People often include at least one power of attorney among their estate planning documents. When drafted and used properly, a power of attorney, or POA, can be an extremely useful estate planning tool. Unfortunately, people often execute a POA without a thorough understanding of what the document means and/or the power granted to the Agent as a result of executing the document. For example, can your Agent under a power of attorney make a gift on your behalf? This is one of many questions people have regarding the power granted in a POA. Knowing the answer is important if you decide to grant someone general powers of attorney.
A power of attorney is a legal agreement in which the Principal (person granting power) grants to an Agent (person receiving the power) the legal authority to act on the Principal’s behalf. The extent of the authority granted in a POA depends on what type of POA is created. A “Limited” POA only gives your Agent specific power to act under certain circumstances. For example, if you have ever left your children with a caregiver while you were out of town you may have granted the caregiver limited POA to authorize medical treatment for your children should it become necessary while you are gone. A general POA, on the other hand, grants your Agent broad power to act on your behalf in almost all circumstances. Missouri law, however, does limit the power granted in even a general power of attorney. Finally, making a POA “durable” simple means that the powers granted will survive your incapacity.
In Missouri, certain powers can never be granted in a POA. Others, by law, must be specifically enumerated in the POA document to be granted, even if the document is a general power of attorney. One of those powers is the power to “make or revoke a gift of the principal’s property in trust or otherwise.” Therefore, if you wish to give your Agent the power to make gifts on your behalf in your POA, that power must be specifically listed in the power of attorney documents.
If you have additional questions about what your Agent can and cannot do when you execute a general power of attorney in Missouri consult with your estate planning attorney.