Why You Need a General Power of Attorney
What is a Power of Attorney?
A power of attorney (“POA”) is a legal document that authorizes another person, called an agent or attorney-in-fact, to act on your behalf. It is essentially giving someone the temporary or permanent legal authority to handle your affairs according to your wishes.
Designation of Authority: You, the principal, designate who your agent will be and what power(s) you grant them.
Scope of Power: The POA can be broad, giving your agent authority to handle a wide range of matters like finances and / or real estate. It can also be limited to specific tasks, such as selling your car.
Activation: A POA can be durable, meaning it stays valid even if you become incapacitated. There are also springing POAs that only become active upon a specific event, like your incapacity.
Your Right to Revoke: You have the right to revoke your POA at any time so long as you have mental capacity.
Why Should I Have a Power of Attorney?
Planning for Incapacity: A durable POA ensures someone you trust can manage your affairs if you are unable due to illness, injury, or age. Without a POA, if you are unable to make your own decisions, a court may need to appoint a guardian, which can be a lengthy and expensive process.
Convenience: Even if you are healthy, a POA can be helpful for short-term situations. For example, if you're traveling abroad and cannot handle some financial matters back home, your agent can step in and take care of things.
Peace of Mind: Having a POA in place can give you peace of mind knowing that your finances and affairs will be handled according to your wishes if you are unable to do so yourself. It can also ease the burden on your loved ones during a difficult time.
Young Adults: If you have children 18-22 (college aged), they should strongly consider having a POA so whomever they appoint can step in seamlessly if something happens while in school or traveling.
How Do I Know My Wishes Will be Honored?
Your agent has a legal obligation (fiduciary duty) to act in your best interests and for your benefit. They can be held liable for breaching this duty. An agent could face liability in a lawsuit if they do not act in your best interests based on the authority you granted them.
To avoid any issue, be sure to choose an agent you trust. By taking the following steps, you can create a more secure and transparent situation where your agent is well-equipped to follow your wishes and you have some safeguards in place:
Clear Communication: Openly discuss your financial goals, values, and preferences with your chosen agent. The more they understand your wishes, the better they can act on your behalf.
Lawyer Drafted POA: Consider having a lawyer draft a comprehensive power of attorney document that clearly outlines the powers you grant your agent and any limitations or specific instructions you have.
Succession Plan: If your primary agent becomes unavailable, designate a successor agent in your POA to avoid delays or complications.
Regular Review: Review and update your POA periodically, especially if your life circumstances or wishes change.
What If My Power of Attorney Was Executed in Another State?
So long as your power of attorney was legally executed according to the state it was executed in, other states should recognize it as an enforceable document.
However, if you have moved and plan to remain in a new state for an extended time, it is a good idea to update your document to ensure it is compliant with your local laws. This could help streamline matters when your agent needs to use the power of attorney and avoid confusion in general.
Consult with an Attorney:
While this provides a general overview of standard General Powers of Attorney and their uses, everyone’s situation is unique. Consulting an estate planning attorney in your state is highly recommended to ensure you have the appropriate documents in place and that your wishes are clearly outlined and followed. If you live in Oklahoma, you can contact us here to schedule a consultation.
***The information provided in this article is not legal advice and should not be construed as such. It is for educational purposes only and you should talk with a lawyer before taking any actions based on the information in this article.
