Power of Attorney

The Power of Attorney is an extremely powerful document allowing someone to act on your behalf as it relates to your finances. A Power of Attorney delegates legal authority to one or more people (the Agent(s)) to handle all (or specific) financial decisions and transactions not health care related. Such decisions and transactions include those relating to banking, real estate, insurance, estate matters, property management, investing, legal claims/litigation, retirement account matters, tax matters, and business operating matters.

Principal. The person creating the power of attorney and appointing the Agent(s) is called the Principal. Once signed by the Principal, the Power of Attorney cannot be used until signed by the Agent(s) in front of a notary. At that time, the Power of Attorney becomes immediately effective. Often, a Principal will sign a Power of Attorney but not have their Agent(s) sign until needed.

A Power of Attorney is a frequently used document in circumstances of illness, disability, lack of capacity, or in transactions where the Principal cannot be present to sign necessary legal documents.

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Agent’s Obligations. The Agent has a fiduciary obligation to act according to the Principal’s instructions, and where no instructions have been given, to act in the Principal’s best interest. Often, gifting and self gifting authority is granted to the Agent(s) in order to allow the Agent(s) to engage in estate planning and/or long term care planning for the Principal. If the Agent(s) act improperly, the Agent(s) can be sued by the Principal.

What Happens Without a POA? Without a Power of Attorney in place, no one has the needed legal authority to act if someone loses legal capacity or is unable to act on their own behalf.

If that happens, an adult guardianship proceeding is often needed. A guardianship proceeding can be extremely expensive, time consuming as well as emotionally difficult for families. Guardianship is generally granted where it can be shown that a person cannot meet their own personal care needs and/or property management needs. Once appointed by the Court, a guardian’s activity is subject to Court oversight, annual accounting, and more.

To learn more about Advance Medical Directives or discuss your planning, please schedule an appointment with Keren or Jaime using their booking links below.

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