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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.

For additional information, visit www.ReedShermanLaw.com or click here to schedule a consultation.

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