Like a will and a healthcare directive, a Power Of Attorney is an incredibly important and useful piece of many estate plans. In this article, we provide you with a basic discussion of what exactly a Power Of Attorney is, and how it is that you can use a standard Power Of Attorney. The statutes on Power Of Attorneys are over 30 pages in length. So instead, we have set out and provided you with a short summary of some of the most important parts of the laws and requirements in using a Power Of Attorney. By no means is this article intended to cover every last law and requirement, or every possible situation or question that could arise with regard to a Power Of Attorney and its use. Instead, if you should have further questions, we encourage you to contact us at the Gabriel Law Office, PLLC or consult with other legal counsel of your choice. Let us help make sure legal issues are not an issue for you and your loved ones.
What Is A Power Of Attorney
To start, just what is a Power Of Attorney? A Power Of Attorney is a written document in which one person, known as the “principal,” effectively makes another person their agent, or “attorney-in-fact.” The person who creates the Power Of Attorney and nominates someone as their agent with authority to act on their behalf is known as the principal. The person who is given the power to act on behalf of the principal is known as the attorney-in-fact. Thus, once a Power Of Attorney is executed by the principal, the attorney-in-fact has the immediate authority to act upon the principal’s behalf on any number of things, from banking activities, to real estate transactions, to entering into contracts for the purchase and sale of assets.
A Power Of Attorney is often used as an estate planning tool. Many people find that granting a trusted individual the authority to act on their behalf can come in handy from time to time. For example, we advocate that any estate plan include a Power Of Attorney to be used in the event that you become disabled, incompetent, or too sick to act on your own behalf. With a Power Of Attorney in place, you can ensure that someone has the ability to act on your behalf even when you cannot. Moreover, many people do not realize that by the time you need to have a Power Of Attorney in place, it is often too late to create one. For example, if you suffer a sudden catastrophic accident, such as a car accident or a heart attack, and you are left in a temporary state of unconsciousness, whether you are in a comma or under heavy sedation, you will not be able to create a Power Of Attorney at that time despite the fact that you will need someone to be able to pay your bills, do your banking, deal with pending transactions and business, etc. Once you are incompetent or unconscious, it is likely too late to protect yourself and nominate an attorney-in-fact. Thus, where the healthcare directive is used to specify your medical care when you cannot and provide someone the authority to make those decisions for you, the Power Of Attorney is used to ensure that someone can carry on your ordinary and necessary economic decisions when you cannot.
When Can I Use A Power Of Attorney
Generally speaking, a Power Of Attorney can be used as soon as it has been signed by the principal, however, there are ways in which a Power Of Attorney can be made limited in duration. A Power Of Attorney can be customized and drafted, for example, so that it only becomes effective upon the disability of the principal. This is known as a Springing Power Of Attorney, a document which “springs” into effect upon the occurrence of some event, such as the disability of the principal. Unfortunately, however, a Springing Power Of Attorney is seldom used due to the fact that it is extremely difficult to prove that the event which was required to happen, in our example the disability of the principal, has actually happened. Imagine walking into a financial institution or real estate transaction with a Springing Power Of Attorney for your parent, which only springs into existence when your parent becomes disabled, and then trying to convince the financial institution or title company that they can now rely upon the Power Of Attorney because your parent has suffered a medical emergency and is now disabled. You are far more likely to find yourself scrambling for sufficient documentation to prove that your parent is in fact disabled. Thus, it is not always a good idea to limit the duration in which a Power Of Attorney can be used.
What Are My Duties
What are your duties with respect to a Power Of Attorney? What is your responsibility when you have been named as someone else’s attorney-in-fact? Basically, a person who has been named as an attorney-in-fact must act with the utmost good faith and with undivided loyalty to the principal, the person that gave him or her the power to act on their behalf. Furthermore, as attorney-in-fact, you have the duty to act on your principal’s behalf with the highest principles of morality, fidelity, loyalty, and fair dealing. In other words, if you are someone else’s attorney-in-fact, you should always make sure that whenever you are doing something on that person’s behalf, what you are doing is reasonably in your principal’s best interest and not anybody else’s. Be sure that you do your best to make decisions on your principal’s behalf in good faith, and always do your best to reach the best deals on your principal’s behalf. In summary, as an attorney-in-fact, you must always ensure that your actions are morally acceptable, and that you are loyal to your principal, deal fairly on your principal’s behalf, and that you just generally be trustworthy in your actions and reliable to your principal.
