Powers of Attorney
A Power of Attorney is a document in which you give a loved one or a trusted friend the legal authority to take over the management of your finances and legal matters on your behalf, if you are incapacitated. If there is no individual whom you wish to appoint as your attorney-in-fact, you may appoint a professional attorney-in-fact, such as your accountant or attorney. The individual who is appointed to act on your behalf, is referred to as your “attorney-in-fact.” Your attorney-in-fact is granted the legal authority to act on your behalf, but only to the extent allowed by the provisions contained in the Power of Attorney.
A “General Durable Power of Attorney” is appropriate for most clients. It gives your attorney-in-fact the authority to manage all of your property (bank accounts, investments, retirement accounts, motor vehicles, real estate and a business owned by you), sell any of these assets, purchase assets on your behalf, file tax your tax returns, and to handle any legal matter that concerns you. It stays in effect if you become physically or mentally incapacitated, are not able to give instructions to your attorney-in-fact, and are not able to understand or comprehend what your attorney-in-fact is doing on your behalf. If you become physically or mentally incapacitated as a result of illness, an accident, or advanced age, and you have a General Durable Power of Attorney, your attorney-in-fact can manage your finances, pay your bills, and sign any necessary legal documents or tax returns without being appointed as your Guardian in a public Probate Court proceeding. Your physical or mental incapacity remains private, known only to family members and friends, and your attorney-in-fact can proceed, whenever necessary, to pay your bills, manage your investments, retirement accounts, real estate, and other assets, make decisions and elections regarding your pension benefits, prepare and sign tax returns, and take care of any other necessary financial or legal matter.
Specific Requirement for an Effective and Valid Power of Attorney
A Power of Attorney should be signed before a Notary Public and notarized. Some states require one or more witnesses to a Power of Attorney, so signing before a Notary Public and two witnesses is advisable. The powers that you give your attorney-in-fact take effect as soon as you sign the Power of Attorney and it is notarized and witnessed, unless you limit the circumstances under which your attorney-in-fact can act.
If it is necessary for your attorney-in-fact to take over the payment of your bills, he or she must go to your bank or investment company with the original Power of Attorney and personal identification such as a Driver’s License. You do not have to be present. The bank or investment officer will examine the Power of Attorney and the attorney-in-fact’s personal identification. If everything is in order, the officer will change the records to allow your attorney-in-fact to make withdrawals from all of your accounts, to sign checks drawn on your accounts, and to make decisions regarding the accounts and investments such as the renewal of a Certificate of Deposit, the sale or purchase of stock or investment in a mutual fund. The bank officer will make a copy of the Power of Attorney for his or her records. Your attorney-in-fact must keep possession of the original Power of Attorney in case it must be used at another bank, at a real estate closing or for another reason.
Other Types of Power of Attorney
A Power of Attorney that does not take effect until you are incapacitated, is known as a “Springing Power of Attorney.” If you choose this option, you should establish how your incapacity will be established. For example, an affidavit submitted by your primary care physician could be sufficient to prove your incapacity. This type of Power of Attorney can be difficult to use. Your physician may be reluctant to give a medical opinion that will give someone else control over your finances, or the bank may want more than one medical opinion to prove incapacity. As long as you have a trusted family member or friend who can act as attorney-in-fact, the better option is the General Durable Power of Attorney, which takes effect when you sign it.
In some cases, a “Limited Power of Attorney” in which you give your attorney-in-fact authority to perform a very specific task, is useful and appropriate. For example, you could give your attorney, your spouse or your child a Limited Power of Attorney to represent you at a real estate closing while you are on a business trip or on a vacation. He or she will be present at the closing to resolve any disputes, to sign the closing documents, and to collect the check for the sales proceeds.
Contact Us about Your Power of Attorney Questions: Sutton, Massachusetts
If you would like more information about powers of attorney or wish to schedule an appointment with Attorney Atkins, please contact us.
Other Types of Power of Attorney
A power of attorney that does not take effect until you are incapacitated, is known as a “springing power of attorney.” If you choose this option, you should establish how your incapacity will be established. For example, an affidavit submitted by your primary care physician could be sufficient to prove your incapacity. This type of power of attorney can be difficult to use. Your physician may be reluctant to give a medical opinion that will give someone else control over your finances, or the bank may want more than one medical opinion to prove incapacity. As long as you have a trusted family member or friend who can act as attorney-in-fact, the better option is the general durable power of attorney.
In some cases, a “limited power of attorney” in which you give your attorney-in-fact authority to perform a very specific task, is useful and appropriate. For example, you could give your attorney, your spouse or your child a limited power of attorney to represent you at a real estate closing while you are on a business trip. He or she will be present at the closing to resolve any disputes, to sign the closing documents, and to collect the check for the sales proceeds.
Contact Us About Creating Your Power of Attorney: Sutton, MA
If you would like more information about powers of attorney or wish to schedule an appointment, please contact our skilled lawyer.