Power of attorney is a signed document that gives a person the legal authority to act on behalf of another person. The person granting the authority to act on their behalf is referred to as the “principal”, and the person being given the authority is referred to as the “agent” (or sometimes the “attorney-in-fact”).
The agent does not have to be a lawyer, and is oftentimes a close friend or family member. Executing a power of attorney means that the principal is willing to trust that the agent will make decisions based on what is in the principal’s best interest, so the agent must be chosen very carefully.
A power of attorney is especially important in the event of incapacitation. Someone is considered legally incapacitated when their decision-making skills are either temporarily or permanently impaired due to injury, illness, or a disability. An example would be if someone develops dementia as they age or is unconscious after having been in a car accident. If a valid power of attorney exists prior to the principal’s incapacitation, then the agent has full authority to make decisions on the principal’s behalf, to the extent they were granted in the power of attorney document.
Under What Circumstances and to What Extent May an Agent Act on the Principal’s Behalf?
The circumstances and extent to which an agent can act on the principal’s behalf is stated within the power of attorney document. There are three basic power of attorney privileges:
- General: A general power of attorney gives the agent the broadest authority over the principal’s interests. It usually grants the agent all of the same powers and rights as the principal has.
- Special: A special power of attorney specifies which decisions the agent may make on the principal’s behalf. For example, a principal may want to execute a power of attorney so that an agent can manage their real estate, but does not wish to grant privileges beyond that.
- Health Care: A health care power of attorney authorizes the agent to make medical decisions on behalf of the principal in the event that the principal is unconscious, or not mentally competent to make their own medical decisions.
Important to note is that in order for a power of attorney to remain valid after a principal’s incapacitation, it must be a durable power of attorney. To create a durable power of attorney, specific language confirming that to be the principal’s intent must be included in the document.
If the document does not contain language saying the power of attorney is durable, then the power of attorney is considered non-durable and it becomes invalid as soon as the principal becomes incapacitated. For this reason, anyone suffering from an illness that they know will later affect their mental functioning (e.g. Alzheimer’s, early dementia) will want a durable power of attorney to act on their behalf.
How Do I Create a Power of Attorney?
First and most importantly you will need to carefully evaluate who you want to serve as your agent. This should be someone who is very trustworthy and is knowledgeable about the situations you are granting them power of attorney for. Once you’ve selected your agent, you will need to have the document drafted. Most states offer basic forms and documents to help you create a power of attorney. The document must generally be signed, witnessed and notarized by an adult.
If you are at all unsure of the meaning or consequences of signing the document, consult with an attorney to clarify everything first. The attorney will ensure that the document you sign is legally binding and that it conveys all of the powers you want it to, but nothing more. As with any document, the person that is signing and granting power of attorney must have the mental capacity to do so and must know what they are signing, or the document will not be valid.
What if I Become Incapacitated Without a Durable Power of Attorney in Place?
If you become incapacited and do not have a durable power of attorney document executed, then any interested party can petition the court for guardianship. A guardianship can give someone control over the incapacitated person, over the incapacitated person’s property, or both. After being appointed as guardian by the courts, that person will have the legal authority to make decisions within the scope authorized by the court.
Can the Power of Attorney Be Revoked?
A power of attorney can be revoked, so long as the principal remains competent. The principal may not revoke a durable power of attorney after incapacitation. Likewise, an already incompetent person cannot grant a durable power of attorney.
Do I Need a Lawyer for Help with a Power of Attorney?
You should definitely consider contacting a local estate planning attorney to assist in the drafting of your power of attorney. An experienced attorney at law will be able to ensure that the document is enforceable and your rights are protected.