Life tends to always be unpredictable, and many times we find ourselves in situations that we have not prepared for. Attorneys are approached by clients with these situations on more than a few occasions. Generally, these are emergency situations when a person is trying to assist a family member with his or her personal affairs. For those who have taken on the huge responsibility of caring for their elderly parents, a spouse, or even the affairs of any family members in the military, should consider the benefits of a power of attorney. Obtaining a power of attorney before emergencies take place usually assist in alleviating some of the challenges of caring for a loved one and his or her personal affairs.
A power of attorney is a written document that allows one person to act as an agent for another person. The person that is appointing the agent to act on their behalf is the principal. The agent is the person given the authority to act on behalf of the principal and is also called the “attorney-in-fact.” However, the agent or attorney-in-fact is not required to be a licensed attorney. Under a power of attorney, the agent is allowed to handle business on behalf of the principal. Some of the powers given to an attorney-in-fact include: real property transactions, personal property transactions, banking transactions, business operating transactions, insurance transactions, estate transactions, benefits from military services, tax matters, personal affairs, and health care decisions. This means an agent or attorney-in- fact has the authority to sign papers, checks, title documents, contracts, or manage bank accounts.
There are different types of power of attorneys available to fit different circumstances including: a general power of attorney, a special power of attorney, a durable power of attorney, and a health care power of attorney. A general power of attorney gives the agent complete authority to handle all personal and business decisions. A special power of attorney limits the agent’s authority to handle only specific activities that are outlined in the written document. This means a special power of attorney could be used for the limited purpose of handling a specific business transaction or certain personal matters. A power of attorney can also be limited to a time frame, such as while a military person is deployed.
Generally, a power of attorney terminates when the principal dies or no longer has the mental ability to grant the power. However, a durable power of attorney allows the agent to remain the attorney-in-fact with all powers granted even after the principal dies or is no longer mentally capable to make decisions. In order for the durable power of attorney to take effect, the written document must clearly state that the power of attorney will not be affected if the principal becomes mentally incompetent. It may also state that the power of attorney becomes effective once the principal becomes mentally incompetent. Either way, the wording must be clear in order for the durable power of attorney to become or remain effective.
As always all matters concerning legal documents should be discussed with a licensed attorney in detail in order to ensure they are completed correctly under the required state regulations. Stay Informed. Stay Prepared.
Bellonora McCallum is an attorney at the McCallum Law Firm, PLLC, in Rockingham and Laurinburg. Reach her at 910-730-4064 or visit www.mccallumlawfirm.com.