What Is A Power of Attorney?
A Power of Attorney names the agents you wish to act on your behalf for financial matters in the event you are incapacitated. This document can give power to your agents immediately (we call this a Durable Power of Attorney) or upon the onset of an incapacity (this is called a Springing Power of Attorney). The Power of Attorney allocates certain powers to your agents. This document must be notarized, and the original should be presented to financial institutions when your appointed agent requests access to your accounts or information.
How do you know if you need a durable or springing Power of Attorney?
For clients with chronic medical conditions, older clients, or clients in unique situations, we advise that your Power of Attorney be durable. This means that once the document is signed, dated, and notarized, your agents have immediate power to act on your behalf. For younger clients, a springing Power of Attorney may be preferable. However, if you have a springing Power of Attorney, your agent will need to obtain a doctor’s note regarding your incapacity before the Power of Attorney powers can be exercised.
Does the Power of Attorney ever expire?
A Power of Attorney does not have an inherent expiration date. However, if you have changed your preferences for your agents or even the order of preferences for agents, you will need to create a new Power of Attorney document. Handwritten changes to this document are not valid.
It is important to know that many financial institutions will not honor a Power of Attorney document that was executed more than ten years ago. If you created a Power of Attorney more than ten years ago, we advise you to create a new one as soon as possible.
Can the agent under my Power of Attorney change my will?
Your agent, acting under a valid Power of Attorney, cannot change your will. However, your agent can amend or create a trust on your behalf if this power is expressly granted in the Power of Attorney document. Agents have extensive powers to be able to manage your assets and finances, so make sure you select trustworthy individuals.
Does my agent need to be local?
With the proliferation of services available via online platforms, mobile banking, chat services and phone banking, your agent does not necessarily need to be local. Many banks have branches in multiple states and most financial advisory firms are national. If the bulk of your finances are handled through local banks and credit unions without many branches, then you should elect agents who live nearby so that they can visit the branch as necessary.