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Power-of-Attorney: General or Durable?


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Power-of-Attorney: General or Durable?

  1. 1. What is a “Power of Attorney?” <ul><li>A legal document that enables an individual to designate another person, called the attorney in fact, to act on his/her behalf as long as the individual does not become disabled or incapacitated. </li></ul><ul><li>It gives another person (the agent) the power to act in your place and on your behalf in managing your assets and affairs. </li></ul><ul><ul><li>A principal may name two or more agents who can be authorized to act either &quot;jointly&quot; or &quot;severally&quot; (alone without the signature of the other agents) </li></ul></ul>
  2. 2. Three Kinds of Power-of-Attorney <ul><li>Power-of-Attorney (General) </li></ul><ul><li>Durable Power-of-Attorney for Financial Affairs </li></ul><ul><li>Durable Power-of-Attorney for Healthcare Directives </li></ul>
  3. 3. Power of Attorney (POA) <ul><li>Written </li></ul><ul><li>Signed in front of a notary public </li></ul><ul><li>NOT “durable” unless expressly stated to be valid during any incompetency of the grantor </li></ul>
  4. 4. Duration: How Long Does A POA Last? <ul><li>General POA: Until the death or incompetency of the grantor, or until revoked by the grantor </li></ul><ul><li>Durable POA: Until the death of the grantor, or until revoked by the grantor </li></ul>
  5. 5. What is a “general” power of attorney? <ul><li>The agent's powers may be broad and sweeping so as to include almost any act which the principal might have performed. </li></ul>
  6. 6. What is a “limited power of attorney?” <ul><li>A &quot;limited&quot; power-of-attorney is where the agent has one or more specific powers, such as the power to sell a particular property to a particular purchaser at a particular time. </li></ul>
  7. 7. What is a “Durable” Power of Attorney? <ul><li>The durable power-of-attorney provides that those powers granted to the agent shall not be affected by the subsequent disability or incapacity of the principal or by the lapse of time. </li></ul><ul><li>The agent can act immediately upon the principal's incapacity to manage his assets or to take various emergency measures without initiating costly and time-consuming court guardianship proceedings to attain court authorization for such transactions. </li></ul>
  8. 8. What is a “durable power of attorney for financial affairs?” <ul><li>A legal document that gives someone authority to manage your financial affairs if you become incapacitated. </li></ul>
  9. 9. What is a “ springing ” power of attorney? <ul><li>Signed when the principal has capacity and not effective until the occurrence of a triggering event such as the onset of disability of the principal. </li></ul><ul><li>The primary disadvantage of the use of the springing durable power is that because its operation is triggered by disability, the occurrence of the event may have to be conclusively established to the third person in order to induce such person to accept the authority of the agent. </li></ul><ul><li>The document should contain a clear definition of the term &quot;disability.&quot; </li></ul>
  10. 10. Specific powers which should be considered in the power-of-attorney <ul><li>The power of access to safe-deposit boxes </li></ul><ul><li>The ability to sign tax returns, IRS powers-of-attorney and the power to settle tax disputes </li></ul><ul><li>The power to settle, pursue or appeal litigation on behalf of the principal </li></ul><ul><li>The power to set up and fund trusts and the power to amend existing trusts </li></ul><ul><li>The power to make gifts </li></ul><ul><li>The power to change the principal's domicile to another state where the Medicaid eligibility rules are more favorable </li></ul>
  11. 11. What is a “ Durable Power-of-Attorney for Healthcare Directives ?” <ul><li>A legal document that you can use to give someone permission to make medical decisions for you if you are unable to make those decisions yourself. </li></ul>
  12. 12. Optional yet important considerations <ul><li>A power-of-attorney should contain the notarized signature of the agent selected by the principal, since after all, it is the authenticity of that signature upon which the person to whom the power-of-attorney is presented will be relying upon. </li></ul><ul><li>Usually not recorded </li></ul><ul><ul><li>In Missouri, if the agent is given the power to convey real estate, the power-of-attorney itself must be recorded . </li></ul></ul><ul><li>Multiple signed copies </li></ul><ul><ul><li>Copy may be provided to stock broker, legal & financial counselors </li></ul></ul><ul><ul><li>Obviously, the person with the POA will have one or more signed copies for showing whenever he is acting for the “grantor” </li></ul></ul>