A power of attorney is one of the most commonly used legal documents because of the flexibility a POA offers and the variety of functions it can serve. The odds are good, therefore, that you will execute a POA at some point during your lifetime for one reason or another. A power of attorney is based on a fairly simple legal agreement whereby you, as the “Principal”, grant authority to another person, the “Agent”, to act on your behalf in legal matters. Although a POA is a rather simple document it can be a very powerful document. Consequently, the authority granted in a POA can also be abused, often with catastrophic financial consequences. When you do sit down to create and/or execute a POA, consider the following mistakes to avoid when drafting a power of attorney.
Granting too much authority – a POA can be general or specific. A general POA grants virtually unfettered authority to the Agent to act on your behalf, meaning the Agent has access to all your assets and can enter into or terminate contracts in your name. Never grant a general POA when a limited POA will suffice.
Not granting enough authority – if you draft a limited POA make sure the authority you grant in the POA is sufficient to accomplish the task meant for your Agent to accomplish.
Failing to make your POA durable – if you want the POA to work as an incapacity tool make sure you make the POA “durable” as a traditional PO terminates upon the incapacity of the Principal.
Failing to include time frames – if the power granted in the POA is only needed for a specific period of time, such as while you are on vacation, be sure to include an end date in the POA document.
Not appointing a successor Agent – your Agent could be unable to serve for a variety of reasons, including death, incapacity, or geographic move. To make sure your POA continues to function you must appoint a successor Agent.
If you have additional questions or concerns relating to a power of attorney you are drafting, please be sure to contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.