5 Things You Should Know About a Power of Attorney

What is a Power of Attorney?

A power of attorney grants a trusted individual (an agent or attorney-in-fact) the authority to act on your behalf.  While a power of attorney may be used for various purposes, it is commonly used to appoint an agent to manage your financial affairs if you become incapacitated.

Does a Power of Attorney Take away the Grantor’s Authority?

No. The grantor maintains his authority so long as he has the legal capacity to make decisions.

When does a Power of Attorney Become Effective?

Generally, a power of attorney becomes effective immediately upon execution. However, the grantor may execute a “springing power of attorney” which does not become effective until a specified date or the occurrence of a future event.

Can a Power of Attorney be terminated?

A power of attorney terminates immediately upon the grantor’s death and may be terminated:

• If the grantor revokes it.

• Upon the occurrence of a termination event as stated in the power of attorney.

• Once the purpose of the power of attorney has been fulfilled.

• Unless stated otherwise, if married to the agent at the time of executing the power of attorney, the power of attorney is terminated when a legal action is filed with the court for divorce or legal separation.

What happens if you don’t have a power of attorney?

If you become incapacitated and do not have a power of attorney, it is likely that the court will appoint a conservator, or guardian. The responsibilities and powers of the conservator are governed by state statutes. The conservatorship is subject to court supervision and can be expensive and complicated.

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