Power of Attorney
1. Why should I have a power of attorney?
A power of attorney allows you to designate another person to handle your affairs for you if you are unavailable or disabled. This document should be included in every person’s estate plan to allow uninterrupted access to any financial accounts in the event you are travelling for an extended period of time, or worse, if you are physically or mentally disabled. Without a power of attorney, your financial accounts can only be accessed through a court proceeding appointing a guardian for your financial affairs which can be a long and sometimes complicated process.
2. How does a power of attorney work?
In effect, a person you designate as your power of attorney becomes “you” for purposes of handling your affairs. In the event of your absence or disability, your designated power of attorney would present a copy of this document to your bank or brokerage to allow access to that account. Your designated power of attorney then has the authority to write checks and do whatever is necessary to manage your affairs. The power of attorney’s authority is complete but is limited by the overriding principle of law that states that a power of attorney must act exclusively in the best interests of the person he is representing.
3. Who should I select to be my agent?
Since the person you appoint as your power of attorney has effectively unlimited access to your financial accounts, you should only designate a person whom you trust completely. In most situations, this would be your spouse and if your spouse is unavailable, one or more of your siblings or older children.
4. How does my agent sign as my power of attorney?
Your agent would sign as follows: “John Doe, by Mary Doe, Power of Attorney.”
5. In what types of situations can my power of attorney act on my behalf?
See above – generally if you are disabled or unavailable.
6. Do state laws vary?
State laws do very somewhat in terms of the formalities required to execute a power of attorney. Some states require a notary, some states require a notary and witnesses and some states only require witnesses. Regardless of the formalities, all states recognize powers of attorney.
7. What if I move?
If you move, you do not have to execute a new power of attorney. All states recognize the validity of documents signed in another state if you were a resident of that state when they were signed. That having been said, I usually advise clients to have new documents prepared after a move just to avoid any delays that may occur if a bank or other institution in another state wants to initially have the “foreign” document reviewed prior to recognizing it.
8. Will my Power of Attorney expire?
Powers of attorney automatically expire at death. Otherwise, powers of attorney are valid until revoked by the person initially granting the power of attorney. It is also possible to specify that a power of attorney is only valid for a limited period of time but this is rarely done.
This article is for general informational purposes only, is not for the purpose of providing legal advice, and does not establish an attorney-client relationship. You should consult with an attorney to obtain advice as to your particular issue or circumstances. 530045.1