When does it take effect? If you live in a state that permits “springing” powers of attorney, your attorney-in-fact (that is, the person who holds your power of attorney) is authorized to act only on the occurrence of the event stated in the power of attorney. Typically, the power is designed to “spring” when you become incapacitated. If a power of attorney isn’t a springing power, the attorney-in-fact can act at any time after you’ve executed the document.
Is it durable? A durable power of attorney is one that continues in force after you’ve become incapacitated. Some states’ laws presume that a power of attorney is durable, but others don’t, in which case a power may be unenforceable unless it expressly states that it’s durable.
Is it powerful enough? Careful planning is required to ensure that your attorney-in-fact has the authority he or she needs to carry out your wishes. There are certain powers that you should expressly include to ensure such authority. For example, you must specify whether your attorney-in-fact has the power to make gifts or to make estate planning decisions, such as transferring assets to a trust.
Is it too old? Your attorney-in-fact’s ability to act on your behalf depends on whether third parties are willing to honor the power of attorney. Sometimes banks and others are reluctant to rely on a power of attorney that’s several years old. Therefore, consider signing a new one every two or three years.
If you have questions regarding power of attorney, please contact us. We’d be pleased to help answer your questions.