It is important to identify one or more individuals you trust to handle your financial and medical situations in the event you become unable to manage your affairs. To protect against that uncertainty, powers of attorney can give limited responsibilities to certain individuals to take specific actions on your behalf, including the power to make vital financial and healthcare decisions concerning you. A Charlottesville estate planning lawyer at MartinWren, P.C. can help you set up these essential documents, ensuring your wishes are respected and your affairs are managed properly.
In short, a power of attorney is the authority to act on behalf of another person on specific matters. It gives legal permission to one or more individuals you trust to make vital decisions on your behalf regarding your legal, financial, or medical issues. Whether you are going to be unavailable or are just preparing for the possibility that you may be incapacitated, creating a power of attorney makes sure the right person is able to make decisions for you. Power of attorney is granted to an “agent” or “attorney-in-fact” to give that individual the legal authority to make decisions on behalf of another, the “principal.”
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In Virginia, a power of attorney (“POA”) is a legal document that is witnessed by a notary public. There are two types of POAs that will determine its longevity. The first type is simply known as a Power of Attorney. It remains in effect until the principal – the person who is granting power and authority to take actions – is no longer capable of handling his or her own financial or legal affairs. Therefore, if the principal dies or become incapacitated, the power of attorney will expire.
On the other hand, the second type, a durable power of attorney, stays in effect even if the principal becomes incapacitated. Virginia law, effective in June 2010, provides that all powers of attorney are durable unless they clearly state otherwise. A durable power of attorney will remain in effect upon your disability even if you later become mentally incapacitated. This avoids the delay and hassle of going to court to have a guardian appointed. Since a guardianship and conservatorship proceeding can be expensive and time-consuming, a durable power of attorney may be a good choice to ensure your best interests are fully protected.
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Virginia law permits principals to create either a general power of attorney or a limited power of attorney. A general power of attorney gives the agent, or the attorney-in-fact, broad power to do almost anything for the principal. This can include broad powers to control the principal’s financial, health, legal, and other matters as determined by the principal. These powers may include buying or selling real estate, signing legal documents, and making financial transactions.
A limited or special power of attorney, however, spells out precisely what authority is granted to the agent. For example, a limited power of attorney may empower an agent to take one specific act, such as purchasing a piece of real estate or paying bill and expenses.
Powers of attorney can address a range of issues and grant certain and specific powers. Common types of decisions that a power of attorney gives the authority to do include:
- Make financial decisions
- Make gifts of money
- Make health care decisions
- Recommend a guardian
A power of attorney can be granted to a spouse, adult child, family member, or trusted longtime friend as long as he or she acts in good faith on behalf of the principal at all times. It is extremely important that the principal grant a power of attorney only to someone who is trusted since their actions will legally be considered as the principal’s actions. This may also include a trusted professional such as an attorney, doctor, or accountant. A power of authority may also be granted to more than one agent.
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If you wish to grant a power of attorney to someone, it is important to discuss your intention with the person you intend to empower with the power of attorney. A frank discussion allows you to explain why you are creating the power of attorney, how you wish this person to act for you, how long you expect them to serve for you, and how much they are going to be paid, if anything. Having a lengthy and detailed conversation with this person before the power of attorney is created will help prevent any misunderstandings and best enable them to act in accordance with your wishes. Additionally, you should let another trusted individual know about the contents of your power of attorney document and where a copy may be found. This ensures the power of attorney is completely observed and your wishes honored.
A Durable Power of Attorney for Health Care is an advance directive that allows you to appoint a health care agent (also known as a proxy or a surrogate) to make health care decisions for you in the event you are not able to speak for yourself. The health care agent does not have the authority to make legal and financial decisions for you. That authority would have to come through a separate Durable Power of Attorney. Instead, a health care agent is granted authority to oversee decisions and implement your wishes regarding treatment. This is not limited to just life-saving treatment.
No matter what form a Power of Attorney takes, the person acting under its authority is required to act in the principal’s best interests. The agent is to manage their financial affairs carefully, keep their property and money separate from the principal’s, and maintain good records in case of an audit.
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If you are interested in creating a power of attorney or wish to modify a previously drafted one, please contact either Gregory M. Johnson or G. Raye Jones at MartinWren, P.C. by calling (434) 817-3100. We recognize the seriousness and importance of a power of attorney and will help walk you through the many possibilities and scenarios to consider. Our highly skilled estate planning attorneys can help you find the peace that comes from knowing your legal, financial, or health concerns will be carefully handled by those you trust.
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