA. Neither of the witnesses can be your attorney-in-fact.
  10. You can terminate or end your POA at any time. If you want to terminate or end the POA that you previously signed, you must terminate it in writing and give a copy of your signed statement to any place that had a copy of your POA, such as banks or investment advisors.

The attorneys of LBE Law Firm provide individualized legal representation and services for individuals concerning wills, trusts, and estate law matters, including powers of attorney and other estate planning mechanisms. Our office also handles general legal matters, including immigration law, bankruptcy, family law, and contracts. Contact us today at +1.424.273.5501 (call, text, or WhatsApp) or via email at info@lbelawfirm.com and learn how we can assist you with your legal need.

Previous Post
The Differences Between Wills, Trusts, and Intestacy
Next Post
What Are My Duties and Responsibilities as the Trustee?
Menu