Power Of Attorney
Like a Health Care Proxy, a Power of Attorney creates a fiduciary relationship between the principal and the agent. However, instead of giving the agent the authority to make medical and health care decisions, the Power of Attorney gives the agent the authority to make legal and financial decisions for the principal.
Your spouse suffers a stroke or another medical emergency. You want to access a bank account, a certificate of deposit, or deal with other assets such as an automobile or stock. You may even want to transfer or sell your home. Without a Durable Power of Attorney the courts become involved. The court will have to appoint a conservator for your spouse. By signing a Durable Power of Attorney, the emotional and financial burdens and the oftentimes lengthy court process associated with a conservatorship can be eliminated.
- What It Does. A Power of Attorney names an agent who is referred to as your “Attorney-In-Fact.” Although a Power of Attorney authorizes the “Attorney-In-Fact to make legal and financial decisions for the principal, it does not prevent the principal from also participating in his or her legal and financial decisions.
- Durable. If the Power of Attorney is “Durable”, it means that the document continues to be valid even if the principal becomes disabled or incapacitated.
- Powers. The following is a non-exhaustive list of actions the designated Attorney-In-Fact is authorized to perform: conduct banking transactions; file and receive tax returns; rent, mortgage, or sell real estate; make gifts from your assets; apply for public assistance; and deal with the United States Post Office.
- Duration. A Power of Attorney terminates upon the death of the principal, upon the agent’s receipt of a notice of revocation, or when the principal signs a new Power of Attorney.
- Privacy. The financial transactions made by an Attorney-In-Fact are not public records. This helps to ensure that the financial transactions will remain private and confidential.
- Successor Attorneys-In-Fact. Although a successor Attorney-In-Fact is not required, it is strongly suggested that you choose a successor Attorney-In-Fact to be named in your Power of Attorney. If your primary Attorney-In-Fact cannot serve because they have died, declined to serve, resigned, or become incapacitated, your successor Attorney-In-Fact can serve.
- Assurance and Insurance. Obviously, while the law does not require that you have a Durable Power of Attorney, the law also does not require that you have homeowners insurance, but wouldn’t you be thankful that you have that insurance if there was a fire or a burglary? Likewise, you will be fortunate if you or your loved ones never need to use a Power of Attorney, but you will have peace of mind that the document is available in the event of a disability or incapacity.