What Is “Power of Attorney?”

What Is “Power of Attorney?”

 

This article serves as an introduction to powers of attorney, including explanations of legal terms, different types of power of attorney documents, and other important information.

power_of_attorney

 

 

The principal determines the amount of power given to the  attorney-in-fact, and this individual can be given the authority to deal with only one particular issue (a specific power of attorney), or to  handle most of the principal’s personal and financial matters (a general power of attorney). Regardless of the type of power of attorney  granted, the attorney-in-fact is responsible for keeping accurate  records of all transactions that he or she makes on behalf of the  principal. The attorney-in-fact also is responsible for distinguishing  between the types of decisions he or she has the power to make and other decisions.

 

There are multiple types of decisions that the attorney-in-fact can be given the power to make, including the power to:

 

  • Make financial decisions
  • Make gifts of money
  • Make health care decisions, including the ability to consent to  giving, withholding, or stopping medical treatments, services, or  diagnostic procedures. (Note: your loved one can also make a separate “health care power of attorney” to give only this power to an  individual.)
  • Recommend a guardian

 

Normally the attorney-in-fact is paid, which means that the principal should decide on a set amount—or the method for determining a pay  scale. If the principal doesn’t provide for these payments in his or her power of attorney document, the court will determine how much the  attorney-in-fact will earn. The court, however, can never raise this  amount above a fixed percentage of the value of the principal’s  property.

 

The attorney-in-fact can be a spouse, adult child, relative, or  trusted friend of the principal, as long as he or she acts in good faith on behalf of the principal at all times. It should be noted that the  actions of an attorney-in-fact are legally considered those of the  principal, so the principal should always choose a trustworthy  individual. This is especially important because the power of attorney  is not regulated by the court system, making it easier for the  attorney-in-fact to misuse his or her power. In the document, the  principal should always include restrictive language, including clauses

 

  • Requiring the attorney-in-fact to keep accurate and adequate  records, which are to be provided on a regular basis to the principal or other named individuals
  • Prohibiting the attorney-in-fact to give gifts, or setting a limit on the amount of such gifts

 

Generally, not having a power of attorney document is better than  having one that gives power of attorney to someone that the principal  doesn’t trust. Regardless, the principal should always let another  trusted individual—other than the attorney-in-fact—know where the power  of attorney document (original and copies) is kept and who the  attorney-in-fact is. Because incapacitating accidents are not  predictable and can happen at any age, it is important to choose the  right attorney-in-fact, write a clear power of attorney document, and  understand the ways that the document can be challenged and terminated.

 

Protecting The Document
If the principal has selected an attorney-in-fact and believes that the  power of attorney document may be challenged, the principal can do the  following things to protect the document:

 

  • Make a videotape of the power of attorney statement and the  principal’s intent to sign the document. Keep this video with the  document. It should be noted that any behavioral or verbal quirks in  this tape can be used against the power of attorney document as evidence of the principal’s incompetence.
  • Obtain a doctor’s statement at the time the power of attorney is signed regarding the principal’s state of sound mind.
  • Sign the document with multiple witnesses present regardless of  state requirements. These individuals can later testify to the  principal’s knowledge and voluntary signing of the document.
  • Visit a lawyer to have the document reviewed so that the lawyer can testify to the principal’s mental competency if needed.

 

Voiding And Termination
The power of attorney document can be voided several ways. If the document has not been registered, it can be terminated by:

 

  • The principal’s death
  • A termination procedure designated in the original power of attorney document
  • Destroying the document if the principal is still competent
  • Revoking the durable power of attorney by a writing document  that is signed, notarized, and sent to the attorney-in-fact by certified or registered mail if the principal is still competent

 

If the document has been registered there are also multiple ways to terminate it, including:

 

  • Revoking the durable power of attorney by filing a written  revocation in the register of deeds office where the original document  was filed
  • The death of the principal
  • The unavailability of an attorney-in-fact
  • The principal’s divorce from the attorney-in-fact in several  states, including Alabama, California, Colorado, Illinois, Indiana,  Minnesota, Missouri, Pennsylvania, Texas, and Wisconsin

 

If the attorney-in-fact dies, and the principal has not named an  alternate, the power of attorney document is also terminated. Regardless of the way that the power of attorney is revoked, the attorney-in-fact  should always be notified of the termination of the document.

 

 

~ FamilyCare America, Inc.

 

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