Power of Attorney Lawyers in Chesterfield, MO, Helping Clients Navigate the Process of Writing a POA Document
In the unfortunate event that an individual becomes incapacitated or is otherwise unable to be present in order to make certain decisions or conduct important transactions, having a power of attorney can be incredibly helpful. However, this document must be drafted carefully in order for it to work as intended. Learn how a power of attorney works and why it is best to get the help of an attorney in order to write one.
What Is a Power of Attorney?
A power of attorney is a legal document through which an individual (the principal) appoints someone (an agent or attorney-in-fact) to take certain actions on their behalf. The document also contains details about what kind of actions the agent may take and determines the amount of time the agent will be given the authority to act on behalf of the principal.
In other words, the person you choose to be your agent can have unlimited authority to make decisions for you, sign documents, sell assets and conduct other financial transactions, manage brokerage accounts, participate in business operating transactions, or be restricted to only doing certain things, like representing you during the signature of important papers. You are completely free to choose who your agent is and what they are and are not authorized to do.
What Is the Difference Between Durable and Springing Power of Attorney?
Among the many types of power of attorney, the most common ones are durable and springing. A durable power of attorney is valid from the moment it is signed up until the point when the principal passes away, including during the time when the principal may be incapacitated – as opposed to a non-durable power of attorney which is only active for a determined period.
A springing power of attorney only goes into effect after certain conditions have been met – usually when the principal has been deemed mentally incapacitated by a physician. A springing power of attorney can also contain precise requirements that must be met in order for the document to become active, such as the need for two different physicians to confirm that the principal is incapacitated, as well as a clear statement defining what constitutes incapacitation.
Does an Agent Have the Authority to Give Gifts or Sell Real Estate?
It is possible to give your agent the authority to take specific actions, such as giving gifts or representing you in a real estate buy/sell transaction. A statutory gift rider is a special clause that can be added to a power of attorney document giving the agent the authority to give estate gifts with the purpose of estate planning or Medicaid planning for the principal. A principal may restrict the value of gifts not to surpass the federal gift tax exclusion for a particular year or may authorize the agent to give gifts of any value. Without a statutory gift rider, the agent can only give a couple of hundred dollars in gifts for personal or family maintenance.
In addition, an agent can also be awarded the authority to sell real estate on behalf of the principal. The POA document should have specific wording authorizing the agent to conduct this type of transaction. Selling real estate as an agent may be important if, for example, you are acting as an agent for a parent and need to sell their home because they now live at a nursing care facility and are incapacitated.
Are a Power of Attorney Agent and a Healthcare Proxy the Same Thing?
In certain situations, you may have heard the terms healthcare proxy and power of attorney being used interchangeably. However, there are a few differences between the two documents. For starters, a healthcare proxy can only make healthcare decisions concerning your medical care and treatment while you are incapacitated. Your healthcare proxy may follow instructions you may have left on your living will, but they are not allowed to represent you in any other way.
On the other hand, a power of attorney document may allow an agent to represent you in a variety of ways, such as making important financial decisions on your behalf, conducting banking transactions and managing the agent’s bank account, buying or selling real property, and signing documents on behalf of the agent. You may appoint the same person to be your healthcare proxy and your power of attorney agent, or you may choose two different people for each role. In addition, each document springs into action at different times – a power of attorney can go into effect immediately, while a healthcare proxy is only active if the principal is incapacitated.
Both documents can be of high importance during a time when you are unable to speak for yourself or make important decisions. However, it is crucial to word each document carefully and take time to choose the right agent for each role. In addition, you may also want to consider appointing more than one agent for each role. That way, you can be sure that you will have an agent available if your primary one is not available. You may also want to specify whether each agent will be given the authority to act simultaneously or only one at a time. A power of attorney lawyer can help you with the process of drafting these documents and going over critical details to make sure your interests will be protected regardless of what the future may hold.
Do I Need a Lawyer to Write My Power of Attorney Document?
While a quick look around the internet may yield several websites that promise you a do-it-yourself template to help you write a power of attorney as well as a variety of other estate planning documents, skipping the step of hiring an attorney to draft any estate planning documents – including a power of attorney – can be risky. First, you need to make sure your documents are valid. For example, the state of Missouri requires a POA to be signed in the presence of two or more witnesses.
Then, you also need to make sure it contains language that is specific enough to help you accomplish your goals. In other words, a standardized template may contain language that is too broad and thus gives your agent authority to do certain things that you did not intend them to do. By working with an attorney, you can rely on their skills to walk you through each part of your POA document, helping you decide its specific terms, including its duration and the powers you intend to give to your agent. At Mid-America Law Practice, LLC, our power of attorney lawyers has assisted countless clients in Chesterfield, MO, to draft solid POAs and estate plans to fit their exact needs. Reach out at (314) 347-3567 and request a free consultation to see how we can help you.