A Guide to Understanding the Power of Attorney

A Power of Attorney (POA) is an essential legal document that designates one person (the agent) to handle legal, financial, and sometimes health-related matters on behalf of another (the principal). This document does not give someone the power to make medical decisions or personal health decisions for you.

Selecting a trustworthy agent is critical, as they will have considerable control over your legal and financial affairs.  A principal may designate two or more persons to act as coagents.  Unless the power of attorney otherwise provides, coagents shall exercise their authority independently of each other and do not have to be in agreement. In selecting an agent, consider factors such as their reliability, willingness to serve, and prudent decision-making capabilities.

The value of having a POA cannot be overstated—it ensures that your affairs are managed during your absence or incapacity, safeguarding your interests and those of your loved ones. The agent is empowered to make decisions and act on your behalf, ensuring continuity in managing your affairs even when you cannot.

The Importance of a Power of Attorney

  • Ensuring Decision-Making Authority: A POA guarantees that decision-making can continue without interruption, crucial for protecting the principal’s assets and healthcare preferences.
  • Facilitating Transactions: It enables the smooth handling of the principal’s financial, legal, and business affairs, avoiding delays and complications.
  • Providing Peace of Mind: The assurance that a trusted agent is managing their affairs provides comfort to both the principal and their family.

Types of Powers of Attorney

When considering a POA, understanding the different types available is vital, as each is tailored to meet specific needs and circumstances:

  • General Power of Attorney: This type grants the agent extensive authority in various matters, including financial decisions and business dealings.
  • Limited or Special Power of Attorney: This is targeted at specific tasks such as selling property, managing real estate, or completing stock transactions.
  • Durable Power of Attorney: This type specifies that the POA’s authority persists even if the principal becomes incapacitated, which is essential for ongoing planning.  A General Power of Attorney can also be a Durable Power of Attorney.

Importance of Updating and Reviewing a Power of Attorney

  • Changing Circumstances: Events like marriage, divorce, incapacity or the death of an agent may necessitate updates to your POA.
  • Periodic Review: Regular reviews ensure the POA remains effective and aligns with the principal’s current wishes.
  • Modifying or Revoking a POA: Any changes must adhere to legal formalities similar to the original creation. Revocation should be communicated to all relevant parties.

Common Misconceptions and Concerns

  • Fear of Loss of Control: Many fear that creating a POA means relinquishing control. In reality, it is a delegation of authority under controlled circumstances. Even with this document, you may still legally make decisions about your own financial affairs as long as you choose to or are able to. 
  • Cultural and Religious Considerations: It’s crucial to consider and discuss openly how cultural perceptions might influence decisions about delegating decision-making power.
  • The Importance of Open Communication and Trust: Effective POA arrangements depend on transparent communication and trust between the principal and the agent. Talk to your Agent often about what you want and what he or she is doing for you using the document. If your Agent is not following your instructions or doing what you want, you may cancel or revoke the document and end your Agent’s power to act for you.

When the Agent’s Authority Terminates

An agent’s authority shall terminate when:

  • The agent resigns, becomes incapacitated, or dies;
  • The principal revokes the agent’s authority, provided that the principal provides the agent with written notice of such revocation by certified mail and provided that such notice is filed with the clerk of superior court in the county of domicile (where he/she lives) of the principal;
  • An action is filed for the dissolution or annulment of the agent’s marriage to the principal or their legal separation, unless the power of attorney otherwise provides; or
  • The power of attorney terminates by a specified date or condition expressly stated in the power of attorney in the Special Instructions.

A Power of Attorney is a fundamental legal document and important part of any estate plan that ensures your affairs are managed according to your wishes, even when you are unable to do so. If you do not have a POA, you should consider establishing one while keeping in mind personal circumstances that might influence its creation and execution. 

For professional guidance to help effectively navigate these considerations, contact our law office at (706) 632-0444 or contact us here.