Powers of Attorney
A durable power of attorney is an integral part of any good estate plan. Valid in all states, a power of attorney gives one or more persons (called your “agent” or “attorney-in-fact”) the power to act on your behalf (as the “principal”) during your lifetime. The power may be limited to a particular activity (e.g., closing the sale of your home) or general in its application, empowering your agent to act on your behalf in a variety of situations. Depending on your needs and wishes, the power of attorney may become effective immediately upon your executing it or it may not become effective until you are disabled or incapacitated (called a “springing power” of attorney). It may give temporary or continuous authority to act on your behalf. A power of attorney may be revoked.
With a valid power of attorney, your agent can take any action permitted in the document. However, your agent has a fiduciary duty to act in your best interests.
Why would anyone give another person such broad authority over one’s property and finances? The two most common reasons are convenience and planning for the unexpected. As an example of convenience, if you are buying or selling property and do not wish to appear in person to close the transaction, you may take advantage of a power of attorney to have your agent sign on your behalf. In planning for the unexpected, a power of attorney is often implemented to take effect when you may not be able to act on your own behalf because of temporary or permanent disability or incapacity.
If you do not have a power of attorney and become unable to manage your personal or business affairs, it may become necessary for a court to appoint one or more people to act for you. People appointed in this manner are referred to as guardians or conservators. If a court proceeding is needed, you may not be able to choose the person who will act for you. With a power of attorney, you choose who will act, you define their authority, and you define the limits on that authority.
Because a power of attorney gives someone else the power to manage your property and finances, it must be well thought out and well-drafted. Contact Collins Law Corporation today to create your power of attorney and the rest of your estate plan.