A power of attorney is a commonly used estate planning tool that can fulfill several important purposes when drafted properly and used correctly. Unfortunately, people frequently agree to execute a power of attorney, or POA, without fully understanding the authority conferred in the document. While the concept behind a POA is rather simple, the various types of powers of attorney that are available and the subtle nuances of the language used in a POA can result in misunderstandings and unintended consequences. For example, do you know when a power of attorney becomes effective? The answer may surprise you. Before you consider signing a POA it is always best to check with your Missouri estate planning attorney first to make sure you understand what you are signing.
At its most basic, a power of attorney is a legal arrangement that allows you to appoint someone to act on your behalf in legal matters. In a POA the person granting the authority is known as the “Principal” while the person to whom authority is granted is known as the “Agent”. Typically, when you execute a POA it is because you intended to grant your Agent authority right then, as soon as the document is executed; however, there are reasons why you might want to delay the effective date of the authority. One simple example is when you wish to give someone authority to act in a specific transaction or during a specific period of time. For instance, you might want to give a caregiver the authority to consent to medical care for your minor child during a week in which you will be out of the country. In that case, you would create a limited POA and include a specific time frame for the authority granted. Your Agent’s authority would not take effect until the time frame indicated in the POA document.
Another common scenario in which your Agent’s authority is delayed in when you create a “springing” POA. In a “springing” POA the authority granted only takes effect if a specific event occurs, such as the incapacity of the Principal. In fact, incapacity planning is the most common reason why a springing POA is created.
If you have additional questions or concerns about creating or executing a power of attorney, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.
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