Do I Have To Make A Formal Accounting And File It With The Court
As an attorney-in-fact, do you have to make a formal accounting to your principal of all of those actions you have taken on behalf of your principal, and do you have to file it with a court? The answer is no. Normally, an attorney-in-fact is not required to make any sort of accounting of their activities to his or her principal. However, if your principal has specifically requested that you provide them with an accounting of your activities, you are required to provide them with such an accounting. Also, if the Power Of Attorney states that you as the attorney-in-fact must provide the principal with an accounting of your activities, then you must of course provide such an accounting. You may also have to provide an accounting of your activities as attorney-in-fact if you are ordered to do so by a court. Even though you may not be required to provide anyone with a formal accounting of your activities taken as attorney-in-fact, it is extremely important that you keep accurate and detailed records of your activities, and we discuss those records further below.
Must I Maintain Records
As attorney-in-fact, am I required to keep and maintain records of my activities undertaken on behalf of my principal? The best advice that we can give you… Yes! You absolutely should keep and maintain records. Since you MAY, at some point, be required to render a full and complete accounting of your activities as attorney-in-fact, it is very important that you keep full and complete records of everything that you do as the attorney-in-fact. This means that you should constantly keep and maintain an accurate check ledger, bank statements, and cancelled checks. If you ever, as attorney-in-fact, sell real estate on behalf of your principal, you should always keep and maintain complete records of the real estate transaction, including the purchase agreement, deed, and closing statement and documents, at a minimum. If you sell or transfer the stock or bonds of your principal, you should always keep and maintain complete records of the transactions. Always remember that someone may ask you to render an accounting at a later date, and if your accounting is not accurate or complete, you may find yourself in a lot of trouble, civilly and possibly even criminally. Protect your principal and protect yourself, keep good records.
How Is A Power Of Attorney Revoked Or Terminated
Can a Power Of Attorney be revoked or terminated? If so, how can a Power Of Attorney be revoked or terminated? Yes, a Power Of Attorney can absolutely be revoked or terminated. In fact, doing so is relatively easy. A Power Of Attorney may be revoked or terminated by a written document signed by the principal who granted the Power Of Attorney. Or, if the principal is under the care of a guardian or conservator, then in a document signed by the principal’s guardian or conservator. If, on the other hand, the attorney-in-fact is the spouse of the principal, then the Power Of Attorney will also be terminated immediately and automatically upon the commencement of a marriage dissolution action. Also, and this is very important, a Power Of Attorney automatically terminates upon the death of the principal who executed the Power Of Attorney. That literally means that at the moment that the principal dies, your rights as his or her attorney-in-fact automatically and immediately terminate. So NEVER undertake any activities as an attorney-in-fact after your principal has died, your right and ability to do so have already been terminated and no longer exist.
What Happens If The Principal Who Gave Me The Power Of Attorney Becomes Seriously Ill Or Is Otherwise Disabled
So what happens in the event that the principal who made you their attorney-in-fact in the Power Of Attorney becomes seriously ill or is otherwise disabled? Do your powers as attorney-in-fact continue? Yes. In most cases, the principal will designate within the Power Of Attorney document itself that the Power Of Attorney shall continue to be effective even if the principal becomes incapacitated or incompetent. This is not the case for every Power Of Attorney, however. The principal does have the choice and ability to restrict the powers granted to the attorney-in-fact, and can elect to have the Power Of Attorney terminate in the event of serious illness or other disability. For this reason it is important to know what you are granting as principal within your Power Of Attorney, and also to know what your powers are as attorney-in-fact and in what situations those powers are terminated.
Can There Be More Than One Attorney-In-Fact
Is a principal able to designate more than one person to act as attorney-in-fact? Yes they can. The principal can name more than one person as their attorney-in-fact. The principal can also choose whether or not each attorney-in-fact can act alone, or whether all of the designated attorneys-in-fact need to act together in carrying out their activities. In fact, a principal can even designate who should be a successor for an attorney-in-fact in the event that the original person designated to act as attorney-in-fact is no longer able to do so, or simply chooses not to do so. If the principal has designated more than one attorney-in-fact, or successor attorneys-in-fact, who those individuals are, whether or not they have to all must sign off on each of the activities undertaken, and when each attorney-in-fact actually becomes an attorney-in-fact, will all be set forth in the Power Of Attorney document itself.
