What Does a Power of Attorney Do?
A power of attorney is a document that allows another individual to act on your behalf, as your legal agent. You are known as the “principal,” and the person you choose to act on your behalf is known as the “agent.” You choose (in advance) a person you trust to act on your behalf whether due to your incapacitation or for other reasons. A Raleigh, NC lawyer for powers of attorney can provide effective protection in many different scenarios. The experienced NC Planning attorneys can help you determine the best ways to use power of attorney documents. An agent given medical power of attorney by the principal could do the following:
- Decide on the medical care received by the principal
- Choose doctors and care providers on behalf of the principal
- Determine where the principal will reside when long-term care is necessary
- Choose what level of lifesaving measures will be taken
A financial power of attorney allows the agent to do the following:
- File taxes on behalf of the principal
- Manage any properties owned by the principal
- Collect debts on behalf of the principal
- Make investments for the principal
- Access the financial accounts of the principal to pay for the principal’s housing needs, health care, and other necessities
- Apply for Medicaid, Veteran’s benefits, or other public benefits on behalf of the principal
When an agent is given a generic power of attorney, broad powers may be given. There are, however, limitations associated with power of attorney documents. The agent cannot do the following:
- The agent may not break the fiduciary duty that requires they always act in the best interests of the principal
- A principal’s will may not be revoked or altered by the agent
- The agent is not allowed to make any decisions for the principal after the principal’s death—unless the agent is also the named executor of the principal’s estate
- An agent may not transfer the power of attorney to another person, although the agent can decline the duties outlined in the power of attorney.
- An agent may not cash an IRS refund check without a special power of attorney used by the agency
What Are the Risks of Not Having a Power of Attorney?
If you have no power of attorney, the court may step in to handle whatever issue has occurred as a result of your incapacitation. The judicial steps leading to the appointment of a guardian or conservator can take a significant amount of time. If you have not implemented a power of attorney, you will have no say in who the court will appoint to handle your affairs. The individual appointed by the court will have broad authority to act on your behalf—and may be a person you would not have chosen.
Further, a power of attorney may only be enforceable in the state in which it was authorized. If you have moved from out of state, your power of attorney should be reviewed – and if needed, updated – by one of our experienced attorneys.
On the other side, there is the potential for a power of attorney to be misused or abused. As an example, an older person might be persuaded to give power of attorney to a younger relative who could then squander the assets of the senior. A husband could have power of attorney for his wife. The couple could then separate, and the husband could use that power of attorney to drain the wife’s separate bank account.
What Are the Different Types of Power of Attorney Documents?
A limited power of attorney allows another person to act in your stead for a narrowly defined purpose. As an example, suppose you will be out of town on the day and time set to sign a deed to property. You could implement a power of attorney that allows your agent to perform only that task.
A general power of attorney is much broader, giving your agent the powers and rights that you have. The limited power of attorney ends when the specified task is complete. Other types of powers of attorney include:
- A durable power of attorney can be general or limited but stays in place after your incapacitation. If there is no durable power of attorney in place, the court will be required to appoint a guardian or conservator to make decisions for you.
- A springing power of attorney does not become effective unless and until your incapacitation. The springing power of attorney will clearly define the standards used for determining incapacity.
A North Carolina power of attorney must always be signed in front of a notary public and can be recorded at the county register of deeds office. If a power of attorney is used for land transfers, to do business on your behalf, or in the event of your incapacitation, it must be recorded.
What Are the Major Benefits of a Power of Attorney?
An effective power of attorney has the following benefits:
- The necessity of a conservatorship or guardianship is avoided
- You can change your power of attorney documents as you age to reflect changes in your needs
- There will be no questions regarding your intent
- Delays in asset protection are prevented
- Your agent is allowed to talk to banks, healthcare providers, or other professionals unhindered
- The agent can transfer assets to qualify the principal for public benefits like Medicaid or non-service-connected VA benefits
A power of attorney can be an important planning tool; A Raleigh, NC lawyer for powers of attorney from NC Planning can help you determine the best ways to use a power of attorney.
How NC Planning Will Help You Plan for the Road Ahead
At NC Planning, a Raleigh, NC lawyer for powers of attorney will answer all your questions regarding power of attorney documents. We can help you determine whether a power of attorney is right for you—and, if so, which type is best. Our experienced estate planning attorneys will ensure we fully understand your goals before making recommendations.
The NC Planning attorneys build long-term relationships with our clients, making our work with you more than a one-time transaction. As professionals who understand your estate planning goals, we are ready to help you implement those goals. Contact NC Planning today for the assistance you need, and the client care you deserve. We have NC Planning Law Offices in Raleigh, NC, and Cary, NC. We look forward to speaking to you the use of powers of attorney documents.