What is a durable financial power of attorney?
A durable financial power of attorney is a legal document giving authority to a designated person to act as your agent to make legal and financial decisions on your behalf. Powers of attorney can be “general” or “durable.” A general power of attorney ends upon your death or when you become incapacitated, unless it rescinded by you before that time. A durable power of attorney remains in effect even when you become incapacitated, but ends upon your death. The power of attorney can be effective immediately upon signing, or “springing,” meaning it only takes effect upon a person’s incapacity. The powers can also be limited in scope to only certain matters or can be very broad, depending on how the document is written. It is helpful to have the advice or help of a lawyer in preparing your power of attorney to make informed decisions about the powers you are giving and how you may want to limit the power in any way.
Who should be given financial power of attorney?
This is a powerful document granting broad authority. It is essential that you choose someone you trust to act on your behalf with competence, diligence, and honesty. If you have someone in your life that you love, but who hasn’t made the best personal or financial decisions for themselves, they may not be the right person to make the personal and financial decThis is a powerful document granting broad authority. It is essential that you choose someone you trust to act on your behalf with competence, diligence, and honesty. If you have someone in your life that you love, but who hasn’t made the best personal or financial decisions for themselves, they may not be the right person to make the personal and financial decisions on your behalf either.
What if you don’t have someone you trust as a power of attorney?
Although many people find comfort in selecting a spouse, family member, or close friend to serve in this role, others do not feel comfortable naming someone they know. In that case, it is possible to employ a professional fiduciary to serve in that role, at a cost. A professional fiduciary will be licensed, insured, and will have to abide by a code of ethical standards. It is important to consider whether you prefer to name someone who knows you well and knows your values and wishes versus selecting someone with professional competence and greater professional accountability.
When would you choose to give springing versus immediate powers?
Whether to give powers effective immediately or make them “springing” to take effect when you become incapacitated depends on a number of factors that you should discuss with your lawyer. Some of the biggest considerations include who you have named, whether you have any current known health issues that may affect your capacity, how urgent the need may be for someone to quickly step in to assist in your financial affairs, and so forth. When you choose to make a power of attorney “springing” authority, it is generally necessary to have a doctor provide a sworn statement as to your incapacity, which can take additional time but can also provide some additional protections against premature use of the powers.
How do you give someone power of attorney?
In Arizona, durable financial powers of attorney are generally granted by preparing a written document outlining the powers. The person granting the powers signs the document before a notary and one witness. It is generally not sufficient to simply handwrite a note and sign it if you want the power to be recognized by third parties like banks or other financial institutions your agent will be dealing with on your behalf. A document with sufficient specific language to show your intention to grant these powers, signed before a notary and witnessed by one disinterested person, is required under Arizona law. To create a durable power of attorney, certain words must be used to show that you intend to convey that authority and that you intend for that authority to continue even in the event of incapacity.
How do you change the power of attorney?
Just as you must have mental capacity to be able to create your power of attorney, you also must have capacity to change or revoke your power of attorney. As long as you have capacity, you can change or revoke the agent or the specific powers at any time. You may wish to change the power of attorney to name a new agent or alternate agent, or to expand or narrow the powers you wish to give to that agent. Arizona doesn’t prescribe a specific method for changing the power of attorney. The safest way to do this effectively is to revoke your previous power of attorney and create a new one that reflects the changes you wish to include.
Can you limit the scope of the powers to certain things but not others?
You can make the powers in a durable financial power of attorney as expansive or narrow as you prefer. It is helpful to discuss your wishes and concerns with an attorney to make sure they are reflected correctly in the document before you sign.
Can more than one person have power of attorney?
Yes, more than one agent can serve at a time. However, with powers of attorney, less is more. Parents with two or more children often want to name multiple adult children to serve as co-agents on their behalf in order to avoid conflict, hurt feelings, or to seem more fair. Unfortunately, this can make acting on your behalf much more complicated or difficult. Co-agents generally have to agree in order to take action on a specific matter. If co-agents are likely to see an issue differently or you foresee they won’t be able to get along or cooperate, it can make it much more difficult for your agents to handle your financial affairs. In addition, it may require that they be at the same place to sign documents on your behalf, which can create logistical challenges or cause undue delay. If there is a concern about fairness or feelings, it is helpful to have conversations with the adult children to involve them in the process and perhaps select one as the primary agent and another as an alternate agent.
What happens if my agent dies?
Life is unpredictable. It is always advisable to nominate both a primary agent and at least one alternate agent to act on your behalf. Then if your primary agent dies unexpectedly, the alternate you named can step in to help manage your financial affairs.
Can someone with power of attorney change the will of the person who granted the power?
A will or changes to a will must be made and signed by the testator (or at the direction of the testator in her conscious presence) and cannot generally be signed by the power of attorney on the testator’s behalf. However, a power of attorney can be granted powers that would impact how a will is ultimately administered and how property is held or disposed of after your death. Therefore it is essential you name a trusted person to serve as your agent.
Does naming a power of attorney prevent me from managing my own financial affairs?
As long as you have capacity, you still have power to act on your behalf. Naming a durable financial power of attorney does not remove your power to act, it just adds another person(s) who is also legally authorized to act on your behalf. If you have capacity and don’t like the powers you’ve granted or disagree with the person you’ve appointed to act in this role, you can change or revoke the powers or replace the agent with a different agent.