Powers of attorney are written authorization to act on or represent another person’s financial and legal affairs in the event of their incapacity. The named agent is able to carry out the wishes of the principal, or incapacitated person. Powers of attorney are important in both trust and will based estate plans.
There are multiple types of powers of attorney and documents can be designed to become effective only upon the principal’s incapacity, or go into effect immediately.
General: A general power of attorney authorizes another person, or agent, to act on behalf of the principal in the event of their incapacity or inability to manage affairs.
Durable: By adding certain language to powers of attorney, the document can be extended to take or remain in effect, should the principal become mentally incompetent. Although in the state of Virginia, all powers of attorney are considered durable and therefore valid if the principal becomes incapacitated.
Special or Limited: A special or limited power of attorney only allows the agent to make decisions under certain, pre-specified circumstances and often only during a certain time frame.
Powers of attorney vary from state to state, and some are more likely to hold up and be accepted than others, depending on the situation. For example, in some states a written, signed and notarized power is all that is required, in others, witnesses are required. With all of these options and variables that is why each estate plan is different and personal.
Contact Promise Law with any questions and concerns you may have about setting up powers of attorney within your estate plan. We can help you understand the different requirements and individual needs of your life, and advise you on which is best for you.