Advice for General Power of Attorney Document Templates
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A power of attorney is a legal document which allows someone to take over the affairs of another person in the event of their incapacity. Powers of attorney lack any authority not specifically granted and they do not allow for anyone to make health decisions.
Here’s what you’ll find here:
- Understanding Terms used in a Power of Attorney
- Limitations for Use of Power of Attorney
- Specific Authority to Act
- What are Triggering Events?
- Power of Attorney Expiration and Revocation
- Helpful Resources
Understanding Terms Used in a Power of Attorney
There are some very specific terms which are used in a power of attorney which you should be familiar with. These include:
- Maker — this is the person who is granting powers to another person. This will be the person who decides who is making decisions on their behalf. The maker may also be referred to as the “principal”.
- Attorney in fact — this is the person to whom authority is being granted. This person is supposed to make decisions which benefit the maker. May also be referred to as “agent” or “affiant”.
- Durable — when referring to a power of attorney, a durable power means that in the event the maker becomes mentally incapacitated, the power of attorney shall continue in full force and effect.
- Fiduciary — when someone has a fiduciary obligation, they are legally bound to make decisions which are in the best interest of another person even if that decision is not in their own best interest.
- Successor — a person who can replace the original attorney in fact in the event they resign or are otherwise incapable of carrying out the duties granted by the power of attorney.
These terms are important to explain to the person who is granting someone else the authority to act on their behalf.
Limitations for Use of Power of Attorney
In general, the agent who is selected has the complete authority to handle all financial matters on behalf of the maker. However, these powers may only be exercised in accordance with the terms of the power of attorney. When using a general power of attorney template, the maker should be specific in what they are allowing as well as what is not allowed.
The maker of the power of attorney has the right to grant nearly any authority including:
- Real estate (property) transactions
- Banking transactions
- Authority to set up trusts on the maker’s behalf
- Authority to buy, sell, exchange stocks, bonds, commodities or other securities on behalf of the maker
- Right to manage businesses on behalf of maker including decisions regarding sales, exchanges, as well as hiring or terminating employees.
- Handling insurance policies including annuities
- Handle lawsuits on behalf of the maker and/or maker’s family
- Handle all financial needs of maker’s family
- Hire, or replace legal, financial, or other representatives
- File for or claim any government benefits on behalf of the maker
- Handle any transactions for maker which may be necessary for their retirement accounts
- File, amend, or otherwise deal with tax matters
The agent may not change beneficiary designations, make changes to estate plans, or amend wills on behalf of the maker. They also do not have any rights which outlive the maker. Any authority may be held back from the agent by simply removing the language contained in a general power of attorney template.
Specific Authority to Act
The person being granted any authority under a power of attorney often are granted those powers only after a triggering event, or in some cases, they may become effective immediately upon the proper legal execution of the power of attorney.
Authority to act on behalf of the maker expires upon the death of the maker of the power of attorney at which time the executor of the maker’s estate would take over all authority granted them by the person’s will.
What are Triggering Events?
Triggering events are those events which occur which could render a person unable to act on their own behalf. For example, the maker may be in a car accident and during their recovery they are unable to attend to their own financial matters.
If the power of attorney template used includes terms which make it durable, a triggering event may also include mental incapacity. In nearly all cases, a physician would be required to declare the maker incapable of dealing with their own matters.
Power of Attorney Expiration and Revocation
Some people put temporary powers of attorney into effect because they are going to be traveling overseas or have a high risk medical procedure done. In these instances, they may put an expiration date on the authority being granted. Additionally, a power of attorney may be revoked or modified at any time by the maker.
Helpful Additional Resources:
- ESTATE PLANNING FAQS - Power of Attorney
- How to Sign as Power of Attorney
- Power of Attorney FAQ - United States
- Power of Attorney Act - 2006
Obtaining Signatures on a Power of Attorney
A power of attorney cannot be signed electronically. These documents must be signed in the presence of two (2) witnesses and a notary public must acknowledge all signatures. The parties who should be included in the signing include:
- The maker of the power of attorney
- Two witnesses (one cannot be the agent being assigned)
- The person being granted authority (agent)
- A notary public
The agent should accept the appointment and should retain a copy of the power of attorney.
While electronic signatures cannot be used for a power of attorney, there are several other legal agreements and contracts which can use this unique method of legalizing contracts and agreements. When you need signatures for more than one party, and you are not able to meet face to face, start your free trial of Nitro today.