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The “Power” of the Power of Attorney Document

posted on January 12, 2015 by Willingham & Cote

by Lee B. Reimann, Estate & Gifts, Divorce & Family Law

A large part of my professional life is spent creating documents for people thatdirect what happens to their money and possessions after their death.  However, I feel that one of the most important documents that I create with clients is a General Durable Power of Attorney.  A General Durable Power of Attorney is a document where you share your legal rights.  You can choose to share these legal rights with one other person or several other people. Everyone over the age of 18 should have this document because you will never know when you may need this document.  This article is designed to answer a few common questions regarding this critical document.

When does it apply?

Because you’re sharing your legal rights, a General Durable Power of Attorney only is effective during your lifetime because at your death you have no legal rights, so you have no legal rights to share.  I emphasize this point because not infrequently, I will meet with a client who will say, “well my mother passed away and I went to the bank with my Power of Attorney to do some banking and they wouldn’t let me do any transactions.” The reason for this is that the Power of Attorney ended upon the client’s mother’s death (please note that this is different from a joint bank account – we will talk about joint accounts in my next article). 

What does it do?

A Power of Attorney allows you do a lot of things for someone who has appointed you to this position.  For instance, if my spouse appoints me as Power of Attorney, I can do banking on his behalf; I can go talk to Social Security on his behalf; I can talk to his credit card companies on his behalf; I can go to the Secretary of State and deal with his car registration; I can sell real estate that he may own.  There are a lot of legal situations that may arise and you may not realize that you need this Power of Attorney until the situation arises. The wonderful thing about a Power of Attorney is that you do not need to anticipate every situation as you have a solution already in place. 

What happens if I don’t have one?

The biggest problem with not having a Power of Attorney is that if you haven’t named a Power of Attorney, and you need someone to take care of legal situations for you or to manage your money or to talk to Social Security, your family may need to apply to probate court so that the court can appoint someone to represent you through a conservatorship proceeding.  At a time that might be stressful, do you want your family to have to go to court when by signing a simple Power of Attorney you can avoid all of that time, money and energy.

Who should I choose?

The one caution with a Power of Attorney is that this is a large grant of power to someone else.  A Power of Attorney is required to only do what is in your best interest, and if possible, they should consult with you before taking action.  However, I always caution my clients that they need to seriously consider to whom they choose to give this power.  And, you should always have a conversation with the person as to how you foresee the document being used.  If a Power of Attorney does do something that is not in your best interest, you could sue them in court, but this is not a route that most people want to take.

A Power of Attorney is a document that everyone should have as part of their “tool kit”.  

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