What is a Power of Attorney?
Do you have a Power of Attorney? This document allows another to represent you and act on your behalf to deal with typical financial matters. These matters include a broad range of activities including but not limited to banking transactions, managing stocks, bonds and other similar transactions, real estate transactions and gift giving authority.
Why is it Important to Have a Power of Attorney in Place?
It is important to have a Power of Attorney in place as a part of your estate planning because it will allow someone to continue to care for your financial needs after you are unable to act for yourself. This is beneficial as it prevents the time consuming, costly and often embarrassing need for court intervention of having a guardian appointed in order to act on your behalf in financial situations.
What is an Attorney in Fact?
In Washington State the person who is appointed by you to represent you and act on your behalf is known as your “Attorney in Fact”. That is why you will see the person you named to act on your behalf be referred to as an Attorney in Fact.
Can My Power of Attorney Make Health or Medical Decisions on My Behalf?
Your Power of Attorney will need to be reviewed to determine this. In many of the Power of Attorney documents I have reviewed do not provide for medical decisions or only appear to provide for them as an afterthought. Even if your document does have medical powers, it may not make sense to name your financial Attorney in Fact to make health care or medical decisions on your behalf. Because of these considerations, I recommend that you also sign Healthcare Power of Attorney to appoint someone to make health care decisions on your behalf.
What does the Word “Durable” in a Durable Power of Attorney stand for?
A Durable Power of Attorney means that the Power of Attorney will continue after you (the principle) becomes incapacitated and that you can no longer act for yourself. Note however, if a Power of Attorney form is not designated as a “Durable Power of Attorney” it may revoke automatically in the event of your incapacity which could require a guardianship proceeding in the future.
When does my Durable Power of Attorney become effective?
Your Durable Power of Attorney will need to be reviewed to determine this. Often I recommend using a Durable Power of Attorney that becomes effective immediately upon its execution (i.e. signing). The other alternative is for the Durable Power of Attorney to spring into effectiveness upon your incapacity. The use of an immediate power eliminates the need to prove you are incapacitated, and generally makes the Durable Power of Attorney more efficient. You should note that if it is effective immediately it could be used at any time after you signed it.Generally you should put the Power of Attorney into a safe location and inform your Attorney in Fact of where it is so that they can get it when it is needed. However the Attorney in Fact will normally need to have a copy of the Durable Power of Attorney in order to take any actions on your behalf with the bank or other similar financial institutions.
What are the duties of my Attorney in Fact?
The Attorney in Fact which you have appointed in your Power of Attorney is a Fiduciary and owes a fiduciary duty to you. This means that as a Fiduciary he or she has a responsibility to act in your best interest. He or she must act reasonably and prudently in their actions and they must handle your affairs separately without commingling your funds with their own.
How long is my Power of Attorney effective?
Your Power of Attorney is effective as long as you continue to live unless you revoke it. Upon your death the Power of Attorney will automatically be revoked and upon your death your Attorney in fact will no longer have authority. Your Power of Attorney is not intended to be a will substitute which is why it ceases to be effective after death. After your death the Personal Representative named in your will or the Trustee if you have a Trust generally will handle any financial matters needed.
Years Ago I Signed a Power of Attorney, Is It Still Effective?
Unless you have revoked your older Power of Attorney Form it is probably still effective. Executing a new Power of Attorney does not automatically revoke an older Power of Attorney, unless revocation language is included in the new Power of Attorney. If you do have any older Power of Attorney form, I recommend that you revoke any prior forms so that you do not have problems in the future from conflicting forms or appointed Attorneys in Fact.
Can I revoke a Power of Attorney and if so, How?
You may revoke your Power of Attorney at any time during your lifetime as long as you are competent. In order to do this you need to follow the process listed in the Power of Attorney. Typically, you must provide written notice to the Attorney in Fact and to any others that may be relying on the Power of Attorney. For example, if your Power of Attorney has been dealing with your bank and has provided the bank with a copy of the Power of Attorney Form, in addition to notifying your Attorney in Fact, you must also notify the bank, that the Attorney in fact named no longer has authority to act on your behalf. Generally attorneys can create form letters which they use that can help you properly revoke your Power of Attorney. It is important of you to keep a list of who you give a Power of Attorney as well as who you suspect has Powers of Attorney in case you desire to revoke it so you know who you need to notify. Also, if the Power of Attorney has been recorder, the revocation will need to be recorded.
What if I Have Additional Questions Regarding My Power of Attorney?
The general discussion above is not intended to address specific questions, you should address your specific questions to the attorney who drafted the Power of Attorney. If you did not use an attorney, please feel free to contact my office to schedule a time to review your documents.