May 31st, 2022 in Estate Planning and Power of Attorney
Usually, your foundation or estate planning lawyer will prepare you for your Role of Power of Attorney. A power of attorney is a legal document that grants you, as the agent, the ability to act on behalf of another. It gives you the power to manage specific matters ranging from health care to the management of another’s individual property and finances. The other person, or principle, uses this document to allow you to act, and make decisions when the principal cannot. The reasons for granting a power of attorney are varied, but usually involve the fact that the principal cannot make these decisions due to mental or physical incapacitation or unavailability.
In most cases, a power of attorney allows you to fully function as the legal agent for another person. For example, a power of attorney could allow you to sell a friend’s car, ship their household goods, or authorize a relative, or friend, to take their child to the hospital. Many times, it is used so that you can act on another’s behalf to sell or buy property.
It should be noted, however, that even if you have a power of attorney that allows you to act on another’s behalf, it usually does not prevent them from making decisions and managing their affairs. A POA does not make you a partner with the other person, but only functions as a fiduciary who must put their interests ahead of your own.
Also, there are limitations to a POA, such as:
- You, as the agent for the POA, cannot transfer the responsibility to another person at any time.
- You, as the agent for the POA, cannot make any legal or financial decisions after the death of the principal. At that time, commonly the Executor of the Estate would take over.
So, the scope and acts allowed in most POA’s are usually legally spelled out quite specifically. Therefore, the correct, and detailed drafting of the POA is significant and should always be done by an experienced Raleigh estate planning lawyer familiar with these legal documents.
What Are Examples Of the Usual Duties Involved In a POA?
There can be one, or at times, several powers of attorney that can authorize an agent to manage numerous tasks, including dealing with real and individual property, overseeing financial and tax affairs, and arranging for the principal’s housing and health care.
It’s highly significant to note, however, that the agent’s foremost duty is to abide by the terms as drawn up in the relevant document. You, as the agent, may only act to the extent that the written agreement allows you to. If the principle dictates specific directions (and they usually do) regarding the actions that you should take, you must follow those directions to the letter of the POA. It is highly recommended by the lawyer that drafts the POA, for the principal to discuss and then confirm in writing any expectations they have for you, as the agent. Remember, that the agent must always act in the principal’s best interest, rather than their own.
You also must avoid, at all costs, any conflicts of interest in this matter. You, for example, cannot commingle or combine your property with the principal’s property, unless this is specifically agreed to in the POA itself. For example, if both are married, then property the couple jointly owned would be permissible. You should also always keep detailed records of all transactions you enter on behalf of the principal.
Once again, being that a POA can be all-encompassing or strictly limited in scope, it is prudent to use a professional estate planning lawyer to make sure the POA is drafted exactly as the principal wishes it to be.
What Are the Different Types of Powers of Attorney?
There are two types of powers of attorney, these include a general POA and a special power of attorney. If you draft a general power of attorney, it will allow the person you name as your agent to do all things that you could legally do, from selling a car to deciding on your health care. A special, or limited, power of attorney lists in detail the legal acts that you, as the agent, are authorized to do and limits you specifically to that act. You can, of course, be authorized to do more than one legal action in a single special power of attorney.
Also, with either type of power of attorney they usually are never drafted to have an indefinite end date. It’s always best to set a date for the power of attorney to expire and dictate that date distinctly into the power of attorney.
Are There Any Things in N. Carolina That a Power of Attorney Cannot Do?
In Raleigh and all of N. Carolina, a power of attorney is commonly accepted as being valid for most purposes. There are, however, some items that cannot be accomplished by using a POA as these actions are considered too personal and therefore cannot be delegated to another. For example, a marriage ceremony or the execution of a will cannot be done by using a POA.
At other specific times, a certain form of power of attorney is required and none other will be accepted in the legal matter. An example would be that a special form of power of attorney is used by the Internal Revenue Service to allow a friend or relative to cash an IRS refund check. There are more though, and your Raleigh foundation and estate planning lawyer will know how to advise you professionally and correctly.
I Have Been Named As the Agent in a POA But Have Questions, How Should I Proceed?
It must be noted that a power of attorney can be particularly useful if you have one in effect when it’s needed, and you may be honored to be named its agent. Please note though, that a power of attorney can be abused as well, either intentionally or by your not fully comprehending its scope and intent. The estate planning lawyers at NC Planning, understand all the aspects and uses of a POA. If you need a POA drafted or are an agent for a POA, consult with them first and make sure you understand the POA’s legalities and perform your duties legally and correctly.
