Regular Powers Of Attorney
Regular powers of attorney end in cases of incompetency or incapacitation. This type of power of attorney makes sense for many commercial and financial situations
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Chat NowThe statements on this website are not legal advice and are provided solely for informational purposes! These statements provide only a very general outline of the law. If you have any kind of legal concern, please contact an attorney.
If you or a loved one are considering signing a Power of Attorney statement, this will provide a nice overview.
The Powers of Attorney in this article only refer to financial and legal decisions and do not cover Healthcare Powers of Attorney, found here.
There are two—general—types of Powers of Attorney, in which multiple or general powers can be granted to another person, called the Attorney-in-Fact.
Durable Powers Of Attorney
- Durable powers of attorney are effective even in cases of incapacitation. Generally, the document must state whether it remains or becomes effective after incapacitation. If the power of attorney document is written so that it becomes effective after incapacitation, it will become effective immediately after it is signed and the named attorney-in-fact swears in an affidavit that the principal is incapacitated. Therefore, it is a good idea to define incapacitation very clearly in the document. In cases of incapacitation, most states consider the document to be valid only when it is registered in the office of the register of deeds in one of the following places:
- The county named in the document
- The county of your loved one’s legal residence
- A county where your loved one owns real property
- The county where the attorney-in-fact lives
- The durable power of attorney makes the most sense in many caregiving situations, especially if a loved one’s age, illness, or disability could lead to incompetency or incapacitation.
Rights And Responsibilities
- Both types of power of attorney documents allow the attorney-in-fact (you) to act on behalf of the principal (your loved one) to:
- Buy and/or sell property
- Buy, manage, or sell real estate
- Disclaim interests to avoid estate taxes
- Employ professional assistance
- Enter into contracts
- Enter safety deposit boxes
- Exercise stock rights
- File tax returns
- Handle banking transactions
- Handle matters related to government benefits
- Handle transactions involving securities
- Maintain and operate business interests
- Make gifts
- Make transfers to revocable trusts
- Purchase life insurance
- Settle claims
- Because the power of attorney document can be used to grant a large amount of the principal’s decision-making power to the attorney-in fact, individuals should be careful when creating and interpreting the conditions set forth in these documents. If necessary, the principal should include any desired restrictive clauses in the power of attorney document.
- In contrast, it is important to recognize the value of being able to assign these decision capabilities to a trusted family member or friend, especially in the case of durable powers of attorney that continue to be legally binding in cases of incapacity. These documents can save caregiving family members and friends a great deal of time and frustration. For this reason, every individual should at least look into establishing a power of attorney.
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