What Power Do I Have Under The Power Of Attorney
What powers do you have as the attorney-in-fact? Generally, the Power Of Attorney gives you a whole host of very broad powers as attorney-in-fact. Nonetheless, you must actually look at the Power Of Attorney itself to determine exactly what powers are granted to the attorney-in-fact.
The standard statutory short form Power Of Attorney used by our office, for example, lists 14 different areas in which a principal may grant his or her attorney-in-fact powers. These areas include the power to act in real estate transactions, banking transactions, business transactions, insurance transactions, stocks and bonds transactions, matters involving litigation, and other matters as well. In connection with these areas, the attorney-in-fact may contract with others, hire assistants, execute and deliver instruments, handle claims, reimburse himself or herself, and do other related acts.
As the attorney-in-fact, you may make gifts to various organizations or to individuals. However, you are limited to making a gift of $14,000.00 per year to yourself or to any person that you have a legal obligation to support, such as your children or spouse. Thus, in a calendar year you could give yourself $14,000.00, your spouse $14,000.00, and each of your minor children $14,000.00. However, any gifts must be made only after considering what is in the BEST INTEREST of the principal, as it is your requirement as attorney-in-fact to always act within the best interest of the principal.
Finally, with respect to your powers as attorney-in-fact, it is extremely important that you not overstep that authority actually granted to you by the principal. There are certain activities and situations that can arise where your activities as attorney-in-fact can be deemed wrongfully undertaken or exploitative. For example, there are criminal penalties for the financial exploitation of a “vulnerable adult.” Minnesota law defines a “vulnerable adult” as any person 18 years of age or older who is a resident or patient of a facility such as a nursing home; or who receives licensed home care; or who possesses a physical or mental infirmity that impairs his or her ability to provide the basic necessities of life. While your duties as attorney-in-fact may allow you to act on behalf of a principal that is deemed to be a vulnerable adult, it is important to ensure that you are not performing acts that are not in the best interest of the principal, like giving yourself monies from your principal for no particular reason. Should you, as attorney-in-fact, be representing a principal who is a vulnerable adult, or otherwise has a diminished capacity, such as an ailing and elderly parent, it is even more important that you keep detailed records of all of your activities undertaken in connection with the Power Of Attorney.
How Do I Use A Power Of Attorney
How can you actually use a Power Of Attorney when you are the attorney-in-fact? In most cases, you will have to show the original Power Of Attorney to whomever it is that you are attempting to use the Power Of Attorney with, such as a bank, title company, or mortgage lender. So be extra careful not to lose, destroy, or misplace your original copy of the Power Of Attorney, as a copy may not be good enough. Ordinarily, after you have provided the individual or entity with the original Power Of Attorney, a photocopy will be made for their records. Once they have made a copy of the Power Of Attorney for their records, the original Power Of Attorney will be returned to you, as you will need it to deal with other individuals and entities. Things can differ, however, depending upon the type of transaction you are dealing with. In real estate transactions, as one example, the original of the Power Of Attorney will be recorded at the county recorders office, and then, after it is recorded with the county recorder, the original Power Of Attorney will be returned to you. Additionally, as attorney-in-fact, you must sign the Power Of Attorney document on the last page before you can use it. Your signature DOES NOT have to be notarized.
While carrying out activities as the attorney-in-fact, you MUST indicate that you are acting for the principal as his or her attorney-in-fact and not merely for yourself. This is very important, otherwise you may open yourself up to more liability for your actions. For example, if you sign a nursing home application without indicating that you are acting as an attorney-in-fact for your principal, you may be held personally liable for the nursing home bills of your principal. It is VERY IMPORTANT that any time you sign as an attorney-in-fact, you use the following format:
” (Your Name) , as attorney-in-fact for (Name of Principal) “.
Who Should You Make Your Attorney-In-Fact
As you can see, a Power Of Attorney, while extremely useful, can provide a lot of authority over your finances, real estate, business dealings, etc. For this reason, it is important to choose wisely when selecting an attorney-in-fact. A good rule to follow when selecting an attorney-in-fact is to pick someone, or more than one person, whom you trust unconditionally. You want to ensure that you choose someone that will always have your best interest at heart when making decisions on your behalf. Even though an attorney-in-fact is required by law to act in good faith, and always to only undertake activities on behalf of their principal that are in the best interest of their principal, people do not always do what they are supposed to do. So, when you choose someone to be your attorney-in-fact, do so carefully, and do so wisely. Make sure that your desired attorney-in-fact will act intelligently and always maintain your best interests over all others.