A durable power of attorney is among the most important legal documents that you may establish.
A durable power of attorney for money, or financial power of attorney, is a straightforward, affordable, and dependable method to choose someone to handle your responsibilities if you become disabled.
While a financial power of attorney is an excellent document to have for yourself, it may also be an invaluable benefit for your family. Suppose you become unable to make your own decisions and have not established a durable power of attorney. In that case, a court procedure is almost inevitable. At the very least, your spouse, closest living relatives, or partner will have to petition the court for control over portions of your monetary affairs.
Regarding the Power of Attorney
A power of attorney is one of the most critical legal papers you create. This legal instrument empowers another individual to act on behalf of the creator of the power of attorney. The specific responsibilities are determined by the terms of the power of attorney. A person granting a power of attorney may make it very wide or restrict it to specific activities. Here’s a more in-depth elaboration on how to get power of attorney.
What is the Purpose of a Power of Attorney?
A power of attorney may be used to authorize another individual to execute a contract or sell property on the principal’s behalf. It may be used to delegate power to another person to handle health care decisions, make financial decisions, or sign legal papers on behalf of the principal when the principal cannot do so for one purpose or another. Finally, the Power of Attorney appoints another person to do any legal act that the principal might do with few exceptions.
A general power of attorney provides the attorney-in-fact with extensive authority to do nearly any legal act on behalf of the principal. When an elder law attorney creates a general power of attorney, the document still specifies the kind of actions the attorney-in-fact may do. However, these powers are far broader than those in a lLimited power of attorney. People often execute general powers of attorney to prepare for the day when they cannot manage their affairs. By executing a general power of attorney, individuals appoint someone to act on their behalf.
What is a Durable Power of Attorney?
Durable powers of attorney expire when and if the principal loses the ability to act. An example of such a situation is if the principal suffers from Alzheimer’s disease and becomes mentally unfit to attend to their own affairs. If a power of attorney expires under such a circumstance, it is unlikely that the principal will receive proper assistance. A power of attorney is vital for individuals unable to act for themselves.
To address this issue, the law established a durable power of attorney that continues to be effective (durable) even if the principal becomes disabled. The sole difference between a durable power of attorney and a standard one is the addition of language stating that the power endures even in the case of the principal’s incapacity. However, even a durable power of attorney may be revoked in certain instances, mainly through judicial actions. Today, the majority of power of attorney is durable.
Attorney-in-Fact Responsibilities
While powers of attorney may be used for almost anything, an attorney-in-fact can only do the activities specified in the powers of attorney. Powers of attorney must be written simply so that both the attorney-in-fact and third parties understand what the attorney-in-fact is authorized to do and what the attorney-in-fact is not authorized to do. If you are unclear whether you are permitted to do a specific act as attorney-in-fact, you should ask the attorney who produced the agreement.
Utilization of a Durable Power of Attorney
A power of attorney becomes effective immediately upon the principal’s signature unless the principal specifies that it will become effective only upon the occurrence of some future event. These are referred to as springing capabilities since they activate in response to a specific event. The most usual occurrence is that the power of attorney becomes effective only upon the principal’s disability, incapacity, or incompetence.
Financial Management and the Attorney-in-Fact Liability
You can also be a fiduciary to the principal as an attorney-in-fact. A fiduciary is responsible for managing another’s affairs, even if just a portion of those affairs is handled. A fiduciary owes it to the principal to act prudently and adequately in managing the principal’s affairs. You are accountable to third parties as an attorney-in-fact only if you behave imprudently or fail to exercise reasonable care in fulfilling your obligations. If you ever find yourself operating as an attorney-in-fact and are unclear if you are doing the proper thing, get legal assistance to protect yourself and the principal.
Relationship Between a Power of Attorney and Other Legal Instruments
An executor, sometimes known as a personal representative, is the individual who administers another person’s estate after they die. A person’s affairs may be managed by an attorney-in-fact even when they are alive. An executor is designated in a will and may be appointed only through a judicial action known as probate.
Conservators and Durable Powers of Attorney
The courts assign conservators (in certain jurisdictions, guardians) for individuals who are no longer capable of acting in their own best interests. A person who has been designated a conservator by the courts may not exercise a power of attorney legitimately. Suppose you discover that a conservator was appointed before the principal signed the power of attorney. In that case, you must immediately notify your attorney. According to the legislation, whoever initiates the conservatorship procedure must notify the attorney-in-fact.
Conclusion
If a representative is assigned after the power of attorney was granted to you, the court will almost certainly allow you to retain those powers unless there is compelling evidence that you should not proceed as attorney-in-fact or if the court specifies that the principal could not sign the power of attorney If you learn that your principal is the subject of a conservatorship case, you should communicate with your attorney.
