Powers of Attorney: Inexpensive and Important
Powers of Attorney are, perhaps, the most inexpensive yet vital legal document you can have drawn up during your lifetime. With this one easy step, you can save your friends and family from the long, expensive, drawn-out process of filing for a guardianship with the courts if you become unable to take care of yourself through an illness or accident.
A power of attorney gives another person authority to act on your behalf as your agent. When you grant a person the power of attorney over you, you become a principal and your agent becomes your attorney-in-fact. The term “attorney” here doesn’t require your chosen agent to be a lawyer and it does not make them a lawyer. Any competent person may serve as your agent.
Powers of attorney are useful for many things. Your agent can manage your finances under financial powers of attorney. A designated relative or friend can make medical decisions for you under healthcare powers of attorney. The different powers granted by you can be tailored to fit your needs and comfort level. The agent will be held liable for his or her actions if they take advantage of you for their own gain or act with willful misconduct or gross negligence.
Under Arkansas law, there is general authority, which your agent is presumed to have been granted by you if you do not expressly limit it within the document, and there is specific authority, which is absent unless you expressly include it in the document. You should consult with an attorney carefully about what powers you are granting. Once they are granted, third-parties are generally immune from lawsuits if your agent used the powers of attorney to take advantage of you. For the same reason, you should be incredibly careful who you trust to act as your agent.
Traditionally, powers of attorney will terminate once you become incapacitated. This can be a problem for most people who intend their Powers of Attorney to be used only when they become incapacitated. You don’t need to worry, however, because a durable power of attorney specifically states that the power persist even when you become incompetent. For this reason, Durable Powers of Attorney are the most common tool for disability planning.
A power of attorney may take effect immediately or may take effect upon the occurrence of a future event. For durable powers of attorney, this “springing” event can be your incapacity. You can even define “incapacity” for yourself in order to prevent confusion or litigation in the future if something happens to you.
Powers of attorney terminate in a number of ways. You can establish a term for your powers which automatically terminate them after a set period of time.
Powers of attorney also terminate as a matter of law upon your death. Contrary to popular belief, durable powers of attorney do not persist beyond death. Some private companies accept powers of attorney to complete funeral arrangements, but they are not required to do so. Your will or trust can designate a person to complete your funeral arrangements or other necessary tasks after your death.
You can terminate powers of attorney while you remain competent. Be sure to send written notice of the termination to any old agent to avoid having multiple people believing they are acting on your behalf. An old agent without knowledge that you have revoked his or her authority can still bind you to his or her actions. Additionally, if a guardian or conservator is ever appointed for you, they will inherit your authority to terminate existing powers of attorney.
As you can see, Powers of Attorney are always useful and if you become sick or have an accident which makes it difficult or impossible for you to manage your affairs, a Power of Attorney can be necessary. They also happen to be a quick, easy, and inexpensive process that Owens, Mixon & Gramling is ready, willing, and able to handle for you. They do not require a court to approve and they can be completed in our office at your convenience. If you think you might need a Power of Attorney or you have questions about how Powers of Attorney might benefit you, please give Lance or Aaron a call at Owens, Mixon & Gramling; 1-870-336-6505.