A power of attorney, or POA, is a legal document that allows you, known as the principal, to appoint a trusted individual, known as your agent or attorney-in-fact, to act on your behalf under specific circumstances.
Types of POAs
Limited or special power of attorney: restricts the agent’s authority to a certain time period or specific act, like the closing of a real estate transaction.
General power of attorney: is effective upon signing and terminates when the principal revokes the POA, dies, or becomes incapacitated. It allows your agent to do anything you can do for yourself, including, but not limited to:
- Manage your financial matters
- Manage your business
- Buy or sell things as necessary
- Cash or deposit checks
- Collect or pay debts
- Apply for public benefits (Medicaid, Social Security, Medicare, etc.)
- Sue on your behalf
Springing power of attorney: goes into effect only under certain circumstances, for instance, if you become incapacitated or unavailable because you’ve been deployed.
Health care power of attorney: also known as an advance medical directive, gives your agent the authority to make health care decisions for you when you no longer can make them for yourself.
Durable power of attorney: is like a general power of attorney, it is effective upon signing, but remains effective even if you become incapacitated.
Uniform Power of Attorney Act
The Commonwealth of Virginia is one of 25 states that have enacted the Uniform Power of Attorney Act, which states that a POA is now considered durable unless it explicitly states otherwise. It remains in effect if you become temporarily or even permanently incapacitated and can no longer make decisions or act for yourself. A durable power of attorney may eliminate the need to have a court appoint a guardian or conservator for you. In other words, a durable POA allows you to choose a trusted agent now to act on your behalf if it becomes necessary in the future. All power of attorneys ends upon the death of the principal.
What are the agent’s responsibilities?
Because there is no formal oversight of an agent, it is important to choose someone you can trust to act on your behalf and manage your affairs, as you would wish, when you cannot. An agent should:
- Act only within the scope of authority granted by the POA
- Always act in your best interests and for the principal’s benefit.
- Attempt to preserve the principal’s estate plan.
- Keep records and documents detailing all transactions and expenditures made on the principal’s behalf.
- Cooperate with the person who has authority over health care decisions to carry out the principal’s wishes.
What can’t a power of attorney do?
Though a durable power of attorney may give broad power over financial or medical decisions to the agent, there are still several things that an agent can’t do on your behalf. An agent cannot:
- Change the principal’s will, trust, or other estate planning documents.
- Make any decisions after the principal’s death.
- Act outside the principal’s fiduciary interest.
- Act for the agent’s benefit.
- Transfer the POA to someone else.
- Vote for the principal
When does a POA go into effect?
The power of attorney goes into effect immediately at signing, or at a future date that is specified in the document. In the Commonwealth of Virginia, the original document must be signed and should be notarized. A POA remains valid until:
- The principal dies.
- The agent resigns, dies, or becomes incapacitated.
- You revoke the agent’s authority.
- The purpose of the POA is satisfied.
- The power of attorney terminates according to its terms.
Giving someone a power of attorney does not prevent you from making decisions or conducting business yourself. As long as you are competent, you will not lose the right to manage your own affairs if you sign a POA.
The first step to generating power of attorney documents, is to speak with a knowledgeable Virginia estate planning attorney. An experienced attorney will ask the right questions, discuss your needs and concerns, and create the documents that will meet your needs and wishes.
Northern Virginia Trusts & Estates
Northern Virginia Trusts & Estates provides affordable estate planning services for Virginia families. Our firm understands the intricacies of estate planning and offers a range of services from simple, a la carte pricing for single items, to comprehensive offerings that cover a variety of preparations.
For more information about power of attorneys, our estate planning services, and packages, contact our office today at 703.938.3510 or visit our website: www.NorthernVirginiaTrustsAndEstates.com.