A power of attorney, or POA, is a legal document that allows you, as the principal, to appoint a trusted individual, known as your agent or attorney-in-fact, to act on your behalf under specific circumstances. A POA goes into effect immediately at signing, or at a future date that is detailed in the document. You can also specify that it goes into effect only under certain circumstances, for instance, if you become incapacitated or are deployed overseas.
The Commonwealth of Virginia is one of 25 states that have enacted the Uniform Power of Attorney Act, which states that all POAs are now considered durable unless it explicitly states otherwise. That means that it remains in effect if you become temporarily or even permanently incapacitated and can no longer make decisions or act for yourself. All powers of attorney automatically end with the death of the principal.
Let’s look at a few frequently asked questions:
Is a power of attorney revocable? Yes. You can revoke a POA at any time, as long as you are legally competent.
What kind of decisions can my agent make? Your agent can make any or all the financial decisions that you could make for yourself, with the exception of making changes to your will, divorcing, or voting. This includes, but is not limited to:
Managing your financial matters
Managing your business
Using your assets to pay for your everyday expenses and those of your family
Conducting banking transactions
Collecting or paying debts
Applying for public benefits (Medicaid, Social Security, Medicare, etc.)
Suing on your behalf
Can your agent do whatever they want with your estate? No. Legally, an agent shouldn’t do something that is not in the principal’s best interests. He/she must always try to preserve your estate and act in your fiduciary interest and not for the agent’s benefit. An agent may have the power to act, but that doesn’t necessarily give him/her the right to act if it isn’t in your interest. It is important that you choose an agent with integrity and that you know is trustworthy.
Does anyone monitor the actions of my agent? There is no official monitoring of agents. That is the responsibility of the principal. It is important that your agent keep accurate records of all transactions completed for you, and provide you, your family, or a third party with periodic accountings.
Can you sign a power of attorney after you’ve been certified incompetent by a doctor? No. You can’t execute a POA or any legal document if you are deemed incompetent. Once someone lacks “legal capacity,” the only recourse is a conservatorship or guardianship proceeding in court, which is both time-consuming and potentially expensive. If you know that you or a loved one may become unable to handle their financial affairs in the future, it is important to put a POA in place now, while still legally competent and before it is too late.
If I have a power of attorney, do I still need a will? Yes. A durable power of attorney is only in effect while you are alive. Your last will and testament details how you want your estate to be managed and distributed after you die.
Do I need a POA if I already have a revocable living trust? It’s highly unlikely that all your property has been transferred to the living trust, and the successor trustee has no authority over property that the trust does not own. A living trust isn’t a substitute for a power of attorney. Without a POA, a court may have to step in and appoint someone for that purpose, which will cause delays during a difficult time and additional expenses.
Can you find a do-it-yourself POA on the Internet? Yes, you can, but it isn’t advisable to use one. An Internet POA may not cover your specific needs and/or the legal requirements of the Commonwealth of Virginia. If problems are discovered after it is in effect, it may be too late to do anything about it.
When does my power of attorney expire? In Virginia, a valid POA remains in effect until the principal dies or revokes the document.
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 powers of attorney, our estate planning services, and packages, contact our office today at 703.520.5024 or visit our website.