Having a power of attorney included in your overall estate plan is often extremely helpful. A POA is a legal form that entrusts decision-making powers to someone for medical, financial, legal, and other purposes. You can have more than one power of attorney, each for a different aspect of your life. Almost anyone can create a power of attorney but care must be taken when deciding to sign one.
In terms of who can execute a power of attorney the only requirements are that the principal (person creating and executing the POA) is an adult and that he or she is of sound mind. Someone else may create a POA and ask you to sign the form. This occurs frequently with older individuals. Sometimes the request is legitimate; however, a POA is often used by unscrupulous individuals who prey on the elderly as a way to access financial accounts or outright steal assets. If someone asks you to sign a POA that you did not create yourself, always have your estate planning attorney review the form before you even consider signing it.
One other important point to remember is that if you want the power of attorney to survive your incapacitation you must specifically say so in the document. This type of power of attorney is called a durable power of attorney. A traditional POA terminates upon the incapacity of the principal – precisely when you may want your POA to work. With a durable power of attorney, your agent remains your agent even if you become incapacitated. For this reason the “durable” power of attorney was created. Whether or not you want your POA to be durable depends on the purpose of the POA. A limited POA used to give someone authority to sell your vehicle which you are out of town, for example, will likely not need to be made durable. A POA for healthcare, on the other hand, must be durable to be of any benefit to you.
You can appoint whoever you want as your agent, but be aware that in Missouri, an individual is not required to act as your agent just because you name them as your agent in a POA. The person you name must agree in writing at the time you create the document in order to be bound to act as your agent. Note that power of attorney documents need to be notarized as well in Missouri. Given the numerous issues that need to be addressed when crafting this type of document, you should consult with an estate planning attorney to ensure that your POA is accurate and fulfills all legal requirements.
- Common Mistakes in Estate Planning – Part III - June 7, 2023
- The Not-So Transparent Corporate Transparency Act - May 30, 2023
- How Tax and Non-Tax Considerations Impact Estate Planning – Part II - May 25, 2023